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Examination Of E-Commerce Essay, Research Paper

EXAMINATION OF E-COMMERCE AND THE RETAIL CLOTHING INDUSTRY AT THE UNIVERSITY OF

Introduction

When people think of retail and technology, they often think of images of shopping at a click-of-a mouse. An e-commerce solution for a retail clothing business is the incorporation of all aspects of the business operation into an electronic format. Before the Internet, companies could use three channels to sell clothing: 1) person-to-person – through stores; 2) written – through mail order catalogs; and 3) telephone using toll-free numbers. The Internet combines and expands these different channels. There is no doubt that the Internet has revolutionized the way people purchase products, especially clothing. The old method in today s marketplace to purchase clothing is to go to the traditional brick-and-mortar business; however, many well-known businesses are starting to establish their presence on the Web while maintaining surface stores such as JC Penney. Consumers spend about $3 trillion a year in retail, and more and more of that bounty is going toward on-line purchases. In fact experts predict that e-commerce will skyrocket from its current $6 billion mark to nearly $3 trillion by 2005 (Kitts, 2001). It is no surprise that traditional stores are re-evaluating how they do business, and technology is playing a big part in this retail industry revolution. Technology is as important to retail as it is to any industry.

Purpose of the Study

The purpose of the study was to review the purchase of retail clothing products via e-commerce to determine the profitability of retail clothing stores with the aid of the Internet. Retail clothing stores should implement an e-commerce solution with its surface stores. Important factors that we took into consideration regarding the benefits of an e-commerce solution were: improved efficiency, expanding market exposure, customer-service orientation and providing up-to-date information.

Methods and Procedures

Secondary research was conducted through the Internet for articles and web sites regarding e-commerce and the retail industry. This medium proved to be very helpful because e-commerce is still a fairly new technology, and the Internet will provide the most recent data available. Printed publications will not be able to adapt to changes as fast and efficient as electronic publications.

We distributed a questionnaire to 100 students at the University of (see Appendix A for sample questionnaire). This segment of the Houston population was selected to survey because the students were readily available, gave instant feedback, majority are CIS majors, and because they are indicators of how the internet/technology will be progressing. We were very pleased with the response time because of the time it saved us and the possible costs of mailing these questionnaires. The questionnaire format was chosen as the best survey technique because it provided us with concrete answers which could then be easily transferred to quantitative data, it was efficient and specific, and it allowed us to direct our questions according to the purpose of the report.

Establishing New Frontiers of Efficiency

In addition to changing the way retail stores get and keep customers, these companies are using the Internet to reduce costs out of their service and supply processes. Jane Lindner states:

Business customers are shifting purchasing, logistics, and overall supply management to the Internet to shorten supply chains. With better information about schedules and inventory throughout their supply system, companies expect to be able to tune manufacturing levels, postpone final configuration decisions, cut handling points out of distribution networks, and eliminate unnecessary transportation and warehousing costs. Firms that exploit the Web to manage their supply chains boats finished goods inventory turns of 20 or more four times their industry average (1999).

When a retail clothing business has incorporated an e-commerce solution, the business will experience a lower operation cost while at the same time increasing its profit. The e-commerce solution will allow businesses to eliminate unnecessary paperwork. All paperwork and data can be transformed into an electronic format. Thus it will eliminate valuable shelf space and data can be searched and accessed in matter of seconds. E-commerce will also automate the sales process. Customers can point and click on the clothing they wish to purchase, fill out the customer information, and the product will be shipped and received in a matter of few days (unless a back-order exists). The administration department does not have to fill out any paperwork because the customer has done it already. Thus, the efficiency will be greatly improved. As Kitts stated, Efficiency is the retail industry s bread and butter, so technology becomes even more important as the country s labor drought continues (2001).

Expanding Market Exposure

With an e-commerce solution, the retail store that traditionally closes at 9:00 p.m. will be open 24 hours a day, 7 days a week. People from anywhere in the world with an internet access will be able to visit the site at any given time and go shopping . A traditional surface store is normally limited to serving its customers in its local geographic region; however, an e-commerce solution will open the retail clothing business to an on-line global market. Essentially, retail-clothing businesses will greatly increase their market exposure. In the case of JC Penney, it is the largest national traditional surface store using the combination of catalog operation and the Internet for the sale of its products. JCPenney.com has generated $79 million in sales via the Web through June 2000. In an interview conducted by Elizabeth Blakey with Paul Pappajohn,

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