Companies have altered their operations as they increasingly rely on the internet for business. The Internet's ability to overcome geographical barriers has made it simpler for businesses to reach out to potential customers.
Online sales have become a popular and effective means for businesses to exchange information, documents, goods, and services over the Internet. Despite potential hurdles in implementing personalized business strategies, companies that adopt such methods are adjusting their operations accordingly. This trend not only affects brick-and-mortar stores but also influences consumer behavior as evidenced by research on online sales impact from studies conducted by Sindhav and Balazs (1999) and Reardon (2002). The purpose of this report is to present an overview of literature analyzing the impacts of online sales on IKEA stores.
Over the last 20 years, Nua Internet Surveys have obs
...erved significant developments in internet usage, revealing a global increase in the number of internet users across all regions. In 1999, there were 171 million users and by March 2000 this had risen to 304 million - an impressive surge of 78 percent (USIC and IITA, 2000). This expansion has given consumers greater access to products and services than ever before. To meet evolving customer needs, companies are introducing new strategies to expand their market reach. However, such measures also raise ethical and legal concerns regarding information security (Ram et al.).
Since 1999, there has been an increase in online competition which has led manufacturers to keep their prices low (ISPO, 1997). The Internet's ability to connect with a vast customer base without any geographic restrictions has made it the main catalyst of the business revolution. Online shopping is becoming more popular because it offers
easy accessibility, availability at all times, updated information, and lower costs.
In today's fast-paced world, online shopping has become essential. To keep up with consumer demands, service providers must address new challenges and provide effective solutions. Interactive services play a vital role in creating more online retail options that seamlessly integrate into customers' lives. Retail chains recognize the importance of the internet and the potential loss of customers to agile competitors if they don't establish an online presence.
According to Grau (2006), numerous popular brick-and-mortar retailers have shifted their focus to the internet in order to benefit from the substantial expansion of e-commerce. Hyman, the chairman of Verdict Research, informed Cantos - an online PR service - that global online shopping has become almost as lucrative as department store sales. He stressed that traditional department stores must adjust to keep up with the evolving retail environment.
According to Verdict, online retail experienced a 30% growth rate in the previous year and is expected to continue growing at a slower pace due to high-speed internet accessibility and online shopping habits. However, Verdict argues that online sales do not generate new income for retailers as most of it comes from customers who would have bought from physical stores. Thus, retailers need to integrate online channels into their business models to stay competitive in the industry.
According to Hyman, department stores and retailers that are considered "pure players" have not achieved success, resulting in a significant number of them going out of business. This highlights the difficulties these types of businesses face.
Traditional retailers face challenges from the rise of online retail as both physical and online capabilities are necessary to remain competitive
in the current market.
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