Traditional Retail vs. e-Commerce

Sir Shannon Scott Williams

MGMT230

Unit 3: Discussion Board

The idea of converting a traditional walk-in store into an e-business takes careful planning and consideration. For those who are interested, they should plan a gap analysis first. A gap analysis is a technique used to “help managers decide upon marketing strategies and tactics” (Marketing Teacher 2011). This helps determine where the business currently is, and where management would like the company to be. In the case for a shoe store, managers are practicing gap analysis to determine if converting to an e-business would be more profitable. If decided to convert to e-business, management should arrange and execute a well planned transition or else risk failing.

Using the gap analysis, managers will to need consider tactics and strategies for product development and how to penetrate a target market. They should research as much as possible to authenticate possible profit margins. For the shoe store, walk-in customers restricts only to the local community. A manager using gap analysis can consider where the company would like to be by implementing, or reformatting to e-business. This will open target markets to the entire world. A new format may result in a change in prices. Prices will be more competitive online versus a competition level for prices within a local community.

To begin the transition, notify customers that the walk-in store will be changing to an e-business for customer’s easy access. Customers should be explained that they will be able to shop the all the same products online. It is highly recommended that the store implement a marketing campaign informing customers the change to e-business, this is also a gap analysis technique. Not letting customers become aware will risk losing several customers who have enjoyed the former shoe. Advertisements for mass email newsletters, SEO (Search Engine Optimization), local advertisements, and other marketing tactics will be needed for the campaign to be more successful.

Other planning should be the placement of employees and their new tasks. Compared to the traditional walk-in store, cashiers, sales persons, greeters, etc. will have new responsibilities. In addition, management could consider losing some of their staff being that some positions will no longer be needed. For example, a greeter could be effective for a walk-in store, however for an e-business; a greeter could be replaced with an automated answering service. This is also useful to determine gap analysis effects for employees.

The shoe store does not specialize in the internet industry, so it is recommended to consult with web-development professionals to design the online store. The “architectural implementation is to establish a computer system consisting of the databases, applications and user-interfaces” (Metal Pass, LLC. 2002). Proper internet security should be implemented to protect customer’s private data. VPS (Virtual Private Server) or standard servers should be used to store all online data. Also, user friendly graphic design should be coded throughout the website so viewers can easily navigate. Product development for target markets also affects gap analysis.

The new e-business should allow customers a variety of methods for checkout, such as PayPal, credit/debit card, money orders, and checks. In addition to checkouts, a variety of methods for delivery should be offered such as standard, 2 day air, and next day delivery.

In conclusion, gap analysis is a useful technique to determine where a company would like to be in the future, such as a walk-in store to an e-business. Although a company may go through many changes, if the opportunity costs can provide a return, then new change is well worth it. Gap analysis may involve labor, equipment, location, and product development. Although these are the mere basics, gap analysis can become as technical as the investigator specifies. Prices for everything between one option and another, will ultimately determine which is best for the company.

References:

Architecture for transformation into e-business. (2002). Retrieved from, http://metalpass.com/metaldoc/paper.aspx?docID=198

Gap Analysis. (2011). Retrieved from,

http://marketingteacher.com/lesson-store/lesson-gap-analysis.html

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