Impact - Importance - Marketing Techniques and Risks

Question: Describe about the Impact, Importance, Marketing Techniques and Risks. Answer: Introduction: E-commerce has spread its wings all across the globe at a rapid rate over the past few years. It has emerged as a challenge for the brick and mortar based retail industries to be at par with the e-commerce platform. There has been a shift from the traditional practices that were followed in the business to the new and improved e-commerce processes. Along with the retailers, e-commerce has also largely impacted the consumers. Impact of E-commerce on Retail Industry: There has been a great impact of e-commerce on the retail industry. Brick and mortar based retailers and wholesalers are now compelled to sell their products on an online portal looking at the general trend in the market and among the consumers. Following are the impacts that the retail industry has faced upon the success of e-commerce. The density of sales for the retailers has largely dropped over the past few years. There is an additional expenditure that has come up for the retailers in order to create strategies to be at par with the e-commerce counterpart. The margins have also dropped due to increase in fixed costs and capital expenditure (Dalal, 2014). For the Business-to-Business trading, a large number of brands are now collaborating with the e-commerce websites and web-based portals to conduct their sales. There are also huge discounts that are offered on the e-commerce platform which is otherwise not seen at the retailer end. For the Business-to-Consumer trading, a large population of the consumers now prefers the online based exchange of goods rather than visiting the shop at the retailer end (Jstor.org, 2016). Importance of Customer Information for E-commerce Business: Customer information is a vital piece that holds great importance as far as e-commerce is concerned. By keeping an account of the customer information, it becomes easy for the e-commerce experts to analyze the choice and preference of the consumer through the business intelligence and data analytics. Also, the target customers for a particular product type can be predicted with the use of customer information. Marketing strategy is also developed keeping the customer information in consideration. For instance, if a customer is interested in a particular product type and is seen purchasing the same kind of product time and again, then the customer information such as contact number or email address is used to alert the customer in occurrence of special deal or offer. It helps in achieving better sales and also engages the customer with the brand. It also helps in solving customer grievances in a timely fashion by keeping an account of customer information. Issues revolving around payment, shipment, delay in delivery or product feedback can be easily recorded with the help of customer information. The same is also used to improve upon the areas wherein the customer does not feel satisfied or well-served. The task is covered in the maintenance and management of customer relationship (Pigford, 2013). Marketing Techniques of E-commerce: Marketing strategy is a significant entity that is a must in the present world of fierce competition in the market. Following are the reasons that mark the importance of a well-defined and well-planned marketing strategy: For generating an interest and craze among the consumers in regards to a new brand or a new product before it actually enters in the market. For improving the sales associated with a particular product. Customer relationship is also covered in the marketing strategy which helps in attaining better customer loyalty and customer satisfaction. To gain a competitive edge among the others in the market and to establish a strong name as well (Zorzini, 2015). There are a number of marketing strategies that are followed and used in the e-commerce world. Some of these strategies are as listed below. Content Marketing Strategy: It is always said that content is the king. Content Marketing Strategy is based upon the same guideline as it is important to have quality content in place in order to attract more and more consumers. Before the product is launched in the market, it is essential to create a buzz about it and the key to the same is content in the form of blogs, pictures, audios and videos that are circulated all over. It makes people aware about the brand or a product before it is actually introduced in the market Email Marketing Campaign: This is the marketing strategy where customer information and its importance come in the picture. Email addresses of the customers from the database are used to spread the information about the new product. The marketing campaign makes use of a series of emails informing the consumers about the product details and the launch date (Roberge, 2016). Social Media Marketing: Social media as a marketing platform is the latest addition to the marketing technique. Although it is a newer concept but social media marketing has marked itself as one of the most important marketing technique that has become a mandate for e-commerce platform. Promotion of a brand or a product on social media platforms such as Facebook, Twitter and Instagram is now must and requires a dedicated team for the task. Personalization Strategy: The human element is always missing from e-commerce and the way business is done under it. The gap is filled with the personalization strategy as the consumers always have an element doubt with the companies they have never heard of in the past. Strategies like addressing the customer with his/her first name in the email give a personal touch and make the customer more connected with the brand. Loyalty Program: Loyal program is also a new concept which includes providing reward points or cash back to the customers once they make a purchase. This helps in making the customers stick to a particular e-commerce website and also helps in developing huge customer base. Security Issues with E-commerce: There are a number of advantages and importance of e-commerce practices both for the business and for the consumer. On the other hand, there are also a number of security issues that come with e-commerce that need serious attention. Following are the requirements that need to be fulfilled for the security of the information on an e-commerce platform. Privacy: The information that is present on the e-commerce portal must not be accessible by the unauthorized users. Integrity: The information must only be modified or altered by the authorized set of users. Authentication: For every single functionality and feature there are user privileges that must be granted. For the users that do not have the permission to perform a certain activity should not be allowed to perform the same. Non-repudiation: An acknowledgement must be generated to ensure that the information that was meant to be received has been correctly received (ORaghallaigh, 2016). Security Threats and Attacks: Denial of Service Attacks: These are the attacks when the service becomes unavailable due to generation of an unnecessary traffic towards a particular service. Phlashing: It is also known as the permanent denial of service attack in which the attackers cause such damage to the system that it demands replacement of the hardware or the re-installation of the same. There are unauthorized changes made to the firmware. Brute Force Attacks: These are the attacks in which all the possible combinations are attempted to break in to the cryptographic encryption of the system. Phishing: In these attacks masquerading of the user is done to gain vital and private information such as username, password and other confidential information. These details are then used to enter in to the system in an unauthorized manner. Measures to enhance the Security of E-commerce Platforms: Firewall: Firewall is a wall that is created between the system and network that filters the exchange of information between the two parties. Unauthorized access is avoided with the help of firewalls. Strong Passwords: Use of strong passwords makes it difficult for the attackers to break in the security of the system. There are a number of password combinations which include a defined length and presence of varied type of characters that are difficult to crack. Also, one time passwords which are sent to the users email address or phone number makes it extremely tedious for the attacker to hack the password. Use of SSL SSL stands for Secure Socket Layer which is a protocol that enhances the security of the data transmitted over web. It makes use of cryptographic techniques for securing the information with the help of both the public and the private keys. HTTPS: HTTPS is an enhancement of HTTP and stands for secure hyper text transfer protocol. It is used to make the web pages secure by avoiding the attacks by the intruders. Role of Social Media in E-commerce: Social media as described above has emerged as an important platform for marketing and also for maintain customer relationship post product launch. There are a number of social media platforms such as Facebook, Twitter and Instagram which are used by the e-commerce associates to manage and maintain the customer interaction. These platforms are used to understand customer choice and preferences and are also used to enhance the customer involvement. Features such as product rating, customer feedback and issues are collected over the social media platform and it enables the customers to feel more connected towards a particular brand. Apart from the marketing medium, it is also used to address and maintain the relationship with the customer after the product is launched in the market (Sharma, 2015). Recommendations E-commerce is beneficial to one and all if it is correctly used and implemented. It is recommended to use to the newer marketing strategies such as social media marketing but the focus should not be minimized from the traditional marketing practices. This is because there are still a lot many customers that resist adapting the e-commerce business practices. Also, the security of the e-commerce platform can be enhanced with the use of anti-virus and internet security software. Both the software must be installed at all the network entry points to ensure that the confidentiality, integrity and availability of the information in not at all impacted. Conclusion: E-commerce is the platform that has evolved in the recent years and has taken the market by storm. There has been a huge impact of e-commerce on both Business-to-Business and Business-to-Consumer trading practices. Retail industry has had a great transformation with the launch of e-commerce processes and techniques. Customer importance plays an important role in the world of e-commerce and there are a number of marketing techniques that are available such as social media marketing, personalization strategy, email marketing campaign, loyalty program and many more. With so many benefits of e-commerce, there are also a few concerns associated with the concept with security as a primary concern out of all. There are a number of security threats that e-commerce is prone to which may adversely affect the privacy, availability and confidentiality of the information. Attacks such as denial of service, brute force attack and phishing are now very common which can be tackled by the use of stro ng security mechanisms. References: Dalal, M. and Tandon, S. (2014). E-commerce boom hurts brick-and-mortar retailers. [online] https://www.livemint.com/. Available at: https://www.livemint.com/Industry/f6eARBcJOWrTZTzuDcZZzI/Ecommerce-boom-hurts-brickandmortar-retailers.html [Accessed 24 Jul. 2016]. Bakos, Y., Lucas, H., Oh, W., Simon, G., Viswanathan, S. and Weber, B. (2005). The Impact of E-Commerce on Competition in the Retail Brokerage Industry. 1st ed. [ebook] Information Systems Research. Available at: https://www.jstor.org/stable/23015803?seq=1#page_scan_tab_contents [Accessed 24 Jul. 2016]. Pigford, J. (2013). Why customer data is important for your ecommerce business. 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