Online Retailing
The articles examine the evolving apparel industry with regard to consumer tastes and preferences. In the recent past, customers are increasingly shopping online for their apparel. This has led to sustained growth in Amazon, one of the largest online retailers (Safdar 1). The increasing popularity of Amazon.com as a favorable shopping destination has significantly eroded the traditional apparel retailer’s market share. To overcome the stiff competition, some brick-and-mortar stores such as Gap are considering listing their products on Amazon.com. Although Gap and other apparel stores may increase sales by listing products on Amazon.com, there is a possibility that this may discourage customers from visiting the brick-and-mortar stores. Amazon has continually re-injected profits into the business as capital over the last two decades (Gottfried 1). This has led to significant growth, which is a big threat to the traditional brick-and-mortar stores. The connection between the articles is that they view Amazon.com as a formidable force in the apparel market; one that traditional retailers cannot eliminate nor compete with, but the only solution being to join online retailing.
Related: BUSINESS ETHICS: TECHNOLOGICAL RISK
Gap should consider selling products on Amazon due to various reasons. Amazon provides retailers with an opportunity to meet and sell to millions of customers worldwide since it is one of the most visited websites (Rankin 1). This is not possible under the traditional brick-and-mortar business. The increased number of customers leads to a rise in revenue. Another reason for considering Amazon is that it provides small retailers with a level opportunity to compete with industry giants. This is because products are sold on the same online platform where each has equal change of being viewed by a customer. Selling on Amazon can lead to reduced advertising expenditure. This is because Amazon conducts promotions and advertisements on behalf of the retailers (Rankin 1). Another benefit is that selling on Amazon is easy due to the site’s credibility and trust. As such, it would be easier for a customer to purchase on Amazon compared to purchasing on Gap’s e-commerce site.
On the other hand, Gap may encounter some drawbacks in selling products via Amazon. The most evident drawback is stiff competition. Gap will not only compete with other retailers, but also Amazon itself (Rankin 1). In most cases, Amazon can take advantage of its ability to monitor sales and engage in the sale of the products having the highest demand, and on own account. Another source of competition is the numerous retailers on the platform. As such, consumers will most likely purchase unique products only. Another drawback is high commissions on every sale made by the retailer. Amazon may charge a commission of between 10 and 15 percent for a single item sold via the online platform. Another drawback concerns the possibility of having fewer customers visiting the traditional business premises (Safdar 1). Every business prefers interacting directly with customers. Lastly, there are concerns that Amazon might misuse customer data (Safdar 1).
Gap may employ certain tactics to drive consumer traffic to its physical stores. One of the tactics is to include links to its website such that customers purchasing Gap products can be able to trace the source of the product. By knowing the source of the products, the customer may be willing to visit the physical stores during subsequent purchase. Another tactic may involve displaying the physical locations of all stores on the Amazon website. This may encourage consumers to shop on the physical locations nearest to them.
Works Cited
Gottfried, Miriam. “Amazon’s Cloud Cover Makes It a Bigger Threat. Wall Street Journal, 20 May 2016. Web.
Rankin, Jennifer. “Third-Party Sellers and Amazon – A Double-Edged Sword in E-Commerce.” The Guardian, 23 June 2015, https://www.theguardian.com/technology/2015/jun/23/amazon-marketplace-third-party- seller-faustian-pact. Accessed 8 Nov. 2017.
Safdar, Khadeeja. “Gap CEO Says He’s Open to Selling on Amazon.” Bloomberg News, 18 May 2016. Web.
Related:
MT499-1: Evaluate information management, planning, and control in business environments.
