E-Commerce and Supermarkets

Subject: Business
Type: Analytical Essay
Pages: 18
Word count: 4584
Topics: Walmart, Management, Organizational Behavior


The revolution of internet has facilitated the emergence of completely new life style of the people living across all geographical regions. In present time, people across the world depend immensely on the internet sources for gathering information prior making any critical purchase decision. Heavy dependency on the internet has influenced various industries to make necessary adjustments in the business procedure for remaining competitive within the market. Moreover, increasing reach of internet facility and technological advancement has supported organizations to improve the existing customer experience. E-commerce refers to the process of transaction between buyers and sellers through online platforms (Laudon and Traver, 2013). Emergence of e-commerce business has allowed people to purchase their products as per their convenience. It has created direct adverse impact on the popularity of the traditional supermarket stores. E-commerce has also provided large sample size of products, from which customers can select the best-suited one. On the contrary, traditional supermarkets often induce customers to spend extra time and money on the purchasing activities. Hectic work schedule has influenced people shift from traditional purchase process to e-commerce technique considerably. The essay will discuss the future direction of both traditional supermarkets and e-commerce business across the global network. It will include supportive argument with specific real life examples to evaluate the practicality.

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Impact of e-commerce on the supermarket sector

Evidence suggests that appetite of the customers for purchasing groceries and other consumer goods online is increasing at a rapid rate. Various factors including lack of time, comfort, greater alternative options for products, pricing and payment process are contributing towards the massive shift from traditional supermarkets to e-commerce sector (Gangeshwer, 2013). Smartphone evaluation has provided people across the globe with the opportunity to have easy internet access. As a result, it has increased the number of people involved in online transaction procedure over the years. Moreover, e-commerce has enabled people to have access of various domestic and foreign brands simultaneously. The impact of e-commerce evolution is illustrated as follows:

Impact on consumer 

E-commerce has allowed people to shop online that in turn created massive positive influence on the customer’s psychology. Online transaction procedure has enabled people living in different parts of the world to purchase the product of the company. Evolution of e-commerce has empowered customers massively with the offerings of various alternative options (Qin, 2010). Companies like Amazon have included millions of products for the customers so that they can always have large sample of alternative products. Moreover, e-commerce has included products from variety of segments so that customers do not have to worry about availability of a particular product. Maintenance of such large operation scale has assisted e-commerce companies to offer products at a much cheaper rate. Therefore, customers across the global market are aiming to reduce traditional purchases from supermarkets considerably.

Direct communication with customers

Over the years, many studies have argued that e-commerce business does not allow companies to develop direct communication with the customers (Colla and Lapoule, 2012). Specifically, older generation people, who are not that tech savvy, often find it difficult to execute any particular process for ordering products. However, e-commerce companies have rectified this issue by providing excellent customer delivery services. Generally, e-commerce companies deliver ordered items at the preferred location of the customer. In spite of that, many people like to judge the quality of a product prior making any critical purchase decision. It often restricted them to opt for online transaction procedure at the time of buying any expensive product. To counter this situation, e-commerce companies have developed an extremely effective return policy for the customers. Development of such effective return policy along with high quality customer services has allowed the e-commerce companies to build strong relationship with the customers (Qin, 2010). Therefore, it has encouraged people to get involved in online transaction procedure frequently. Improving rate of online transaction clearly indicates towards the dropping sales of supermarkets or retail outlets.

Global market

Conducting business on online platforms has allowed companies to go beyond all the geographical boundaries comprehensively. E-commerce companies use their online presence to share any product or service related information among the targeted group of customers in an effective manner (Eid, 2011). Moreover, people across the world can easily place an order to purchase a product of their liking in an effective manner. As a result, it assists the e-commerce companies to expand their reach easily across the global market. Top e-commerce companies like Amazon, Ebay, Alibaba and Tmall have already established their presence across the global network (Burke and Eaton, 2016). On the other hand, supermarkets or traditional retail stores are geographically restricted. It is almost impossible for an individual from different geographical region to visit a particular supermarket or retail outlet physically. Thus, it indicates the fact that online presence has allowed e-commerce companies to target large number of customers in comparison with retail outlets of the supermarkets. Moreover, global presence has allowed e-commerce companies to gain the trust of the people, which in turn has increased the acceptance of online business across the global market. 

Low cost

Setting up an e-commerce business does not require huge amount of money compared with any other conventional retail stores or supermarkets (Da Costa, 2016). In this regard, low cost of products is believed to be the most tangible positive factor of e-commerce business, as it allowed these companies to keep the price of offered products at the minimum level. E-commerce companies have various ways to reduce cost of operations effectively. Firstly, they often use pay per click, organic search engine traffic and social media traffic as advertising channels for the marketing and promotional purpose. E-commerce allows the companies to use automation of billing, checkouts, payments and inventory management activities (Colla and Lapoule, 2012). As a result, e-commerce companies often require relatively lower employee strength to perform all the operational responsibilities in a comprehensive manner. Maintenance of comparatively small employee strength has assisted the e-commerce companies to keep the cost of operation relatively low (Savrul, Incekara and Sener, 2014). On the contrary, operational process of supermarkets requires massive workforce strength. In addition, unlike supermarket stores, e-commerce business does not require too much investment in the real estate activities. It enables them to reduce the cost of operation considerably. On the other hand, supermarket outlets need to invest in acquiring big space for displaying all the products appropriately. Low operational cost has allowed the e-commerce businesses to offer products at much cheaper rate that in turn has induced people to switch their preferences.

Greater convenience

Emergence of e-commerce sector has transformed the way people across the globe perform their purchasing activities. Generally, supermarket outlets remain open for specific timeframe, which restricts the transaction activities performed by customers to some extent. However, e-commerce websites remain accessible 24×7 hours for booking that enables the customers to purchase products as per their convenience (Chiu et al., 2014). In the present busy work schedule, people often do not get enough time to visit any supermarket outlet on a regular basis. As a result, they have shifted their preferences from supermarket outlets to e-commerce platforms in a considerable manner. In order to improve the convenience level of the customers, e-commerce companies have also provided various payment method for the customers. Payment options such as Cash on Delivery (COD) have allowed them to reduce the threat associated online payment method considerably (Gomez-Herrera, Martens and Turlea, 2014). Therefore, people across various geographical, educational and cultural values have started to use e-commerce sites on regular basis. 

The aforementioned benefits have assisted the e-commerce companies to gain massive level of popularity in an extremely short span of time. E-commerce companies like Amazon and Ebay have emerged as household names across various geographical regions (Kiu and Lee, 2017). The increasing popularity of e-commerce sector has made significant amount of negative impact on the business performance level of supermarket outlets. Statistics illustrate that retail business has been losing its preference in the UK market at a rapid rate over the past few years. It has induced the supermarket giants like Tesco, Sainsbury, Walmart and others to initiate various innovative strategies for maintaining its position in the global market. Thus, it reflects that the emergence of e-commerce business has made considerable amount of impact on the way supermarket companies are performing operational responsibilities in the global market. 

Strategies used by supermarkets to counter the popularity of e-commerce platforms 

The emergence of immense e-commerce has intensified the competition level in the retail and grocery markets considerably. All the prime supermarket companies have seen consistent drop in the sales volume for sustainable timeframe, which in turn affected the overall profitability.  Over the years, supermarket giants have come up with different innovative ideas to deal with market related challenges. 

Effective use of showrooms

As per the outcome of a recent survey, around 88% of the total customers depend heavily on personal recommendations and reviews provided on various online platforms at the time of deciding their purchase method (Business 2 Community, 2015). It indicates the fact that development of strong image within the global market is essential for the companies to induce the people to visit the outlet on regular basis. Many top supermarkets like Morrisons have focused on developing large size showrooms along with updated facilities to improve its reputation across the global market (The Telegraph, 2017). It has been assessed that development of attractive showrooms can easily grab the attention of the customers. However, the impact is restricted by geographical locations, as it would be extremely difficult for the people to travel long distance at the time of purchasing regular products. It has induced the companies like Tesco, Sainsbury, Walmart and other prime retailers to open retail outlets in almost all the prime locations across the world (Birkin, M., Clarke, G. and Clarke, M., 2017).

Development of retail outlets in almost all the prime locations across the globe has enabled supermarket companies to grab the attention of the targeted customers. Every supermarket company has maintained extremely clear atmosphere in all the outlets so that customers can enjoy their time at the time of purchasing any product. Maintenance of such quality atmosphere has enabled supermarkets to tap into customer sentiment effectively. Terms like ‘social intelligence’ have gained popularity among the supermarkets, as it provided with the opportunity to optimize in-store customer experience (Business 2 Community, 2015). Delivery of quality in-store experience has enabled the supermarkets to build extremely strong relationship with the customers. It is known that maintenance of strong relationship with the customers inevitably results into development of loyal customer base. Thus, development of loyal customer base has supported supermarket companies to reduce the rate of customer’s switching towards e-commerce sector.

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Embracing the power of social media

Companies dealing within supermarket industry have concentrated on establishing strong online presence across different platforms including social media. It has been assessed that brand image within the social media platforms can have significant amount of impact on the overall sales volume of a particular company. Companies like Tesco, Sainsbury, ASDA, Morrisons and others have created their official page on platforms like Facebook and Twitter. It has enabled customers to share their shopping experience at the time of visiting any of the retail outlets. As stated by Liu and Park (2015), reviews provided by the customers on social media platforms can enable the companies to understand insight of the customer’s sentiment. Moreover, online presence of the supermarkets has allowed them to share information related to any new offer to the targeted group of customers on regular basis. As a result, people remain well aware about the kind of facilities or offers they will receive at the time of visiting any particular retail outlet. Social media presence also helped the supermarkets to establish strong two-way communication with the customers. It enabled companies like Tesco and Sainsbury to resolve any query or complaint of the customer at the initial stage. Moreover, collection of feedback from the customers has supported supermarkets to make necessary adjustments within the business process, which in turn eliminates any negative perception of the people towards the brand image. Thus, development of strong online presence has aided the supermarkets to maintain their competitive edge across the global market effectively.

Efficient customer service

As per the article by Holman (2016), customer service is among the most critical factors that can decide market presence of an organization. Intense competition within the retail sector has provided plenty of alternative options to the customers, from which they can select best-suited product. Delivery of high quality customer service has allowed the companies to keep the loyalty level of the customers intact. Therefore, supermarket giants like Tesco, Sainsbury and many others have concentrated on delivering high quality customer services to deal with the e-commerce competition effectively. Supermarket companies have provided specific training facilities to the floor staff so that they can become experts in merchandizing. In addition, employees working within the supermarkets are provided with adequate technologies so that they can have ready access to various customer related information.

Waitrose, one of the popular UK grocery retailers, has adopted iBeacon technology within the operational procedure (Business 2 Community, 2015). Adoption of iBeacon technology has supported the management of Waitrose to share product related information in detail to the floor staff. It has, in turn, allowed them to share detailed product knowledge supported by customer review and market performance related data to all the targeted group of customers at the time they visit any retail outlet. Delivery of such detailed information has increased the probability of immediate sale considerably, as it enabled the customers to take decisions backed by in-depth data. On the other hand, technology like Quick Scan mobile application has supported customers to grab detail information like review and rating by scanning a product on the spot. It has also enabled the customers to add products on their basket with one click on mobile application. Thus, it has reduced the time required by the people in accomplishing all the shopping needs. It indicates the fact that development of strong customer service has supported the supermarket companies to neutralizing the time advantage of e-commerce sector considerably.

Personalized shopping experience for the customers

In order to deal with challenges associated with the emergence of e-commerce sector, supermarket giants have focused on providing customized shopping experience to every individual. Therefore, companies dealing within supermarket sector are aiming to use various advanced tools and technologies on a regular basis. For instance, success of iBeacon application within the Waitrose market environment has encouraged Tesco to opt for same application (Business 2 Community, 2015). Moreover, technologies like radio frequency identification (RFID) have allowed the supermarkets to provide cohesive multi-channel experience to the targeted customers (The Telegraph, 2009). On the other hand, Sainsbury has invested massive amount of money in the system infrastructure to establish a single view of its customer. 

Mike Coupe, Chief Executive of Sainsbury, has highlighted the importance of addressing the continuous shift within the shopping pattern of the customers to achieve sustainable growth within the global market (The Guardian, 2016). In addition, supermarkets have aimed to provide value added services to their customers for maintaining the loyalty level. For instance, Tesco has initiated a loyalty card program, which allowed regular customers to purchase products at relatively lower price. In addition, supermarkets have avoided the trap of adopting ‘one size, fit all’ strategy to provide different treatments for different customers. Personalized promotional campaigns like SMS marketing and email marketing have become extremely common among the supermarket companies to attract people across the global market. As per the research conducted by PwC, 40% of the customers feel that knowledgeable sale personnel can improve the overall shopping experience of the customers (Shopify, 2016). Therefore, majority of the supermarket giants have empowered all the sales associates to share their knowledge and experience with the customers so that the overall shopping experience can be elevated significantly.

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Add-on services

Apart from the aforementioned strategies, supermarkets have also focused on offering some add on services to the customers. Services like ‘reserve in store’ and ‘click to collect’ are among the most popular add-on services provided by supermarkets (George, 2018). Inclusion of such services has enabled the companies to maintain greater operational facility. On the other hand, such practices have allowed the customers with the flexibility to collect products by themselves rather than waiting for delivery. In addition, supermarkets have introduced indicative product availability technique to help the customers in locating a particular product within the massive outlets.

A popular departmental store, Nordstrom, has offered services like ‘show nearby item availability’, which has allowed the customers to identify available substitute products within the stores ((Business 2 Community, 2015). Apart from these factors, supermarkets have focused on providing friendly atmosphere, where customers can enjoy with their family and friends. As a result, availability of free Wi-Fi has become extremely common in the departmental stores. In addition, companies are including various fun activities like promotional contest and sport events within their offerings to achieve competitive edge in the market. Tesco, Walmart, Sainsbury and many others have increased the investment level in market research process. It has supported these companies to understand the changing shopping needs of the customers comprehensively. The inclusion of such advanced strategies has assisted supermarket companies to provide a completely new shopping experience for the customers.

Future direction of e-commerce and supermarket sector

The use of innovative business strategy has enabled the supermarkets to reduce the impact of e-commerce sector. However, technological advancement and increasing popularity of e-commerce business have transformed the entire retail market dynamics completely. As per the study conducted by Nielsen, around 20% of the total groceries will be purchased through online platforms by the end of 2025 (My Market Wise, 2017). It clearly indicated the fact that online grocery market is growing at a rapid rate. As a result, departmental stores are aiming to offer multichannel strategies to achieve success within the global market. Besides, almost all the major supermarket giants have already introduced multichannel strategy to deal with the e-commerce companies like Amazon and Ebay. However, it would be difficult for a traditional supermarket company to start competing with e-commerce giants on regular basis. In spite of that, present shopping trend of people across the globe has encouraged supermarkets to include strong online purchase channel as well. Four supermarket giants, namely, Sainsbury, Tesco, Morrisons and Walmart have already forwarded strong step towards the development of online transaction procedure to ensure continuous success within the market.

The future direction of supermarket companies

Walmart’s e-commerce development strategy

Walmart has already established strong e-commerce network across the global market with the use of aggressive strategy. It is among the few supermarket companies, which has developed both online and offline presence across various geographical boundaries. At the initial phase, Walmart has adopted aggressive strategy of acquiring online brands like Shoebuy, Jet, ModCloth and MooseJaw to setup strong e-commerce network across the global market (Forbes, 2017a). Initially, many business analysts criticized the adoption of aggressive strategy of acquiring online platforms. However, Walmart has achieved success in influencing the customers to purchase products on a regular basis. In 2016, Walmart was seen to achieve 60% e-commerce growth in terms of overall sales volume (Forbes, 2017b). 

Presently, the organization possesses the third largest marketplace within the USA market with faster growth rate than eBay and Amazon. Walmart is aiming to use its strong retail footprint to improve the sales volume within the USA market. The company has at least one retail outlet within 10 miles across 90% of the USA market (Forbes, 2017b). It has allowed the company to offer multichannel facility to grab the attention of majority of the customers. The organization has introduced in-store pickup facility, which allowed the customers to pick up their ordered product by themselves. In addition, Walmart has developed strong e-commerce alliances within the Chinese and Japanese market to compete with the e-commerce companies like Amazon and eBay. In order to maximize the effect of e-commerce development strategy, Walmart has provided special focus on supply chain network. Recent survey has highlighted that absence of supply chain efficiency can damage the popularity of e-commerce network considerably. Therefore, Walmart has adopted in-store analytics, API, tracking system and cloud solution to achieve success competitive edge over the e-commerce companies like Amazon, eBay and Best Buy (Forbes, 2017b).

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Tesco’s e-commerce development strategy

As a traditional supermarket, Tesco was one of the first to understand the importance of adopting e-commerce strategy to maintain competitive edge across global market. Therefore, the company has established its online presence at the very beginning (Ma, Ding and Hong, 2010). Presently, Tesco possesses the biggest online grocery-shopping network across the global market. The annual online sales of Tesco were recorded close to £125m in previous year. In addition, the organization is aiming to expand its reach further across the global market. Tesco Direct has over 250,000 registered users across the global market (Ma, Ding and Hong, 2010). Survey has estimated that the rate of registered users will grow in near future as well. It clearly indicates the fact that Tesco is also aiming to offer multiple channels for the customers so that they can purchase products as per their conveniences. Development of strong online presence across the global market has enabled Tesco to complete against various retail market giants comprehensively. Tesco has offered web-shopping experience for the people living within 25 minutes’ drive across the selected stores. It has enabled the company to keep the satisfaction of the customers at preferred level. The company has offered direct discount, codes and cash back offers to attract customers from the global market.   

Sainsbury’s e-commerce development strategy

Mike Coupe, CEO of Sainsbury’s, has highlighted the company’s objective of making significant digital expansion across the global market. In order to improve its digital presence, Sainsbury’s has already taken over popular retail company Argos. In addition, the organization has increased its overall investment considerably in recent years. It has allowed the company to achieve 12% growth in the sales converted through online platforms (Diginomica, 2016). To speed up the popularity of the organization online, the management has also developed a mobile application for the customers. The mobile application has allowed the people to place a purchase order any time and from any place. As a result, it has increased the overall convenience level of the customers considerably. Sainsbury has launched same day delivery scheme for the selected 30 outlets within the London market. As a result, people living close to the selected outlets remain extremely happy and satisfied. The company has aimed to develop multichannel grocery services with the development of online platform, namely, Salmon. In order to develop efficient online platform Salmon, the organization is working closely with IBM Web Sphere Commerce department (Salmon, 2018). Proper development of Salmon platform will provide improved customer experience with the tools like navigation, fast improve browsing, multiple promotions, and click and collect trials. It will also enable the customers to take data driven decision at the time of selecting or purchasing any particular product. Thus, it is clear that Sainsbury’s is aiming to develop strong online grocery platform to counter the popularity of e-commerce business.        

Morrisons e-commerce development strategy

Morrisons, which is one of the supermarket giants, has entered into the online grocery market relatively late. However, after evaluating the success of other supermarkets, Morrisons has also decided to put strong step forward towards the development of strong ecommerce platform. The organization has acquired Kiddicare and its e-commerce platform to establish strong network across the UK market (Retail Technology, 2013). Morrions also was the first to develop specialist wine website, namely, Morrisons Celler to reach maximum number of customers. With the quest of developing strong distribution network, Morrisons has tied up with Ocado, which already has a strong network across the UK market (Retail Technology, 2013). The company’s strategy of ‘doorstep check’ has made huge impact on the overall satisfaction level of the customers, as it has provided refund or replacement option in case of defective delivery of product. Utilization of such innovative strategy has increased the popularity of Morrisons’ online platform considerably.

Future direction of e-commerce companies 

All the major supermarket companies are aiming to use multichannel strategy to counter the popularity of the e-commerce platform. Development of strong online and offline presence has enabled the supermarkets to achieve immense success across the global platforms. The current trend has indicated the popularity of online platform will keep on growing in future as well. Therefore, all these supermarket giants are aiming to introduce various advance tools and technologies to counter the popularity of e-commerce companies like Amazon. On the contrary, companies like Amazon, eBay and others are focusing on to improve its existing quality of service to maintain the faith of the global customers. Future strategies of e-commerce companies are as follows:

E-commerce personalization

Market trend has illustrated the fact that greater personalization and customer experience can encourage the customers to remain loyal towards the company (Kaptein and Parvinen, 2015). However, personalized service requires proper knowledge regarding culture, values, educational background and religion of the people across the global network. Therefore, Amazon has increased its investment level of market research activities to understand the exact needs and wants of the people living across geographical boundaries. Amazon has also used customized advertisements for the people living in specific region, which has allowed the company to achieve greater profitability within the targeted market.

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Delivery drones

Drone delivery system has been regarded as the most advanced way to deliver product to the targeted customer within the given timeframe. E-commerce giant Amazon has invested huge money to manufacture drone, which will be capable of delivering products to the customers accurately (Ecommerce Guide, 2017). It will not only allow the company to reduce the cost, but also minimize the logistic hassles comprehensively.

Pop up shops

Over the years, the purchase process of the people living across various countries has been changing immensely. The popularity of ‘web-rooming’ or ‘show-rooming’ has grown, as people tend to visit local shop to gather product information and then buy the same product online at a cheaper rate (Ecommerce Guide, 2017). The pop up shop will support the e-commerce companies to eliminate this gap between customer visit and purchase decision effectively.

Monthly pay model

Monthly payment or installment model is already been adopted by many e-commerce companies to influence purchase decision of the customers (Hsu and Lin, 2015). Monthly installment scheme has enabled people to purchase expensive products frequently, which eventually improved the profit level of e-commerce companies. Therefore, the strategy will be likely to attract customers across the global market continuously. 


The illustration above has indicated that emergence of e-commerce platform has transformed the way supermarket companies are conducting business. Technological advancement and internet facility have enabled the people to purchase products directly from different e-commerce platforms. However, establishment of both online and offline network has supported supermarket giants like Tesco, Walmart, Sainsbury and others to compete with the e-commerce giants like Amazon and eBay effectively. Such trend will eliminate the availability of traditional supermarket with only physical presence. In fact, supermarket companies will strive to improve the efficiency of multichannel strategy so that they can handle the competition from e-commerce sector. Therefore, the operational process of supermarket giants can become similar to the operational process of e-commerce companies.


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