A fashion clothing retail company venturing into online sales for the first time

Question

A fashion clothing retail company venturing into online sales for the first time hopes to increase sales revenues overall, but are also concerned that their online sales maybe at the expense of sales in their existing outlets. They are also considering the potential opportunites and risks of entering into relationships with affiliates who may direct potential customers to their website. Discuss the issues facing this company, suppoting your answer with appropriate real world examples.

Note: 4 - 5 pages long.

Explanation / Answer

There are three objectives of the retail company i.e.

1. Increase sales revenue

2. Online sales may be at the same expenses as in their outlets

3. (a)Potential opportunities and

    (b) Risk of entering into the relationship that direct potential customers to their website

Increase in sales Revenue:

Online Sales gives an opportunity to retail company to widen its market as it is able to reach more people irrespective of geographical boundaries .It is able to demonstrate its product. Online sales work for 24 hour and provide flexible time for the potential customers. With number of benefits from online sales the probability of sales certainly increases.

Online sales have less expenses as in their outlets

The expenses on online sales is much low as compare to retail outlet. This is due to the reason that retail outlet is having higher overhead cost like labour, insurance, Rent etc. But the risk with fashion retail is the testing of cloths cannot be done with online shopping and thus if this facility is provided, expenses can be increased. For such purpose, fashion clothing retail company can offer only those cloths which require less testing on online sales. The company can also widen its distribution network so company can reach to customers easily. As the sales volume increases, the expenses will come down.

The combination of offline and online work together give the best results in sales volume as well as customer’s satisfaction.

Potential opportunities with new relations

Potential opportunities will certainly increases according to the services provided to the customers by the company. If company offers chatting with the customers and offer video conferencing with the customer, the possibility of sales can be increased as the retailer can suggest verities of product accordingly by juduging the face expression , tone of the customer.

Risk faced by the company with new relations:

If proper services are not provided to the customers there are full chances that company can loss its customers. Through online, it is difficult to identify the choice or taste of customer. Most of the time body language also helps to identify the requirement of the customer. Retail company can offer products according to the requirement of the customer by judging him and able to identify his/her taste.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.