E-Business Environment And Social Commerce: A Case Study Of Marks And Spencer

Literature review on social media and social commerce

The concepts of e-business have been developed since the revolutionary use of Internet. With the wide use of social media, social commerce has also been popularized. E-business is promoted in various sectors including the education sector, banking sector, retail sector. The e-commerce and social commerce, along with the use of social media has been popularized with the use of Internet. Social commerce includes the CRM services, retailing and sales on a social platform, with consultation with friends and family members available online. In this context, the case study of Marks and Spencer has been chosen. This company is one of the largest retailers of UK and has a significant presence in social commerce as well as e-business.   

• Nature and size of the organization

Marks and Spencer is one of the largest retail sectors of UK, having more than 800 stores in UK and a strong global presence in various other countries. Marks and Spencer caters to its millions of customers with food products, clothes and fashion accessories.

• Nature of the Industry

Retail industry is the largest industry around the world and caters to a huge number of customers, along with providing employment to a huge number of people. Along with the on store presence of the retail sector, the online presence is also essential (Hajli 2015). The retail sector has been increasing their presence in social commerce as well as in social media.

• Justification for choosing Marks and Spencer

Marks and Spencer has been selected since it has a significant presence in e-commerce as well as in social commerce. Moreover, the e-commerce business set up by the company is efficient enough to satisfy its customers with on time delivery and an easy user interface. Marks and Spencer has given equal importance to its online business, and hence it is equally popular as its stores.

• Social media and social commerce

Social commerce and social media is intrinsically related to each other. Social commerce refers to the online commerce involving social media. In social commerce, the customers interact with each other while buying products (Chaffey 2015). Thus, they are able to get a clear review of the product they intend to buy. The buying decision in social commerce has the following stages:

Problem recognition: The advertisement of a particular product is posted on the social networking sites and endorsements from the friends on the social networking sites are obtained. On the basis of the attraction of the advertisement, along with the endorsement of the friends, a customer becomes a potential buyer of the product.

Search of information: While the customer searches information about the particular product, he is influenced by the comments of his friends on the social media. The ratings and reviews of the friends are traced by the customer (Kim and Park 2013). Any query regarding the product is also answered by the members of the social networking sites.

Exploration of alternatives: On the basis of the suggestions given by the members of the social media, the potential customer explores some of the alternatives of the product, or alternative stores of the same product.

Purchase: In social commerce, group purchase options could be explored and huge discounts are also available.

Marketing analysis

Post purchase: Finally after the purchase is made opinions are shared and posted on the social media. Ratings are given for future buyers of the same product. The post purchase experience is also posted on various blogs and other social media.

The various advantages of social commerce include consistent growth of buyers in the social media. For companies having a significant social commerce attract thousands of customers everyday through social media. Another advantage includes significant increase in the search engine ranking. Presence of any company on the social media has proved to increase its search engine ranking and hence its business gets a significant boost. However, the greatest advantage lies in the achievement of customer loyalty and retention of the customers. By the use of the opportunity to engage in the social media, the relation among the customers and the company deepens. Thus, social commerce and social media has a significant role to play in boosting the business.

• Use of social commerce in industry

In the retail industry, social commerce plays a significant role, and many retailers have been attempting to venture into the social commerce (Huang and Benyoucef 2013). It has been observed that the retails who have been successful in social commerce have achieved a higher turnover and the customer satisfaction and retention has also increased significantly.

• Use of social commerce in Marks and Spencer

In case of Marks and Spencer social commerce plays an important role since the company is already into e-business and in order to increase their business even more, social commerce could be used. Social commerce promotes marketing and sales of the products using the social media as a platform. Customer satisfaction would be achieved at a higher rate thus resulting in customer retention.

• Online marketplace analysis

Online marketplace analysis is the new trend in marketing and is an effective tool for market analysis. It refers to the analysis of the competitors, customers and the various technologies that are used by the company. In this analysis, macro environment as well as micro environment analysis takes place. Macro environment consists of technology, culture, country specific rules as well as international specifications (Monczka et al. 2015). Technology refers to innovation and implementation of new software for the improvement of the business. Social and cultural factors include ethical standards that need to be obtained by the company to achieve customer satisfaction. Country specific regulations that the company has to follow refer to the trading laws of a particular country in which the company operates. International constraints refer to the international trading standards which are considered in the macro environment. The micro environment refers to the suppliers, customers of the company. The suppliers are essential to ensure the smooth operation of the company. The customers are also an integral part of the company. Hence, the micro and macro environment forms an integral part of the online market place analysis.

Market place analysis is useful in case of Marks and Spencer. The micro and macro environment of Marks and Spencer is analysed and the change needed are identified by the analysts. Moreover, the compliances with the international standards could also be checked by Marks and Spencer. Hence, the necessary changes could be easily incorporated by the use of market place analysis.

The micro environment of Marks and Spencer includes the suppliers of food and clothing. The customers are mainly upper middle class people. The macro environment includes technological innovation such as use of e-commerce. The social and cultural factor includes designing of clothes that are culturally accepted in the society.   

A business model canvas includes the key partners of the business, the key activities, the key resources, value proposition, customer relationship, customer segmentation, channels, cost structure as well as the revenue streams.

Key partners: This refers to the partners of the business that makes it easier for the business to expand.

Key activities: In order to develop the business, various key activities that are essential for the smooth operation and success of a business.

Key resources: The key resources for a business include the revenue of the business.

Customer relationship: The relation with the customer’s needs to be appositive and friendly one. The different types of services provided to the customers include online services, customer care, after sales services.

Customer segment: This refers to the target market that the company has intended to sell its products. For Marks and Spencer, the target market is mostly the fashion conscious people.

Cost structure: The cost structure refers to the capital investment of the business and the various elements of cost.    

The revenue model refers to the various methods of generating income of a company. The various types of online revenue models include the following:

Cost per thousand: CPM is a traditional method in which the owners of the site charges fees for advertisement. The owners of the site charge a specific rate for the number of customers visiting a website (Royle and Laing 2014).

Cost per click: CPC charges the advertisers according to the number of clicks on the website.

Cost per acquisition: CPA refers to the cost to the advertiser for each of the outcomes. Various retail companies negotiate with the CPA dealers, where payment is made on the basis of each of the email address captured (Peck et al. 2013).

Subscription access to content or services: In this type of business model, a wide range of documents are accessed by a company for a fixed period of time.

Digital infrastructure refers to the software infrastructure along with the hardware infrastructure that is essential for delivering e-business to the customers. The five layer model of digital infrastructure is as follows:

Layer 1: Application layer: The application layer is the first layer of the digital business model and it includes CRM, management of the supply chain, data mining.

Layer 2: Systems software layer: the system software layer consists of the web browsers and the system software that are necessary for the business. The database management system is essential software for the systematic storage and retrieval of data, and hence falls under this layer.  

Layer 3: Transport layer: The physical network as well as the TCP/IP standards is considered in this layer.

Layer 4: Physical layer: The physical layer contains the permanent magnetic storage, optical backup system and the storage in memory using random access memory (Zhou et al. 2013).  

Layer 5: Data and content layer: The web contents for the Intranet, Internet sites as well as for extranet are found in this layer. Customer transaction data is also found in this layer.

• SWOT analysis

The SWOT analysis presents the strengths, weakness, opportunities as well as the threats of Marks and Spencer.

Strength · High quality products · Efficient customer service · Friendly and efficient staffs · Positive shopping environment · Significant online presence	Weakness · Lack of segmentation in clothing · Limited stock
Opportunity · Growth of e-business · Introduction of social commerce · Market penetration in countries where they have not ventured · Introduction of organic food items	Threat · Strong competitors such as Tesco, Asda · Rise of new retailers

Table 1: SWOT analysis of Marks and Spencer

• Strategy objectives using SMART principles

The formulation of strategy objectives includes providing support to the customers by allowing them to access files, in case of any issues encountered. The online services need to be efficient enough to resolve the issues faced by the online customers. Another objective is to increase the revenue of the company through the use of social media and social commerce (Ryan 2016). The services to the premium customers must be increased in order to ensure customer retention. These strategic objectives are specific as they focus on a particular area of the business. These are measurable by the increase in the generation of revenue. The objectives set are attainable since increased services to the customers ensure customer loyalty. The objectives are realistic and a specific time period of 2 months could be set to achieve these objectives.    

• Possible strategy

One of the possible strategies includes engagement in social commerce by Marks and Spencer in order to generate higher revenue. 

• Implementation of the selected strategy

In order to implement the selected strategy, Marks and Spencer needs to engage in social media and promote social commerce. Moreover, attractive discounts could be added in purchases through social commerce (Turban et al. 2016).  

• Key partners and suppliers of the supply chain

The key partners of the supply chain include the business partners of Marks and Spencer. The suppliers are of various types, the food supplier, and the supplier of the clothes (Christopher 2016). In order to ensure the efficiency of the supply chain management, each of the suppliers need to deliver their goods in time (Stadtler 2015).    

• Supply chain approach

Marks and Spencer uses pull approach of supply chain, since it manufactures limited stocks of goods and the demand is based on actual consumption and not on speculation (Fernie and Sparks 2014).

• Key components in SCM infrastructure

The key components of SCM infrastructure includes plan, develop, make, deliver and return.

The digital marketing plan is as follows:

Planning: Creation of the digital marketing plan is the initiation stage.

Reaching: The target audience is to be reached out (Tiago and Veríssimo 2014).

Act: Brand interaction as well as interaction with the target customers is done.

Convert: With the implementation of the digital marketing, increase in the sales, customer retention as well as improvement in the rand image is observed.

Engage: In this stage, customer loyalty is build, and feedback from the customers is taken, incorporating the necessary changes.

Conclusion

E-business and e-commerce are essential activities for Marks and Spencer. The company has made a significant presence in the e-commerce world. However, the company needs to develop its social commerce as a part of enhancing their business.     

References

Chaffey, D., 2015. Managing Digital Marketing in 2015.

Christopher, M., 2016. Logistics & supply chain management. Pearson UK.

Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan Page Publishers.

Fernie, J., 2014. 02 Relationships in the supply chain. Logistics and retail management: Emerging issues and new challenges in the retail supply chain, p.35.

Hajli, N., 2015. Social commerce constructs and consumer’s intention to buy. International Journal of Information Management, 35(2), pp.183-191.

Hajli, M., 2013. A research framework for social commerce adoption. Information Management & Computer Security, 21(3), pp.144-154.

Huang, Z. and Benyoucef, M., 2013. From e-commerce to social commerce: A close look at design features. Electronic Commerce Research and Applications, 12(4), pp.246-259.

Kim, S. and Park, H., 2013. Effects of various characteristics of social commerce (s-commerce) on consumers’ trust and trust performance. International Journal of Information Management, 33(2), pp.318-332.

Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.

Peck, H., Christopher, M., Clark, M. and Payne, A., 2013. Relationship marketing. Taylor & Francis.

Royle, J. and Laing, A., 2014. The digital marketing skills gap: Developing a Digital Marketer Model for the communication industries. International Journal of Information Management, 34(2), pp.65-73.

Ryan, D., 2016. Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.

Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.

Tiago, M. and Veríssimo, J., 2014. Digital marketing and social media: Why bother?. Business Horizons, 57(6), pp.703-708.

Turban, E., Strauss, J. and Lai, L., 2016. Innovative Social Commerce Applications: From Social Government to Entertainment and Gaming. In Social Commerce (pp. 205-230). Springer International Publishing.

Zhou, L., Zhang, P. and Zimmermann, H.D., 2013. Social commerce research: An integrated view. Electronic commerce research and applications, 12(2), pp.61-68.