Recession Busters: Exponential growth of online trade
Europe may be in recession for the foreseeable future with mildly- zigzagging growth charts; the online retailers, however, are defying the gloom and are certainly in metaphorical bloom. Both Amazon and EBay, the two US-based companies in particular, are doing very well in Britain, even if they have come under attack from the MPs for paying disproportionately small amount tax in the UK, despite the exponential increase in sales.
Latest figures, released by the Office for National Statistics, show an 11% increase in October than what was spent in October last year – a phenomenal increase. The figures also point out that 9.4% of UK retail spending now takes place on the internet.
Understandably, the figures have set alarm bells ringing among the High Street shopping chains.
While bringing the tax affairs of Amazon and EBay under spotlight, the big department stores demanded a level playing field, if they were to survive the current trend. John Lewis and Marks & Spence are among the top retailers who made their frustration known this week, after clearly feeling the pinch.
The development, disturbingly, coincides with yet another electrical retailer going into administration with the loss of hundreds of jobs. Comet, the chain which own 236 stores, is closing down a significant number of stores across the country, as the effort made to keep the redundancies to a minimum is doomed to fail.
The struggling High Street brands were often blamed for not embracing the online retailing fast enough, as one reason for their failure. Comet, however, had a fully functioning online arm which had been reasonably synchronized with its nationwide stores; in addition, it did provide the customers with reasonable discounts too while encouraging them to shop online. The combination, however, failed to shore up the enthusiasm among the customers to shop with Comet, which, in turn played its role in the downfall.
Both John Lewis and Marks & Spence are two retailers with excellent customer care. So, customers still love them and don’t want them to go crumble at a difficult time – having being challenged by internet giants. Some electric retailers, however, which jumped on the bandwagon to ostracize Amazon and EBay, are not universally loved in Britain. Their questionable conduct, when the circumstances were in their favour during the ‘booming’ years, has become a boomerang for them when the tables have been turned on them.
The combination of dominance and influence of Amazon and EBay on the internet has reached such a state that it is no exaggeration if someone says they are setting standards for online trade: the strategies adopted by the two companies are highly intuitive; the innovation is breathtakingly impressive; customer care is glued to the DNA of the two giants and the former sense as soon as they see the unmistakable company interface; the involvement of hundreds of thousands of external traders in many different fields keep the two sites miles ahead of their competitors; the ability to rate a trader or even blacklist him has guaranteed most of the customers a pleasant trading experience while dealing with them.
Some retailers, meanwhile, have realized that there is nothing to gain by taking on Amazon, EBay and other flourishing online players. Instead, they have come up with their own innovations to make them stand out among the famous.
Tesco, the supermarket giant, for instance, is planning to introduce a shop online which exactly mimics its store fronts. ASDA, the biggest rival of Tesco, announced this week that they are introducing multichannel services in their stores across the country. According to ASDA, its customers will be able to click and collect their grocery 24 hours a day once the system is fully operational. While describing the era we live in as ‘Post-PC-world’, ASDA spokesman described how the supermarket is trying to woo customers who prefer mobile devices to PC to access the internet – and of course, ASDA sites.
At the outset, even Amazon and EBay could not grow as much as they liked due to the inevitable distribution challenges. The rapid growth of courier companies has addressed the issue quite satisfactorily; you can place an order on a weekday to get the item in a matter of two to three days. The speed of broadband connections, emerging new internet technologies, the improvement of graphic applications – and the corresponding hardware - have collectively played their role in attracting customers in droves to store fronts for near-magical shopping experience while minimizing the need to be in a store in person for first-hand experience.
It is not just big players who are rushing to for a permanent foothold on the internet trading. Two schemes are already in place even for independent High Street retailers to come on board.
Openhighstreet.com and Myhigh.St are just doing that: customers can locally shop while using mobile, PC or tablet with the choice of collection at store or being delivered to their door. The initial reaction of the independent retailers has been quite positive.
With the unstoppable growth of online trade, it is not just traditional retailers which are under serious threat. Companies that own shopping centres, banks which funded them and a range of other players who used to occupy unique spots along the evolutionary process that spans decades, are facing the same predicament in the long run unless they embrace the change as a part of advancement, rather than its opposite.
- Asian Tribune -