E-commerce Advantages and Disadvantages
For /Advantages
Cover world wide customers
Targets disabled people
Low cost to start off
Low maintenance cost
No display area required
High sales and profits
trading 24/7
high customer service
Disadvantages
World wide Competitors
Laws and Regulations
Handling and security cost
Storage area required
Delivery issues
E-commerce system in ASDA
Brick and Click
Evaluate the use of e-commerce in
ASDA
Bricks and clicks is a term used in business which indicates that
business has shops or outlets (bricks means physical presence) and also deals
online (clicks means internet presence). In this task I will evaluate the use
of e-commerce in ASDA. But before I start my task I will briefly tell
information about ASDA.
Introduction of e-commerce in a business bring a lot of positivity
but on other hand it also have disadvantages as well.
Introducing e-commerce in ASDA will have effect on its audience
(customer) because in this way ASDA will be able to sell their products all
over the UK and Ireland. Mostly online
traders sell their products worldwide but in this case online trading will
allow ASDA to cover customer nationally. Another, advantage of online trading
is that ASDA would be able to target the customer who are disable or don’t have
time to visit local store. Again it helps ASDA to increase their customers. However
on other hand ASDA has to face competition from companies all over the world.
Not only have that, ASDA also had to advertise on the internet to make sure
that customers know that ASDA sell their goods online.
Furthermore, online trading is very easy to start off and required less
cost to start and maintain. ASDA don’t need to buy a very big store to hang all
products with walls. There are website like eBay, Amazon which take nominal
cost of process details of your products. Then there is no need to hire lots of
worker to keep your shop running, as the website automatically deals with
customer itself. However ASDA’s ‘brick’ store needs to hang all goods with wall
to make sure every customer can see it. So there is a definite advantage for
ASDA that they don’t need spend million to start trading online. But there are
some data handling and security issues. Because there is a high risk of getting
the system data destroyed by hackers and virus. So it may raise ASDA’s cost as
they will need to buy security software to get rid of virus and etc. To extend,
ASDA also has to be aware of law and regulation about data handling. If in case
ASDA provided their customer’s data to 3rd party may have to pay a
lot of fines. So ASDA has to keep customer’s personal data safe and only can use
when it is required.
Additionally, ASDA has to
arrange training for the employee to make sure that they know the laws and
regulations about online data records and etc. There are also IT professional
required to keep website maintaining and running. So these all increase ASDA’s
running cost which is a disadvantage of e-commerce.
Next, ASDA don’t need additional
areas to display their product while trading online. However ASDA need space to
keep the stock and it is particularly difficult to arrange space when customers
return goods at to a store but they have bought into it from another store. So
there may be some charges of sending goods back to stores where they have come
from. Or sometime business has to hire space to keep all stock safe, which
ultimately increase to cost of handling the stock.
The
biggest advantage of online to ASDA is that they can sell their goods everybody
in the UK or Ireland which means more customers. More customers mean more sales
and which will result in more profits. Without e-commerce ASDA will only be
able to sell goods to a customer near their store’s location. Another option
which is 24/7 trading, it means that ASDA can sell their products 24 hours a
day and 7 days a week. So again its flexible selling time enhances sales as
customers can buy product whenever they want.
Trusting customers continues to be a problem
in online business (especially sell goods through eBay). Because when customers
commit to buy a product, there is no guarantee that customers will pay you or
will send payment into your account promptly. Sometime customer doesn’t have
enough money into their debit card and payment is made by a bank and then later
on when the goods are dispatched amount is snatched back by bank automatically
if customer don’t insert money into their bank account.
A
delivery issue is a very common problem in e-commerce. Whoever ASDA has its own
delivery vans have improved a lot but still there are delivery issues. Goods
are mostly delivered between office working hours. So the goods have brought
back if customer is not at home to pick up the delivery. Usually then there is
delay of 12 to 48 hours and then customer’s goods will be redelivered, which is
really frustrating for customers. Large and glass product may get broken during
the process of transportation. Then ASDA has to pay extra fee for spending new
product again to customers. There is also loss of products and loss of time
too. Furthermore customers may force ASDA’s expenses of transportation to rise,
because ASDA have to accept return if customer don’t want the product. So in
this way it will increase ASDA cost as it has to pay additional cost for
transportation.
E-commerce’s success has
brought in big companies like Tesco and etc to establish e-commerce. There is
advantage of global marketplace but on other hand it has disadvantage for ASDA
and especially for small retailer how may not sell their products online
because of huge price competition from large companies. Large organisation can
also advertise and can use promotion methods to attract online audience, while
small retailer cannot bear expensive of the advertisement on internet. So ASDA
has to advertise a lot to increase their online sales.
E-commerce also enables ASDA to provide fantastic customer service. As
websites allows customer to find the products quickly. Then ASDA’s website
enable customers to create free account where they can see when products will
arrive and record of details of product bought. PayPal provides super services
which allow ASDA and customer to do secure payments. Customer can also share
the information of the products to their family members electronically from
website. ASDA can easily get customer contact details and can send them special
offers (persuade) to buys goods for them. Customer can ask question about the
product 24 hours a day. On other hand staff at local store may not deal with
customers effectively. Sometime employee’s behavior can be uncomfortable for
customers.
Keeping all
advantages and disadvantages in mind I think e-commerce is very effective and
better way of trading apart from delivery and security issues. But in ASDA’s
case e-commerce has boosted their sales. Personally what I like about
e-commerce is that customers can buy goods at any time from their home. In
conclusion I would say that e-commerce bring more advantages in the business
than disadvantages. As this year (DEC 2012) on Christmas online sales has been increased
by 18% from previous year Christmas which indicates us that e-commerce will be
more productive than selling goods by local store. It would be wonderful if
speed and accuracy of goods delivery will boost in future.
