Brick and Click business

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

IT staff required

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.

ASDA is the business I had researched on and this is a profit making organisation. ASDA is privately owned. ASDA provide goods and services which customers require in their daily life. ASDA started selling online for the first time in 1998. Now ASDA is almost expended all over the UK.  ASDA provide grocery and general products, and financial services. ASDA has employed more 140,000 workers at their store across the country. ASDA’s headquarter is base in Leeds, UK. ASDA is a type Retail store with 532 locations in the UK.

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 3^rd 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.