The Effect of the Internet Market on Brick and Mortar Stores

The Effect of the Internet Market on Brick and Mortar Stores
Author
Institution

Table of Contents
TOC o “1-3” h z u Abstract PAGEREF _Toc503595553 h 3Introduction PAGEREF _Toc503595554 h 4Discussion of Findings PAGEREF _Toc503595555 h 4Effects of internet market that help keep brick and mortar stores active PAGEREF _Toc503595556 h 4Lack of an opportunity to assess the product before purchasing PAGEREF _Toc503595557 h 4Hidden costs PAGEREF _Toc503595558 h 4Increased risk of identity theft PAGEREF _Toc503595559 h 5The potential of overpaying PAGEREF _Toc503595560 h 5Challenging to gain customer PAGEREF _Toc503595561 h 5Effects of internet market making the platform dominate the retail world PAGEREF _Toc503595562 h 6Online shopping is convenient PAGEREF _Toc503595563 h 6Wider variety and price PAGEREF _Toc503595564 h 6Improved service delivery PAGEREF _Toc503595565 h 7Lower prices PAGEREF _Toc503595566 h 7Innovation PAGEREF _Toc503595567 h 7Availability of return policy PAGEREF _Toc503595568 h 7Conclusion PAGEREF _Toc503595569 h 8Index PAGEREF _Toc503595570 h 10

AbstractThe internet market XE “internet market” has resulted in various effects on brick and mortar XE “brick and mortar” stores. The research below is divided into two main sections. The first part focusses aspects that help keep the brick and mortar stores active despite the presence of online shops XE “online shops” which make shopping easier. These factors include lack of an opportunity to examine the product when purchasing it on the internet market, additional charges, increased risk of identity, the potential of overpaying and the challenge of gaining trust as online transactions are not carried out face-to-face XE “face-to-face” .

The second part focusses on factors that have allowed the internet market dominate the retail world. These include convenience achieved through shopping online as a person can shop online from almost everywhere as long as there is an internet connection, ability to make price XE “price” comparisons from various sellers and broader variety, improved service delivery XE “service delivery” , lower prices, innovativeness and availability of a return policy XE “return policy” .
Keywords: Brick and mortar stores, internet market XE “internet market” .

IntroductionThe term brick and mortar XE “brick and mortar” in the retailing world refers to stores with physical buildings that are owned or rented by the company as opposed to one that operates entirely on online platforms (Hudson, 2017). The original meaning of brick and mortal is building materials. However, the definition has taken a less positive connotation in the internet dominated world to refer to something that has been passed by time. Brick and mortar companies might find it challenging to compete with their web-based counterparts because of the lower costs of operation and higher flexibility present in the online world. Brick and mortar stores have various unique advantages over their online counterparts. A significant share of the customers still prefers to conduct business transactions with people directly as they may have some questions about the product sold to them or the service provided. For such people, face-to-face XE “face-to-face” transactions offer a more comprehensive and immediate answer to questions they might have.
Discussion of FindingsEffects of internet market XE “internet market” that help keep brick and mortar XE “brick and mortar” stores activeThe primary driver of online shopping XE “online shopping” is ease of use. Though the internet provides a quick and easy platform to buy goods or services, some people only use this technological method in limited ways. Some individuals use the internet for purposes of gathering information concerning a commodity before they can buy it. Various factors have helped brick and mortar XE “brick and mortar” stores to remain relevant in the market despite the presence of the modern online shopping methods, these include:
Lack of an opportunity to assess the product before purchasing: In online shopping XE “online shopping” , a customer XE “customer” has to buy a product without seeing it from a physical perspective. When purchasing a piece of clothing with the help of the internet, it is not possible to try it and check whether it fits. The electronic images of the product are sometimes misleading. The appearance or color may not match the electronic pictures provided. One of the methods of making sure that what customers buy is what they see is through visiting physical stores to have a clear assessment of the product. When purchasing items such as vegetables, it might be challenging to gauge how fresh they are, the images provided in most cases are different especially for such commodities that are replaced regularly.
Hidden costs: Though internet shopping is usually described as free, there exist some additional charges. Most online sites are loaded with picture heavy content. The images consume a lot of data, people who depend on internet packages that are not free have to incur some additional browsing charges while shopping online. Also, shipping costs are not usually included in the price XE “price” of the product as the charges differ depending on how far the product has to be transported before it reaches the customer XE “customer” . The fee is usually not included until the customer is done with the selection (Ho, 2017). In some instances, customers may end up paying more money in the form of shipping cost XE “cost” when compared to how much the product is worth. In physical stores, a person pays precisely what is indicated on the price tag of the item.
Increased risk of identity theft: Shopping online is taking a risk; this is because hackers might steal the customer XE “customer” ’s payment information and make payment to themselves or they might use the information to make other payments (Pritchard, 2016). Though this danger does not only affect online shoppers but also customers in brick and mortar XE “brick and mortar” stores, putting information in the wrong hands has a higher probability taking place online. Technology is highly dependable, a person’s data is usually encrypted which makes it hard to read. However, even in situations where everything is done correctly and when conducting transactions with large reputable companies, there is a probability of the data being intercepted or being breached. Also, the problem might originate from the customer’s end where malicious software might be used to steal login details for money transaction sites such as PayPal.
The potential of overpaying: Online stores use dynamic pricing methods, the prices might fluctuate at different periods of the day. If the customer XE “customer” makes a payment at the wrong time, they might be overpaying (Taylor, 2016). It is much more difficult for brick and mortar XE “brick and mortar” stores to make such changes to the prices of their commodities. Some applications can be used to monitor the prices in online shops XE “online shops” and request a refund on behalf of the user in case of an overpayment. However, some e-commerce sites use a technique referred to as price XE “price” steering that is used to customize pricing options or search results based on data collected from the buyers. For example, if an online shopping XE “online shopping” site detects that a customer is financially well off, it might drive the client to pricier and personalized options.
Challenging to gain customer XE “customer” trust: When setting up an online store, it can be difficult to establish a trusted brand name especially if the business lacks a physical presence. The customers might need to make inquiries in situations where their delivery fails. If the company is its initial stages, it might not have enough customers who can advertise the business through word of mouth to attract more customers and provide more information on how genuine the company is. In a situation like that, the company has to set up an efficient customer service system to be incorporated into the online shopping XE “online shopping” platform. Also, the firm might be forced to concentrate on advertising as a method of attracting the right customers for the product or services provided. Though the internet offers a cheap way to advertise such as the use of social media, establishing the online shop might take a lot of time; this is worsened by the presence of already established brick and mortar XE “brick and mortar” stores.
Effects of internet market XE “internet market” making the platform dominate the retail worldAccording to a study conducted in 2015 by the Pew Research Center, 79 percent of American citizens have bought an item online. 51 percent of the people have purchased something with the help of their mobile phones while 15 percent have made a purchase by clicking a link provided in social media advertisements (Smith & Anderson, 2016). Despite the various challenges that might be present in online shopping XE “online shopping” , there are multiple benefits it offers to the customers; this is the main reason shoppers are slowly migrating from the brick and mortar XE “brick and mortar” stores and carrying out more purchases over the internet.
Online shopping is convenient: One of the most advantageous aspects of online shopping XE “online shopping” is it can be carried out at any time whether day or night, a person does not have to go to the physical stores, the transactions can be carried out from home or the office at the click of a button. Making a purchase online and having it delivered saves time when compared to taking a trip to a brick and mortar XE “brick and mortar” store (Abcede, 2015). When shopping, a person does not have to queue waiting for other customers to be served or wait for the shop assistant to help with the purchases; this makes online shopping fast. It is very common to find huge crowds while shopping especially during the festive seasons. At such times finding a parking space is also an issue; these type of problems can be avoided through purchasing items online. Also, some transactions are instant as they do not require any delivery. For example, a downloadable product such as e-books become available as soon as the customer XE “customer” makes a payment.
Wider variety and price XE “price” comparisons: Online shopping allows people to have a wide range of products to choose from and also compare prices. Unlike the brick and mortar XE “brick and mortar” stores where a person might be forced to travel from one store another to compare the costs or get a broader variety when shopping over the internet, this is achieved through visiting one online shopping XE “online shopping” site and making comparisons with other sites. Online retail shops depend on many suppliers; the customer XE “customer” can get the latest products from the globe without having to travel to different parts of the world. It is possible to shop at retailers in other parts of the country or even other nations. In most cases, people shopping in physical stores have to settle for the prices that the vendor has placed on particular items. Even for consumers XE “consumers” who prefer making face-to-face XE “face-to-face” purchases, 80 percent of the buyers first conduct an online price comparison before purchasing in a physical store XE “physical store” (Renfrow, 2017). The higher the price of the commodity, the more likely customers are to research the cost XE “cost” . Also, the review section of items for sale in online platforms allows online shoppers to share information with other customers based on their experience with the product or even about the retailer.
Improved service delivery XE “service delivery” : The internet market XE “internet market” has led to the improvement of service delivery in both the online stores and the physical retail centers. Unlike the brick and mortar XE “brick and mortar” stores which require a lot of capital to start and run normal operation due to expenses such as rent payments or building the stores, online shops XE “online shops” do not have a physical presence; this makes them easier to start and operate. The reduced starting capital has led to the establishment of numerous online retail outlets. The growth of online shop is to a great extent determined by the quality of service delivery; there is no limitation to expansion due to factor such as lack of expansion space which is the case in physical stores. The businesses attract new customers and retain the old one through improving service delivery.
Lower prices: In online shopping XE “online shopping” , when a customer XE “customer” makes a purchase, the product is sourced directly from the manufacturer without the involvement of middlemen (Anamika, 2017). In the brick and mortar XE “brick and mortar” stores, the products are transported from the manufacturer to the physical location of the retail stores. The customers have to incur the additional transportation costs to allow the company achieve profits. Also, the customers have to travel to the retail store to make a purchase which means they have to incur transportation costs from their end.
Innovation: The internet world is continuously growing at an exponential rate; this growth makes it possible for online shopping XE “online shopping” service providers to come up with innovative ideas that make the life of their customers simpler. An excellent example of such a creative idea is the Amazon dash button; this is a Wi-Fi enabled button used to make orders for everyday items without having to log on the internet using a mobile phone or computer to make the request (Lowensohn, 2015). Various orders such as ordering pizza or detergent are programmed on the dash button. Though dash buttons are not magnetic, they can stick almost anywhere as they have an adhesive strip at the back, they can be placed in locations where they are most convenient, for example, the button for requesting baby diaper can be placed in the baby’s room.
Availability of return policy XE “return policy” : Online shopping platforms bring better and modern shopping methods in the retail world while at the same trying to overcome challenges present in their platform. One of the main drawbacks of online shopping XE “online shopping” is not having an actual feel of the product until it is delivered. Since the customers cannot test or try out products before they purchase them, online shops XE “online shops” provide their customers with a return policy. Return policies offer an opportunity for businesses to build loyalty with the customers through attracting positive word of mouth to enable repeat purchases in the process (Palmquist, 2015). Some of the aspects contained in a return policy include, the duration of time it takes before the policy expires after a commodity has been delivered, who pay pays for shipping to return the product and how the refund will be received, that is, whether a replacement or cash refund. The majority of the e-commerce stores have a return policy that is provided in the policy section.

ConclusionsThe internet market XE “internet market” has revolutionized the retail world. Internet market has resulted in better methods of shopping; this has created competition in both the traditional brick and mortar XE “brick and mortar” stores and the online shops XE “online shops” which in turn has led to the improvement of service delivery XE “service delivery” in the retail world as retailers work hard to attract new customers and retain old ones. Brick and mortar stores have experienced the adverse effects of the internet market as more customers migrate to the internet based shopping platform. However, the stores still have a role to play in the retail. One of the main advantages of the shops is the presence of physical stores which is suitable for customers that prefer face-to-face XE “face-to-face” transactions due to trust issues. Setting up an online platform does not require a lot of capital. Brick and mortar stores should, therefore, operate in both the internet world and also their physical stores as a way of retaining a significant share of their customers.

References
Abcede, A. (2015). Online Pushes Convenience Button. CSP Daily News. Retrieved 11 January 2018, from http://www.cspdailynews.com/industry-news-analysis/technology/articles/online-pushes-convenience-buttonAnamika, S. (2017). Top 10 Benefits of Online Shopping That Make Your Life Easy. ToughNickel. Retrieved 11 January 2018, from https://toughnickel.com/frugal-living/Online-shopping-sites-benefitsHo, T. (2017). 4 Hidden Costs You Are Paying For When You Shop On Online Sites Based Overseas. DollarsAndSense.sg. Retrieved 10 January 2018, from https://dollarsandsense.sg/4-hidden-costs-paying-shop-online-sites-based-overseas/Hudson, M. (2017). What Are ‘Brick and Mortar’ Stores?. The Balance. Retrieved 10 January 2018, from https://www.thebalance.com/what-are-brick-and-mortar-stores-2890173Lowensohn, J. (2015). Amazon has invented tiny plastic buttons that allow for instant product ordering. The Verge. Retrieved 11 January 2018, from https://www.theverge.com/2015/3/31/8316775/amazon-dash-buttons-turn-homes-into-shopping-cartsPalmquist, M. (2015). The Unexpected Benefits of Product Returns. strategy+business. Retrieved 11 January 2018, from https://www.strategy-business.com/blog/The-Unexpected-Benefits-of-Product-Returns?gko=fea64
Pritchard, J. (2016). Safe Online Payment Methods. The Balance. Retrieved 10 January 2018, from https://www.thebalance.com/safe-online-payment-methods-315821Renfrow, J. (2017). 80% of shoppers compare prices online before shopping in stores | FierceRetail. Fierceretail.com. Retrieved 11 January 2018, from https://www.fierceretail.com/digital/80-shoppers-do-online-price XE “price” -comparison-before-store-shoppingSmith, A., & Anderson, M. (2016). Online Shopping and E-Commerce. Pew Research Center: Internet, Science & Tech. Retrieved 11 January 2018, from http://www.pewinternet.org/2016/12/19/online-shopping-and-e-commerce/Taylor, S. (2016). 6 Potential Downsides of Online Shopping. U.S. News. Retrieved 10 January 2018, from https://money.usnews.com/money/personal-finance/articles/2016-03-23/6-potential-downsides-of-online-shopping
Index INDEX h “A” c “2” z “1033”
B
brick and mortar, 2, 3, 4, 5, 6, 7, 8, 9, 10
C
consumers, 8
cost, 5, 8
customer, 2, 4, 5, 6, 7, 8, 9
F
face-to-face, 3, 4, 8, 10
I
internet market, 2, 3, 4, 7, 8, 10
O
online shopping, 4, 6, 7, 8, 9
online shops, 3, 6, 8, 9, 10
P
physical store, 8
price, 2, 3, 5, 6, 8, 11
R
return policy, 2, 3, 9
S
service delivery, 2, 3, 8, 10