Analyze the challenges that organizations face in the effective transition betwe

Question

Analyze the challenges that organizations face in the effective transition between selling products using the traditional brick and mortar marketing channel and selling products online. Synthesize the strategies that organizations like Zara and Pier 1- two companies that are having difficulty developing eCommerce capability can implement to increase the effortless movement of customers between the traditional and online channels.

What are the benefits and limitations of selling through a store front and online?

Explanation / Answer

Zara and Pier 1 are both well known for their brick and mortar stores. They have a recognition among the consumers for being so. However, these companies are facing challenge in developing an online market. There are several things that differ between an online and offline business.

Customers: The customer mindset and consumer behavior is an important factor. The first thing to analyze is to check why the customers purchase through brick and mortar stores? The answer could be it is time saving, the experience of purchase (the ability to view and try the product) or general mentality. At the same time there are different types of customers for the online stores. It is also comparatively much easier to compare products (purely on specifications) online. This makes the customer stickiness a challenge for new online store. Companies like Zara and Pier 1 are experienced in managing their stores but the same experience and approach to handling customers does not apply to the online marketplace.

In order to remedy this, companies must segment customers separately. Must not roll out same marketing and sales strategy for online and offline divisions. Treat the online customers differently than the offline customers

User experience: Brick and mortar stores have traditionally tried and tested methods to improve customer experience. Salesperson solicitation and other means have proven successful for many stores. Online markets does not provide businesses with this facility. As a result, for a traditional business like Zara and Pier 1, it may be difficult to engage customers online. The key is to provide superior user experience than the competitors. However, the online markets are still evolving and requires a lot of trial and error to get the user experience strategy right.

Providing excellent user experience online can help companies engage visitors and improve conversion. Instead of taking input from the traditional store business, the organization should gather input from the online industry and implement them in to user experience development.

Capabilities: The team that has built a successful brick and mortar store may not be the right team to lead the online stores. It simply boils down to skillsets and experience. The likes of Zara and Pier 1 have always focused on finding people who are experienced and skilled at running the traditional store business. Their skillsets and ideas may not be just sufficient to compete online

Ideally, Zara and Pier-1 should have a separate online entity built from ground up. Assembling a team that has experience in handling online business will definitely improve the company’s chances in the online marketplace

Additional requirements: The brick and mortar stores operates with goods distribution model. This means goods are manufactured at a plant, then sent to distributors which are further shipped to local warehouses and then to stores. Online business brings additional responsibilities such as shipping and delivering the goods to customers. This also means that there is a need to handle orders and customer services department separately.

To tackle these additional requirements are comparatively simple as there are vendors available to handle these tasks. However, traditional business should plan these requirements and implement them with care in order to avoid pitfalls.

The points above does no way mean that online business is better than brick and mortar store business. Both of them have their benefits and limitations

Online Business

The benefits of online business are many. It varies widely across different industries and domains. Some of them are:

The drawbacks of online businesses also often cause downfall of the venture. Some of the drawbacks are

Store front Business (offline business)

These are traditional brick and mortar stores that sell goods to consumers. In spite of all the online trend, these can be very successful. Some of the key benefits are

The store front businesses also have a few drawbacks that may deter some customers and eventually impact the business negatively. They are

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