Free Essay. Impacts of Information Technology on Online and Brick-and-Mortar Stores

Brick-and-mortar stores are business that offers their products and services at a fixed geographical location while the online store is found virtually on an online platform. Before the introduction of Information technology, brick-and-mortar enjoyed a monopoly over the retail market. It led to the development of retail malls where customers could do all their shopping in one building, convenient for many shoppers. With the start of the Internet era, retail started shifting to online stores leading to gaining dominance from brick and mortar in most developed countries and even some developing countries (Kitsios & Kamariotou, 2016). There is a tug-of-war between both stores over retail market dominance. The customers are set to benefit from this competition. Online stores have been gaining the retail market in the information technology era. Internet keeps advancing with increments in speed, availability, and dependability in different areas while also being fueled by the availability of cheap and portable devices (Kitsios & Kamariotou, 2016). For these reasons, almost all humans are attached to their smart devices, and what an excellent way to get new customers through their beloved devices. Information technology has dramatically affected how businesses are doing business, leading to the struggle between online and brick-and-motor stores and their future.

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The introduction of online retail has been a division of the retail market between it and the brick and mortar. However, brick-and-mortar has maintained market dominance in the high-value and perishable goods sector. Online retail began in the mid-1990s with the launch of eBay and Amazon stores that have grown to a trillion-dollar business with many stores. It became revolutionary in the retail sector with a lucrative future (Xu et al., 2017). Both types of retail are very competitive and come down to the preference of the customers. Sahin and Topal (2018), from a social perspective, argued that such stores are places for social interactions where people can shop with friends and family while they can mingle with their fellow consumers (Matthews et al., 2016). However, Vysotska et al. (2016) point out that other consumers get quickly bored with shopping or would not like to waste most of their time shopping, conditions that eliminated by the adoption of an online store solution.

Sahin and Topal (2018) describe brick and mortar stores as businesses such as supermarkets, warehouse clubs, and factory outlets. Most old generations, generation X, and baby boomers, prefer this mode of shopping (Xu et al., 2017). Products from these stores are evaluated using all five senses, with the staff giving potential consumers personalized information to improve their confidence in making a purchase.

Online stores are dominantly in two types, those that sell their products to consumers such as Amazon and those marketing platforms for sellers such as eBay. This type of shopping experience is highly valued by generation Z and millennials because of the ease of buying through the click of a button from any internet-connected device (Xu et al., 2017). Internet reduces the cost of searches and transactions, as well as allowing potential customers to compare prices of from different stores more quickly than otherwise by using shopbots and smart agents. Both types of retailers have somehow carved out a niche in the general market by targeting specific generations.

The challenge for both types of stores is trying to keep their current generational market while attracting new customers from the other generational market. With the improvement in technologies, the brick and mortar stores are losing their market to the online store because of innovative ideas such as easy comparison of products on the online platform, 24/7 availability, efficient and safe electronic payment methods, and next day shipping by companies such as Amazon (Guo et al., 2018). However, some traditionally high-value products such as jewelry, vehicles, and other high-value products cannot be sold online because some can be faked like some on eBay, and other products hold too much value.

Most existing start-ups and online stores are going global. They have access to all markets around the world and with support of fast and cheap shipping of products to most developed places. It enables them to cut down costs, such as rental fees and paying a large workforce to manage the stores (Kitsios & Kamariotou, 2016). Moreover, online gives an advantage of the ease of expansion. Brick and mortar require a high cost to cover additional rental space and workforce. With the introduction of smartphones came lightweight applications called apps that run on the device. It has made many people become techno maniacs, which is convenient for online retailers. Online retailers make apps and upload them to the app stores (Guo et al., 2018). Customers download and install the app on their phones. It has enabled shopping to be such a breeze over there smartphones from any place. The apps make the customers only focus on shopping leaving out distractions from other online activities.

The future of both online and brick and mortar stores is promising because of the increase in population and wealth in society. Besides, most of more people continue to embrace technology. An increase in population and an increase in wealth leads to the growth of purchasing power. However, online stores have the upper advantage since technology continuously undergoes improvement very rapidly and refinement of the information technology (Kitsios & Kamariotou, 2016). Besides, developing countries are embracing the future that is technology, increasing online activities, expanding the online retail market. Some retailers such as Target, Macy's, and Nordstrom are changing into click and brick retailers where they have both the online and physical stores, which is a strategy that ensures they are flexible. Products can still be accessed online and then ship from the nearest store to the customer (Guo et al., 2018). Traditional brick and mortar business is vital because customers can shop easily at the closest physical store catering to the needs (Matthews et al., 2016). The convenience-oriented business such as discount and grocery stores are hardly affected the online retails because they are appropriate for time-constrained shoppers who require basic needs.

Online customers through the online platform can access the products while getting fast shipping since the products are delivered from the nearest physical store. Another advantage is that products that are defective or don't meet the customers’ expectations can be returned to the same physical store or exchanged with a better-quality product, saving on time and long-distance transport costs (Kitsios & Kamariotou, 2016). Click, and bricks stores ensure that the advantages of both types of stores reduce the disadvantages brought in by the stores. It also gives the store access to both types of markets all the time since the preference of both customer base catered.

The rise of information technology has dramatically affected many businesses, including both the online and traditional models. Between the two modes of retail, online stores have the edge over brick-and-mortar because of strong backing from information technology, which continues to advance rapidly. Therefore, brick and mortar stores should try offering their products online because many consumers are shifting to online platforms for shopping. Better still, retailers should opt-in for the new clicks and brick strategy since they will possess both the retail types' advantages, therefore, accessing both customer groups from both sides of the retail market.

References

Guo, Y., Xin, F., Barnes, S. J., & Li, X. (2018). Opportunities or threats: The rise of online collaborative consumption (OCC) and its impact on new car sales. Electronic Commerce Research and Applications, 29(1), 133-141. https://www.sciencedirect.com/science/article/pii/S1567422318300401

Kitsios, F., & Kamariotou, M. (2016). The impact of information technology and the alignment between business and service innovation strategy on service innovation performance. In 2016 International Conference on Industrial Engineering, Management Science and Application (ICIMSA) (pp. 1-5). IEEE. https://journals.sagepub.com/doi/abs/10.1057/jit.2015.23

Matthews, D., Blanchflower, T., & Childs, M. (2019). Beyond brick and mortar: The experiences of US female mobile fashion truck entrepreneurs. Family and Consumer Sciences Research Journal, 47(4), 307-323. https://onlinelibrary.wiley.com/doi/abs/10.1111/fcsr.12304

Sahin, H., & Topal, B. (2018). Impact of information technology on business performance: integrated structural equation modeling and artificial neural network approach. Scientia Iranica, 25(3), 1272-1280. http://scientiairanica.sharif.edu/article_20526.html

Vysotska, V., Chyrun, L., & Chyrun, L. (2016). Information technology of processing information resources in electronic content commerce systems. In 2016 XIth International Scientific and Technical Conference Computer Sciences and Information Technologies (CSIT) (pp. 212-222). IEEE. https://ieeexplore.ieee.org/abstract/document/7589909/

Xu, X., Wang, X., Li, Y., & Haghighi, M. (2017). Business intelligence in online customer textual reviews: Understanding consumer perceptions and influential factors. International Journal of information management, 37(6), 673-683. https://www.sciencedirect.com/science/article/pii/S0268401217301378