Impact Of E-commerce Technology On Business Activities In The UK – Research Study

Background Information

In the era of highly advanced technology, the business activities are significantly dependent on the technology and its applications. Digital technology refers to all kinds of electronic applications and equipment, which use the information in the binary form. The business world uses various types of digital technology to reduce the operational time and cost and increase their profitability. Customers have also become tech-savvy and they prefer to get the solutions faster. E-commerce is one such business category that is highly dependent on the digital technology. The craze for e-commerce has gone up very high as the retailers as well as the customers are now favoring the e-commerce sites for retail shopping. The research study will focus on the impact of digital technology, particularly the e-commerce technology on the business activity. As the e-commerce sites operate in the retail industry, the research will focus on the retail business activity in the UK.

The aim of this research is to study the impact of the e-commerce technology on the business activities in the UK.

E-commerce activities have become a quite prominent business activity in the UK in the recent past. As the UK is one of the leading and developed countries in Europe as well as in the western world, the economy has provided opportunities business growth. The e-commerce business in the retail industry has been able to capture a big market due to the convenience provided to the shoppers. E-commerce has many benefits and with time, the companies are providing more and more convenience, in terms of returns, refunds and exchange. In 2015, the e-commerce market in the UK was the third largest in the world, which came up to second position in Europe after Norway in 2017. The economy collected 533 billion pounds in 2015 only from the e-commerce sales. At the same time, the sales from B2B sales in retail e-commerce accounted for around 96.5 billion British pounds and the total e-commerce sales contributed around 19% of the total business turnover in 2015. As per the record of NASDAQ, approximately 87% of the internet users in the UK did online shopping, which was highest in the penetration rate of online shopping in Europe in 2017. The digital technology, such as, the shopping websites and mobile apps have brought this revolution in the retail business industry in the UK as well as in the whole world. Thus, going by the revenue numbers of the companies, it can be inferred that digital technology has played a significant role in changing the shopping pattern of the customers, which in turn had a great impact on the business activities of the companies in that industry. Through this research study, the researcher will enlighten the positive and negative impact of the e-commerce business on the business activities of the retail industry of the UK.

Objectives

The objectives of the research study are:

• To examine the advantages and disadvantages of e-commerce ondigital technology
• To find outthe growth of e-commerce activities in the UK retail market in the past
• To assess the impact of the e-commerce on digital technologyin the business activities in UK

This research study proposes to highlight the pros and cons of one of the most commonly used digital technologies, that is, e-commerce. This technology has brought a huge revolution in the field of retail shopping all over the world. It is also seen that, the application of the e-commerce technology has different impacts on the business and the customers. As the online shopping market is growing hugely in the UK, as well as, in the world, the business industry is changing strategies and marketing techniques to sustain in the market as well as expand their business. This study will identify the areas, where the businesses can make improvements to capture new consumers as well as retain the existing ones.

The purpose of the study is to evaluate the effect of the digital technology of e-commerce on the business activities in the retail market of the UK. The researcher will explore the pros and cons of this technology and the challenges created by this, so that, the potential scopes for improvements can be identified and measures can be taken accordingly.

Mastilo (2017) conducted a study on digital growth and its impact on the modern business. In the study, the author found that business digitization had a significant role in bringing dynamic changes across the global economy and the reforms in the information technology have been beneficial in getting increased productivity. Sokolov-Mladenovi? (2014) pointed out that, the large companies often implement Information and Communication Technology (ICT) to identify the scopes for increasing competitiveness, and the governments and managements of the MNCs in the developed countries are now focusing on the development of innovative digital technologies, which sometimes bring about digital disruptions or disruptive technologies, that change the course of business of the industry.

Digital disruption is brought about by new technologies and the business models that change the value propositions of the existing products and services. Although digital disruptions are occurring in almost every field of business, Karimi and Walter (2015) focused on the internet and its impact on the changing dynamics of the newspaper industry in their study. From the paper, it can be inferred that, creative innovations in the digital technology can create significant challenges in the traditional business activities of the incumbent firms in a market or industry. In this regard, it can also be said that, e-commerce business is a digital disruption to the traditional brick and mortar business of the companies. With the emergence of e-commerce sites, such as, Amazon, Alibaba, ebay and many more, the shopping pattern of the consumers have changed drastically in the past decade. The usage of internet, computers and smartphones has brought about a big revolution and the e-commerce companies had successfully grabbed the opportunity. Convenience of shopping from anywhere and anytime with easy shipping, return, refund and exchange policy, has made people to prefer the e-commerce sites instead of the brick and mortar stores. The success of these companies has influenced many traditional retail and departmental stores, such as, Waitrose, Tesco, Marks & Spencer, Fenwick, Harvey Nicholas etc. and clothing and accessories brands, like, Zara, Gucci, Prada and many more to launch their own websites and mobile shopping apps, from which the consumers can shop online, like the e-commerce sites.

Literature Review

Shahjee (2016) showed in his paper, that emergence of e-commerce had altered the traditional way of business in the finance, communication and retail trade, while it has the potential to improve the activities in the health, education and public sector. The integration of e-commerce and the traditional business leads to the implementation of integrated marketing communications, which brings the customers more closer to the companies. This allows the businesses to get ideas new products or services or strategies and test those against the existing customer base, without losing the market share all together when a new technology enters.

As shown by Ap?v?loaie (2014), internet plays a major role in bringing a significant development in the business environment. The businesses need to innovate and improve continuously to sustain in the industry. Be it the product or service or be it the business operations, improvisations are a must, in which internet is required. As the tastes and preferences of the customers are changing, and businesses are going global, the implementation of digital technology has become very important. This has been pushing the companies to launch their own online shopping facilities with discounted prices to retain their existing customer base.

As stated by Lu, Zhao and Wang (2010), since internet has created large sphere of opportunities and challenges for the existing organizations and industries, which have direct relationships with the consumers, the industries have been developing new business models which incorporate the digital technology with the aim of gaining competitive advantage in the market. Some businesses understood this dynamics quite fast, and followed the path shown by Jeff Bezos of Amazon. Thus, it can be inferred that, digital technology, such as, the e-commerce technology has become quite a significant factor in influencing the business activities. While some businesses have flourished by this technology, some have been negatively affected by this. Thus, through this study, the researcher will focus on various aspects of the e-commerce activities and their impact on the business operations, along with the challenges faced by the companies.

Research methodology represents the approach and strategy that will be taken by the researcher to conduct the research study. Based on the data to be collected and analysis process to be applied, the research methodology is determined. In the given research, the researcher will apply mixed methodology, that is, pragmatism research paradigm, in which both the quantitative and qualitative analysis method are applied to get the findings. Both the exploratory and explanatory research approaches will be followed as the research phenomenon will be explained by the findings from the quantitative study and explored through qualitative study. The researcher will take a case study research design to explore the research topic. This will help in narrowing down the horizon of the research topic and focus on a specific direction. Toys R Us, UK will be taken as a case study company, on which the researcher will base the study, that is, impact of e-commerce business by various sites, such as, Amazon, ebay etc. on the business of Toys R Us, UK will be studied in this research.

Research Methodology

Data is of two types, primary and secondary. Primary data refers to the one which is collected directly from the field of study by using instruments like survey questionnaire, interviews, observations, focus group etc. On the other hand, secondary data is the one which is collected from published sources, such as, official websites, books, journals, newspaper articles etc. The researcher will collect both the primary and secondary data to conduct the study. Primary data would be collected through a survey. The employees of Toys R Us, UK will be chosen for the survey that would focus on their perceptions and knowledge about the e-commerce activities and its impact on their business. In the given study, the researcher will collect the secondary data, that is, sales data of Toys R Us, UK in the past three years from their annual reports and how the online shopping is affecting their business.

Sample represents a smaller subset of a larger population, which is used for data collection. Since, entire population cannot be studied, a subset is drawn using appropriate statistical sampling technique, which features the same characteristics as the population. It is mostly used for collecting the data through surveys, interviews or focus groups. The researcher will use simple random sampling to draw a sample of 25 people from the employee base of Toys R Us, UK. This is a probability sampling technique, in which each sample has equal and random chance of being selected and it also reduces the chance of biasness and sampling fluctuations in the data. The sample profile would contain 25 employees, holding various positions in the company.

Qualitative research method puts emphasis on the qualitative or descriptive aspect of the study to understand the underlying reasons and opinions. This method helps in getting an insight about the problem and creates a scope for developing hypothesis for quantitative study. The secondary data will be analyzed using thematic analysis under qualitative study.

This type of research involves empirical investigation of the research topic by applying statistical and mathematical techniques. The researcher will convert the survey response into numerical data and conduct the empirical investigation to test the research topic. Statistical tools, such as, reliability test, cross tabulation, correlation, regression and descriptive statistics, will be applied based on the requirement.

Following the pragmatism philosophy, mixed research methodology will be chosen by the researcher to conduct the study. Toys R Us, UK is the case study company under case study research design. Primary data will be collected through a survey on a sample size of 25 employees of the company and this will be analyzed using quantitative analysis method. Secondary data, that is, the sales data of the company of the last 3 years will be collected and will be analyzed using qualitative method.

References

Ap?v?loaie, E.I., 2014. The impact of the internet on the business environment. Procedia Economics and finance, 15, pp.951-958.

Carlson, K.A. and Winquist, J.R., 2017. An introduction to statistics: An active learning approach. Sage Publications.

ecommercenews.eu, 2018. Ecommerce in UK grew to €15.6 billion in 2017. [online] Ecommerce News. Available at: https://ecommercenews.eu/ecommerce-in-uk-grew-to-e15-6-billion-in-2017/ [Accessed 25 Jun. 2018].

Fitzgerald, M., Kruschwitz, N., Bonnet, D. and Welch, M., 2014. Embracing digital technology: A new strategic imperative. MIT sloan management review, 55(2), p.1.

Fuciu, M. and Gorski, H., 2012. Online social networks–a comparative analysis for the marketing world. REVISTA ECONOMIC?.

Karimi, J. and Walter, Z., 2015. The role of dynamic capabilities in responding to digital disruption: A factor-based study of the newspaper industry. Journal of Management Information Systems, 32(1), pp.39-81.

Kitonyi, N., 2017. UK Online Shopping and E-Commerce Statistics for 2017. [online] NASDAQ. Available at: https://www.nasdaq.com/article/uk-online-shopping-and-e-commerce-statistics-for-2017-cm761063 [Accessed 25 Jun. 2018].

Lane, D.M., Scott, D., Hebl, M., Guerra, R., Osherson, D. and Zimmer, H., 2017. An Introduction to Statistics. Rice University.

Larsen, R.J. and Marx, M.L., 2017. An introduction to mathematical statistics and its applications (Vol. 5). Pearson.

Lu, Y., Zhao, L. and Wang, B., 2010. From virtual community members to C2C e-commerce buyers: Trust in virtual communities and its effect on consumers’ purchase intention. Electronic Commerce Research and Applications, 9(4), pp.346-360.

Marczyk, G., DeMatteo, D. and Festinger, D., 2017. Essentials of research design and methodology. John Wiley.

Mastilo, Z., 2017. Impact of Digital Growth in Modern Business. Business and Management Studies, 3(4), pp.59-63.

Peck, R., Olsen, C. and Devore, J.L., 2015. Introduction to statistics and data analysis. Cengage Learning.

Shahjee, R., 2016. The Impact of Electronic Commerce on Business Organization. Scholarly Research Journal for Interdisciplinary Studies. 27(4), pp. 3130-3140.

Sokolov-Mladenovi?, S., 2014. Globalizacija i digitalna ekonomija. Sinteza 2014-Impact of the Internet on Business Activities in Serbia and Worldwide, pp.143-147.

Thomas, M. ed., 2011. Deconstructing digital natives: Young people, technology, and the new literacies. Taylor & Francis.

www.statista.com, 2017. E-commerce in the United Kingdom (UK). [online] www.statista.com. Available at: https://www.statista.com/topics/2333/e-commerce-in-the-united-kingdom/ [Accessed 25 Jun. 2018].

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