ONLINE & OFFLINE RETAIL ENVIRONMENT

The online and offline retail environment are distinct from each other. In the offline retail environment, there is a direct channel of communication between the consumers and retailers. The direct contact is through one to one communication, emails, phone and others. The online retail environment is also known as multimedia retail environment because it can be accessed through e-channel (Acimovic et al., 2014). There is an indirect communication between the consumers and retailers in which the contact can be through the third parties such as brokers, agents, and others. The pull strategies are used by the offline retailers in which the sales can be improved through direct marketing and personal selling. The push strategy is used by online retailers mainly, but the companies are using both the strategies to maximize their output by optimizing their availability.

Online company to consumer supply chain

A supply chain is defined as the chain in which complex and dynamic supply and demand network are represented. The chain comprises of human resource, activities, information and the resources involved in transferring product and services to the end user.
The supply chain of the online company is mainly connected with the internet. The Internet plays a main role in connection all the processing from suppliers to the end consumers. The e-commerce is rapidly increasing in the market, so the growth of the online business is increasing day by day (Richards et al., 2015). The supply chain of online retail business is connected with a warehouse where all the stock of a business is maintained. The purchasing department is connected with manufacturing department and another department. All the departments of a company are connected through the internet with each other. The manufacturing department is connected with purchasing and sales department. The chain starts from purchasing of raw material from purchasing department then it is delivered to the manufacturing department, then the manufacturing goods transferred to the warehouse for keeping goods and finally the goods are transferred to the sales department. When the order is placed, then the sales department supplies goods to the end user and all the process is done electronically.

Offline Company to consumer supply chain

The supply chain of an offline retailer is simpler than the online retailers. The offline retailers are having a manual track record of the supply chain process. The raw material is purchased by purchase department then the raw material is transferred to the manufacturing department for converting them into final goods (Yu et al., 2015). The manufacturer ended their goods to the wholesalers who distribute or sell their goods to the retailers. The consumers purchased their products from the retailers directly. There is a one to one communication between the retailers and the consumers. It is a traditional mode of selling goods and services. The supply chain of the offline retail environment is having difficulty in managing because it needs physical presence which is not necessary for online retailers. The online retailers can check the track record easily through accessing internet.

Comparison between online & offline retail environment

The comparison between online and offline retail environment is elaborated on the basis of ethical and regulatory, traditional and digital marketing practices and innovation practices.
Ethical and regulatory practices and issues
Online retail environment in context of copyright
Copyright is defined as the legal right which is provided by the law for its original work. The holder has exclusive rights to publish his or her work. The issues of copyright are related to copying the matter, symbol, slogan and other. The ethical issues are the set of rules and regulations of human moral behavior (Riquelme et al., 2014). It comprises of explicit code which means the written ethical behavior and implicit ethics means the unwritten but common set of moral responsibilities.
The general ethical and regulatory practices adopted by online retail environment are as follows:
•    Consumers and demographic trends
It is an ethical practice followed by a company to consider the trends followed according to the population and the consumers taste and preference.
•    Ethics in information system
The information and content should not be copied from any website.
•    Data protection
The data should be protected which is a regulatory practice.
Following are the ethical and regulatory practice issues faced by online retail environment:

Stealing of information: The content on the website is copied by another retailer or the information provided for differentiating the product is copied by another retailer, which is a major ethical issue for a company, and to manage the information from theft is another issue for the online retailer company.
Copyright trolls: The copy and paste of information can be done easily from the creator to a copier which is an ethical issue, and the website content can be easily copied which is a major issue because the hard work of creator can go in vain if it is available on another website which has to be maintained carefully.
Commercial photography: The commercial photography is done for a business purpose. The copying of photographs is also a major ethical issue which has to be managed for distinguishing the look of online retail stores.
Photography online: The exhibition, distribution of goods and other facilities provided by online retailers which can be accessed by the general public so the care must be taken while uploading images on the website. The wrong license assignment can also allow viewing commercial picture free of cost which is also an ethical issue for a company.

Offline retail environment in context of copyright

The general ethical and regulatory practices adopted by offline retail environment are as follows:

Environmental initiatives: It is concerned with the initiatives taken for protecting the environment
Corporate social responsibilities: It is the ethical practices which are followed by every organization to fulfill its social responsibility towards the environment.
Consumers protection: The consumer's rights should be protected which is a regulatory practice.

Following are the ethical and regulatory practices issues faced by offline retail environment:

Plagiarism issue: It is related to the copy of trademark, logos, and others.
Design copyright issue: It is related to the issue of copying the company’s designing.
Managing brand image: Managing and maintaining an image of a brand is an ethical issue.

Social and behavioral practices and issues

Online retail environment in context of old vs. new

The social and behavior practice of old and new generation is totally different. The old generation does not accept any new technology (Lu et al., 2013). For example, the old generation prefers offline retail environment, but the new generation is following the trend of online shopping.
Following are the social & behavior practices towards online retail environment:

o The online practices are done through the internet and the new generation is internet savvy, so they prefer to go for online shopping, but the old ones do not prefer to go for online shopping because they feel comfortable in personal contact with the brand.
o The behavior of new generation is accepting the trend of online shopping, and they get attracted to discounts and benefits, but the behavior of old ones is rigid they does not accept new practices.
o The perception of old ones is to feel comfort from its physical appearance whereas the perception of new ones is to adapt and follow new culture and practices.

Following are the social and behavioral practice issue:

To analyze the behavior practices of consumers is a social issue for the online retailers.
To manage the social practices according to the old and new ones is an issue for an online retailer.

Offline retail environment in context of old vs. new

Following are the general practices towards offline retail environment:

It is mostly preferred by old ones because their social behavior is to shop by contacting with the brand personally. They believe in physical presence, and the new generation is not preferring for the offline retail environment because it is time-consuming (Toufaily et al., 2013).
The offline retail environment is accepting by old ones because the also believes in the bargaining power of consumer which is not possible in the online retail environment.

Following are the social and behavioral practice issue:

Market segmentation: The managing of the market according to the consumer's class, age, and gender is the social issue for the offline retailers because the consumers will select the product according to their budget, choice, and behavior which is involved with social class of the consumers.
Consumer preference: The company has to manage their inventory according to the consumer preference which is segmented according to their age, class, and others. To meet the consumer preference according to the different generation is a challenging social issue for a company.
Innovation of technology: The innovation of technology is easing adopted by the new ones, but the old ones can be connected by relating their emotions with the technology which is a challenging issue for the company.

Innovation practice and issues

Following are the general innovation practices towards online retail environment:

Open innovators: The ideas for innovation include both internal and external ideas which help to innovate the product according to a consumer's needs.
Technical and non-technical innovations: The innovation practices for the product include technical as well as non-technical innovations.
Analysis of competitive mechanisms: The innovation required analysis of competitive mechanism which helps to analyze the product serve by competitors in a market.
Creating an innovation vision: The innovation practices required a vision for innovating a new product and services which act as a path for introducing an innovation.
Harmonizing business strategy: The product innovation practice requires harmonizing of business strategy so that the innovation will blend in business strategy.

Following are the innovation practices issue:

Consumers survey
The innovation must be done according to the consumer taste and preference which is a major issue for online retailers because the telephonic survey will be conduct for analyzing the consumer's taste and reference which is a practice innovation issue for a company.
Vision for life
The product innovation should be done in a manner that it will create a vision for online retail business which is an issue for a company.
Consumers feedback
The consumer’s feedback is required for a product innovation so that the consumer’s preference will be added into a product innovation which is a challenge for an online company.
Regulatory comfort zone
The online retailers have to concern about the regulatory because it is also operating outside the home country which is a practice innovation issue (Hristoy et al., 2015).

Following are the general innovation practices towards offline retail environment:

Quality Innovations: The quality of innovation is an innovation practice which is an offline retail practice.
Technology intervention: The new technology is implemented for the innovation of a product which is used by offline retailers.

Following are the innovation practices issue:

Top managers mindset: The mindset of top managers should be competing with the innovators so that the product innovation should be made according to the consumer’s preference which is an innovation issue for an offline company.
Third party experts: The third party suggestion is required for innovating a new product. The implementation of suggestion is an issue for an offline company.
Consumer concentric attitude: The innovation is based on consumer’s perception which is according to the moderate growth and low price. It is an issue for an offline company.
Management acceptance: The product design created by engineers must require the acceptance of management which is a practice innovation issue (De Medeiros, 2014).

Analysis of E-business values creation
In today’s digital world the growth of e-business is emerging rapidly which is creating value to the organization. The new ventures are providing opportunities for internet users by exploring internet services.

Porte’s value chain

The porter’s value chain is defined as the operating activities which are used by firms to deliver a product and services to the end-consumers. It is mainly used for taking the decisions regarding the activities used by a company to add a competitive advantage in producing goods and services. It is mainly used to analyze the route carried out by operational activities which help to determine the total cost and its effect on the profitability of a company (Hsu et al., 2013). Thus, the value chain studies the economic implication of activities. The analysis helps to analyze the value creation in the virtual market. Such as Flip kart decide to build warehouse which helps to increase the delivery speed which directly impacts on the sales by adding the value. Another example is of Amazon marketing strategy which helps to increase the sales by adding value. Following are the nine determinants of porter’s value chain:

1. Firm infrastructure:
The firm infrastructure includes the structure of the organization, accounting, planning, quality control, and finance. The quality control helps to check the quality of goods and services which creates value by increasing the sales volume. The planning is an essence of a company which needs to be done carefully.
2. Human resource management:
It includes the activities related to recruiting employees. The researchers do research and development, new product development and other activities which will created value to the organization and it will directly increase the sales volume.
3. Technology development:
The implementation of new technology will help in the innovation of product and services which will add the value. The innovation of technology attracts new consumers and helps to retain existing consumers which help to create value by impacted on the sales volume Tsai et al., 2013).
4. Procurement:
The procurement of raw material from cheapest source will increase the profit margin, and it creates value to the organization. The procurement of raw material is a first stage in which purchasing of raw material takes place, so procuring quality raw material at a cheap rate creates value to an organization.
5. Inbound logistics:
It includes the activities related to receiving, distributing, and storing of raw material. It helps in smoothing of the production process which helps to complete the production on time which will create value. The timed delivery will enhance the sales.
6. Operations:
It includes the activities of converting raw material into final product. The final production on time will create value to the organization. The smoothing of operational cycle creates cost cutting and delivery on time which creates value by impacting on the sales volume of an organization.
7. Outbound logistics:
The outbound logistics include the activities of distributing final product to the end consumers. It is the key element because it connects the consumers from a company. The outbound logistics plays an important role and by delivery on time creates value to the organization.
8. Marketing and sales:
The marketing activities have a substantial role on the profit margin of a company. It helps to transfer the products and services to the end consumers through marketing activities. The activities include promotional activities which directly increases the sales volume by creating value.
9. Service:
It includes the activities related to maintaining the product performance. It includes the activities such as installation, after sales services, training, repair, and others. The services help to retain consumers by satisfying their requirements. It will directly increase the sales volume.

Recommendations

Improvement of quality with reasonable price
The consumers can be retained by providing the best quality of products with a reasonable price which helps to retain the consumers and creates goodwill. The trust relation between the consumers and brands help to increase the consumer's use of online shopping. The perception of old ones will also change by establishing a trust and loyalty relationship between the consumers and brand. The mindset of consumers will be affected which comforts the consumers for using online environment. For example, flip kart is providing good quality at reasonable prices.
Innovation
The innovation helps to increase the consumer’s use of online shopping by implementing new technologies which attract the consumers. For example, Amazon has promoted the e-books selling through Kindle by analyzing the trend of E-books which helps to increase the consumer's use of online shopping. These products e-books and Kindle are appreciable type of innovations.
Discounts and easy returns
Discounts and offers are other types of innovation that attract consumers’ in large amount. The young generation is focusing on saving money with good quality of products. Discounts and offers get the attention of every individual which will automatically increase the consumer's use of online shopping. The easy return policy delights consumers and they feel comfort and satisfied which helps to increase the consumer's use through satisfying their psychological needs. It helps to create a trust relation which is very important for making a brand image in the eyes of consumers. For example, the discounts and easy return policy of flip kart increase their demand rapidly in the market. The concept of after sales service is also required to increase the consumer’s use of online shopping.

Conclusion

The retail chain of offline and online retail environment is totally distinguished from each other because the department in the online retail environment is connected through the internet whereas the departments of offline retail business are connected physically. The record keeping in online or any other department is
The comparison between an offline and online retail environment on the basis social and behavioral practice in the context of old versus young states that young generation is accepting online retail environment easily than old ones. The social and behavioral practices of old ones are accepting offline retail environment because they believe in personal communication and trust relationship between the consumer and environment. The issues include meeting consumer's expectations, innovation according to their preferences and connect their emotions with a product. The ethical and regulatory practice of copyright in the online retail environment includes the prohibition of copying the content and others, and their issues include managing the content and copyright practices. The offline ethical and regulatory practice of copying includes the copy of designing, logo, and others. The issues include managing brand image, plagiarism issue, and others. The innovation practices of the online retail environment in the context of product innovation include open innovation, creating vision by innovation and others. The issues include regulatory comfort zone, vision for life and others. The innovation practice of offline retail environment includes quality innovation and technical interventions. The issues include management acceptance, third party experts, and others. According to the analysis of e-business by applying Porters value chain reflects that the value is created through well-organized infrastructure which helps in improving the quality which adds value to the organization. The human resource management helps in recruiting the employees which help in designing and research of a product; it creates value, and it will directly increase the sales volume. The procurement creates value by obtaining raw material from the cheapest supplier which will directly increase the profit margin. The technologic development helps to innovate new products through research and development which helps to create value by impacting on the sales of a company. The marketing acts as a key role for promoting the sales and connect the consumers from distribution channel which will directly boost the sales. The outbound logistics add value by receiving, distributing and storing which helps to make final product timely, and the production cycle runs smoothly. The inbound logistics add value by timely delivery of goods and services to the end users which helps to create a brand image. The operation helps in converting raw material into finished goods. The fluency of operational cycle helps to create value by completing production process on time.

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References

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