E-commerce Flashcards
What are the advantages of e-commerce?
- Start up costs allegedly ‘lower’
- Get products to market faster
- Can browse and compare - consumer +ve
- Worldwide market as geographical barriers reduced
- Carry bigger and more varied stock
What are the disadvantages of e-commerce?
- Inability to touch, test etc. - consumer -ve
- Website development and maintenance costs
- High returns rates
- Consumer denied ‘landscape of consumption’ (shop, high street etc.)
- Economies of distribution - costs more to despatch and deliver than product price
- Problem estates - certain areas don’t get delivered to due to risk to safety delivery drivers
- 25% unhappy with delivery time
- More waste due to more packaging
How much is the UK online market worth?
Roughly £50bn. = 15% retail sales
How much of the grocery market is online?
5/6% = £7bn
How many shop closures were there in 2012?
1779
What are the online market shares for the big grocers?
Tesco = 37% Sainsbury's = 17.4% ASDA = 17.2% Ocado = 12% Waitrose = 3.9%
What are cross-mode relationships?
Weltevreden, 2006
- Neutrality: no interest in e-commerce
- Modification: Loyal to physical store, occasional e-commerce
- Complementarity: equal use
- Substitution: shoppers almost solely e-commerce users
What is the ‘e-society’ (Longley et al., 2008)?
Created a geodemographics classification system purely for e-commerce to assess the likelihood that individuals of certain characteristics will use it
Who said e-commerce was the death of geography?
Cairncross, 1997
What are the 3 factors that mean there is geography to e-commerce?
Age
Income
Urban/Rural dominance
How does age affect e-commerce?
Elderly have less internet access - but likely to be less of an issue in the future
Need to know age structure of locations
How does income affect e-commerce?
Positive correlation between wealth and e-commerce use: wealthy have greater access to internet
> 90% households with income >£75,000 have grocery shopped online
What are the two arguments for urban and rural dominance in e-commerce?
Innovation-Difusion hypothesis
Efficiency hypothesis
What is the Innovation-Difusion hypothesis?
E-commerce will be more dominant in urban areas due to greater technology and tech. start ups
What is the Efficiency hypothesis?
E-commerce will be more dominant in rural areas due to greater distance from physical stores
‘The Client’ case study for understanding e-commerce data:
Clarke et al. (2015)
Sample taken (40% pop.) but includes all stores in Yorkshire and Humberside
Results: high % in rural areas
Found inverse relationship between store accessibility and e-commerce use - geodemographics important influence
Knowledge on access to competitor’s stores important e.g. Flamborough Head: low internet use and poor access to client’s stores, BUT good provision by competitors
What are the key drivers for e-commerce use?
Geodemographics (AB group)
Rural effect
Distance to any store
Distance to company store
How much of the ‘click & collect’ market does the grocery market occupy?
88%
Why have ASDA not entered the convenience market?
Fear it is becoming saturated, so aiming to win the ‘click and collect’ battle - want 1000 stations
What are the current ‘click and collect’ locations?
Store car parks
Drive-through stores - Tesco saves £2 a shop doing it this way
Unique collection points e.g. Business park, Reading
What are the potential ‘click and collect’ locations?
Petrol stations Transport hubs e.g. airports, underground School/Universities Independent shops: Collect + Park & Rides Sports Clubs
Why is the underground an emerging new location for ‘click and collect’?
Huge consumer market - targeting commuters who don’t have time to do a shop in an actual store
How many ‘click and collects’ are there in undergrounds?
Tesco: 7 initial, plus 8 new ones
Sainsbury’s: 7
Waitrose: 6 - temp. controlled lockers i.e. refrigeration
ASDA: 6
BUT: Tesco and Sainsbury’s set to pull out due to poor sales - surprising as seems prime location
What are pop-up stores?
Temporary stores erected for a sole purpose and will then leave
Enter food deserts
Potential for use at events and festivals etc.
