Abstract
E-Commerce can be defined as the process of deploying digital information processing technology and electronic communications to establish, rename, and renovate valuable relationships between individuals and organisations. This goal can be achieved through electronic messaging, advertising, sharing of information, and the interchange of electronic documentation. As a leading retailer in the UK, Tesco has implemented e-commerce in its operational strategy as a means of enhancing its overall operational efficiency and also to meet the needs and expectations of the contemporary consumer.
However, this implementation has been faced with challenges such as the management of delivery and packing costs, maintaining a desirable appeal and relevant assortment, product returns, the unpredictable nature of consumers, building and maintaining consumer loyalty, competition, channel conflict and finally privacy and security challenges. This study followed a mix of qualitative and quantitative approaches to determine the extent of these challenges. Two different sets of questionnaires amongst other forms of collecting secondary data were used.
The results of this study revealed that varying business law across borders within target operation zones, concern with regards to data security and privacy and difficulty in implementing e-commerce to the current system as the main problems behind the implementation of e-commerce by Tesco from which a critical discussion was conducted on these results and conclusions and recommendations drawn.
Methodology
This study took a mixture of qualitative and quantitative approaches. As a result, the study utilized several approaches to gather the relevant data that was required to give out the required information with regards to the research aim and corresponding questions at hand. To answer these questions, the case study approach was applied. Thus, observations were conducted on various aspects of e-commerce with regards to their application in the business model of Tesco.
To ensure that the data that was collected was effective and efficient, only constructs that were affected by the implementation of e-commerce were investigated in this study. These included aspects such as the management of picking and delivery costs, product returns, competition, consumer loyalty and so on. Thus, the impact of these variables of Tesco’s operations, sales and competitive advantage and consumer building, retention and satisfaction were monitored throughout the study period.
Specific personnel were interviewed during this research exercise to ensure that the information that was collected was correct, efficient, and reliable for this study. The sample size was designed in a manner that ensured that all the variables that were affected by the application of e-commerce within Tesco were captured. As Dees (2008) asserted, such inclusion is essential since it enhanced the validity and reliability of the data that will be collected.
In such an event, it will be easy to generalize the overall results to reflect the trends that are being experienced in the market. Thus, the case analysis approach was applied to determine the impact of applying e-commerce in the retail industry in the contemporary world hence meeting the aim of this research study. In addition to this, the observations provided a lot of information that was used to base arguments with regards to the third and fourth research questions.
Population and Sample
This study focused on various departments of Tesco as an entity. The target group of this study was the managers or personnel within the senior managerial positions in the company who could provide relevant data for the study with regards to impacts of the application of e-commerce within the firm’s operations and the possible challenges that they are facing within their respective departments.
Given the positions that they hold in their respective departments, these individuals stood a high chance of giving out information that represents the attitudes and perceptions of the employees who work under them in their respective departments. This focus thus ensured that the data that was collected for the study and the inferences that were made could easily be generalized to reflect the trends of the Chinese market with a strict emphasis on foreign direct investment.
Given the huge size of Tesco and the numerous departments, outlets, and employees that it has, the random sampling technique was used to collect the relevant data for this study. As asserted by Leonard-Barton (2010), this consideration ensured that the sample group was heterogeneous in the sense that it comprised of personnel from different departments and localities within the same entity. This was an essential move to ensure that the data is reliable and could be generalized to reflect the trends in the market. Consequently, this strategy ensured that the case analyses that were conducted were not biased.
Research Design
To fully focus on the research questions, a mix of qualitative and quantitative research methods were used. These methods ensured that all the aspects of the study were covered. This, in turn, increased the validity of the results. The data from the respondents that were collected from case analysis was achieved by the use of questionnaires. A case study analysis was also an essential tool in the research.
Data Collection Methods
As asserted earlier, the research design of this study took a mixture of qualitative and quantitative approaches. These approaches were essential since they ensured that all aspects of the study were considered and scrutinized rigorously. This was a critical consideration, as it enhanced the generalizability and validity of the results of this study.
Interviews
The quantitative data for this study was mainly collected using well-structured questionnaires. These questionnaires will be used to collect subjective data from the respondents of this study. Given the nature of this study, interviews through the use of questionnaires were considered to be the most effective method to collect the data that will be required to realise the study objectives. This method was considered superior as compared to other methods due to:
- This study only focused on only one corporation, Tesco. In this respect, obtaining in-depth data would increase the validity of the results instead of generalizing the results to a larger population from a small sample group.
- Several studies have been conducted on the challenges of applying e-commerce to business models. The outcomes of these studies can thus be used as sources of information with regards to literature review and areas that require further research on the current study hence setting up the base of developing the questions to be used in the interviews. However, more issues can be used as a basis for further research can be raised through the qualitative approach.
The main aim of this study was to determine the challenges that Tesco is facing in the application of e-commerce in its business model and strategies that it has put in place to overcome them. To realise this aim, primary data was mainly collected by focusing on the interviews that had been conducted on the senior management officials of the firms that formed the sample group of this study. Only one interview was conducted in every department of the company in the outlets that were within the study population.
Consequently, since the main aim of this study was to focus on a specific factor that affects the overall application of e-commerce within this entity, the questionnaire was designed in a manner that ensured all research questions are answered concerning advanced various e-commerce theories. Therefore, the questions were designed either to replicate or contrasts the results with regards to the theories that were presented.
Document Review (Case Study)
Document review is categorized as a qualitative research method. Document review was a source of secondary information for the document. Through document review, some of the methods that had been used in the previous studies were borrowed and applied to the current study. Also, the recommendations of the previous studies were considered in the current work. Information from document review was therefore used as a guiding tool in conducting this study. Additionally, the case study approach was also used extensively to provide general information with regards to the challenges that retailers are facing in the application of e-commerce in their business models. Document review has always been considered as an effective tool for collecting qualitative data.
This approach was thus used as the main source of secondary data for this study. Information was collected from journals, books, magazines, online articles and other credible sources with regards to the issue of e-commerce and challenges that firms face as a result of its implementation. Some of the methods that were identified by critically analysing previous studies were also incorporated in the current study to enhance its validity, reliability, and generalizability. Moreover, the recommendations of previous studies were also considered in this study to enhance the knowledge that is available in the field of e-commerce.
Observations
In this study, it was essential to conduct observations to validate the data that was collected from case analyses and document review. To achieve this, the observations were conducted with regards to the activities of specific departments with regards to how e-commerce was applied and the direct and indirect impacts it had to their operations. Of essence, this technique aimed at determining the policies and frameworks that Tesco had put in place to ensure that its operations are effective and efficient not only in maximizing their profitability but also meeting their needs of their consumers and standing at a competitive edge over rival firms.
Thus, the observations formed an essential part of the data collection method in this study. Observations were used to determine whether the specific departments and the general target group responded (Tesco customers) in a manner that is similar to the results that were collected from the case analyses. After this analysis was done, the resultant data was compared with the data that was collected from the case study and literature review. Observations were thus used to bring out a different perspective of the study to make the conclusions and arguments towards the research questions to be much stronger.
Data Analysis
The first step that was involved in the data analysis process was to summarize the questionnaire responses that were received from the respondents. Further analyses were conducted to determine the relationships that might be present between the questionnaire responses and the data gathered from secondary sources of information (document review). Statistical analyses were also conducted to determine the correlation that might be present between the application of e-commerce and the overall performance of the firm.
Analysis of variance tests (ANOVA) was also be conducted to determine whether or not the results of this study can be generalized to represent e-commerce implementation trends within the retail industry. Further analysis was conducted to reveal the similarities and differences that exist between the responses of various respondents from different departments and outlets. Through this cross-case analysis, the internal validity of the results was also enhanced because a given outcome was confirmed by data that originate from a variety of sources.
Additionally, this study utilized a two-phased process to critically analyse the already collected data. In the first phase, SPSS 16.0 was used to determine the various challenges that Tesco was facing in the implementation of e-commerce through the application of multiple response analysis techniques. As asserted by Leonard-Barton (2010), this approach entails the analysis of different variables in a given time to determine trends and relationships between them.
As such, the responses from various variables can be conducted at the same time developing a pattern that can be further used to further analyse these variables. The second phase entailed the application of hierarchical multiple regression. The study conducted by Leonard-Barton (2010) used this approach to test the impact of specific predictors independent of the influence that the might have on other predictors. In this study, this approach was used to allow the variance in outcome variables to be analysed at various hierarchical levels.
Ethical Consideration
While conducting this study, several ethical issues were considered. Most importantly, the study design considered the religion, culture, and practices of the sample population. Moreover, considerations were put in place to avoid bias on the grounds of gender and ethnicity. Most importantly, the consent of Tesco was sought before the commencement of the study. At the same time, the consent of respective respondents was sought before administering questionnaires to them and their anonymity and confidentiality of their information will be guaranteed (Westfall 2010).
Limitations and Accessibility Issues
Despite these considerations, the main limitation of this study was time. Usually, such studies need to be conducted for several months. However, the current study was conducted within one month. Moreover, due to limited financial resources, rigorous surveys and analyses will not be conducted hence affecting the overall validity of the research study.
Results
After the completion of the pilot study, it was found that Tesco has been facing several challenges in the implementation of e-commerce in its operations. Based on this fact, it was critical to develop a new questionnaire that would best be used to critically analyse these challenges and the impacts that it had on Tesco’s operations with regards to the implementation of its e-commerce strategies. In this respect, it was critical to conduct a validity and reliability test of this instrument before using it to conduct a survey.
This new instrument comprised of a total of ten obstacles that were listed. Respondents were requested to give their views on these issues based on their best knowledge, understanding, and point of view. However, to ensure that it was easy to code their responses, their responses were based on a five-point scale whereby five and one were considered as being very significant and non-significant factors respectively. Using this five-point scale, respondents were asked to rate how each one of these obstacles affected their implementation of e-commerce with regards to the respective departments that they were working for within the overall Tesco operating platform. At this juncture, it was critical to use SPSS 16.0 multiple response command to critically analyse all these variables. From this analysis, it was possible to identify and separate the most important variables from the least important ones. After this exercise, the next step entailed the application of the hierarchical multiple regression modelling. This method was applied to critically analyse the most important variables as well as testing their statistical significance for the impacts that they had on the application of e-commerce by Tesco.
After applying the multiple response analysis techniques in analysing the data at hand, it was found that the following factors were considered as the leading obstacles in the implementation of e-commerce by Tesco:
- Lack of proper measures to ensure data security and privacy over the online platform.
- Currency challenges especially with regards to cross border transactions and the volatile nature of exchange rates.
- Varying business laws across borders.
- Unpredictable consumer behaviour.
- Challenges with regards to effectively implementing e-commerce to the existing business model of the entity.
Table 1 (check on the list of tables) summarizes the responses received to the ten questions posed in the questionnaire. However, it is critical at this point to note that these five key challenges could have been highlighted by the respondents only by chance. As such, the data below did not have any statistical significance for this study. To realize their significance, it was therefore critical to further analyse the current data.
To critically analyse the statistical significance of the problems that have been highlighted from the primary study, it was essential for this study to conduct further tests. To achieve this goal, hierarchical multiple regression modelling was used. As discussed earlier, this model is essentially a variant of the basic regression model but gives the user the ability to select a predetermined order of entry of the variables as a means of controlling the resultant effects of covariates. At the same time, this model allows the testing of specific predictors independent of the effects of others.
In this study, the thirteen obstacles that were identified in the primary study were considered as the variables for the secondary study. From this point henceforth, these variables will be referred to as predictors. More specifically, the five variables that were identified as being the leading challenges in the implementation of e-commerce by Tesco in the primary study were tested using the hierarchical regression model to determine whether indeed they had a significant impact in the implementation of e-commerce practices by the institution.
However, it was critical at this point to note that there is a probability that other variables could as well have a significant impact on the same but were not identified as either being key or not identified at all in the primary study. Therefore, it is critical to ensure that these additional variables do not deter away from the resultant outcomes of the secondary study.
Thus, to overcome this, it was critical to include the other variables that were identified in the first study (other than the five selected) in the first model of the hierarchical regression model in the secondary study. This is critical, as it will ascertain that any shared credibility between these additional variables and the predictors in hand.
In this respect, it is essential to state that the hierarchical model that was used in the second study comprised of six different stages. Stage 1 of this model entailed the step where the initial group of predictors were added in this model. In stage 2, the predictor, Varying business law across borders within target operation zones are introduced to the model as the contributing factor that affects the implementation of e-commerce by Tesco. In stage 3, the challenges varying business law across borders within target operation zones and difficulty in understanding the unpredictable nature of consumers are considered as the contributing factors that affect the implementation of e-commerce by Tesco.
In stage 4, difficulty in implementing e-commerce to the current system, varying business law across borders within target operation zones and difficulty in understanding the unpredictable nature of consumers are considered as the contributing factors that affect the implementation of e-commerce by Tesco. In stage 5, concerns with regards to data security and privacy, difficulty in implementing e-commerce to the current system, varying business law across borders within target operation zones and difficulty in understanding the unpredictable nature of consumers are considered as the contributing factors that affect the implementation of e-commerce by Tesco.
In stage 6, concerns with regards to currency and exchange rate fluctuations, concerns with regards to data security and privacy, difficulty in implementing e-commerce to the current system, varying business law across borders within target operation zones and difficulty in understanding the unpredictable nature of consumers are considered as the contributing factors that affect the implementation of e-commerce by Tesco.
Table 3 (check on the list of tables) below shows a summary of the data of this model with regards to the percentage of variability that comes about as a result of the influence on the dependent variables by all the predictors. As asserted earlier, this model gives the user the ability to input predictors independently in his/her desirable sequence to determine their effects.
It is as a result of this fact that the application of this model in this study comprised of six different stages. The interpretation of the effects of these predictors on independent variables is determined by the value r-square. Additionally, the values that fall in the column R are the values arrived at after conducting multiple correlation coefficient tests between the predictors and the outcomes. The next column of R2 measures the variability that is present in the outcome as a result of the influence of predictors.
At this point, it is critical to note that any change in R2 is an indicator of the how the predictive power of the model is affected as a result of introducing an additional predictor to the model. In this model, the percentage of variability went up from 4.7% to 26%. This is a significant increase of approximately 21%. Due to this fact, this study conducted further analyses using the Durbin Watson statistics.
This approach is critical as it provides credible information with regards to the tenability of the assumptions of independent errors in the sense that the closer this value is, the better. In this model, the attained value is 2.431. This is relatively close to the R-squared value. As a result, one can easily conclude that there is a likely indication that the assumption has been met.
However, to ensure that valid statistical tests and results of the current data were arrived at, it was critical to analyze variance (ANOVA) tests. In this study, this was a critical step as it verified the results hence increasing the acceptability, reliability and validity of the results. Through ANOVA tests (shown on table 4), all the stages of this model predicted specific scores on the dependent variable to a given degree of significance, all of which were below 0.05. Usually, the F-value of any study is used to determine how accurate the regression model that was applied is (Leonard-Barton 2010; Grosse 2012; McNally 2012).
Therefore, in an event whereby the F-value is greater than one, the obvious interpretation is that the regression model has surpassed any inaccuracies or inconsistencies within the model and hand. In this respect, the SPSS software only calculates the probability of obtaining the F-value by chance. In this study, the F-value and p-value that were calculated in stage 1 under the multiple hierarchical model 4.081 and 0.070 respectively. From a critical point of view, it is evident that these results are not statistically significant. In stage 2, the F-value was 3.634.
However, the p-value of this stage was less than 0.05. In this respect, the results of this stage could not have happened by chance since the p-value is below 0.05 hence. Therefore, these results are statistically significant. Consequently, the F-values for stages 3,4,5, and 6 were 4.388, 4.230, 3.880, and 3.721 respectively. The p-values of all of these stages were also below 0.05 that interprets the results as being statistically significant. Based on these results, one can easily conclude that this model might be considered as being significant in predicting the outcome variable.
At this juncture, it is critical to focus on the parameters of the model. Of most importance is the last stage of the model since it incorporated all the predictors that had a significant impact on predicting the relationship that might be present between the predictors themselves and the overall challenges of implementing e-commerce in Tesco. For this part of the study, the notation “Beta (β)” and the standard alphabet “B” were used to refer to standardized and unstandardized coefficients respectively.
β was thus used to represent changes present in the standard deviations of the dependent variables as a result of a change in the standard deviation in independent variables present in the model. Furthermore, the B values are critical as it gives us the information with regards to the relationship that is present between the coefficient and specific predictors whereby positive and negative values are used to represent positive and negative relationships respectively. At this point, however, it is essential to state that every
β value has a specific standard error value that it is associated with. This is an important consideration as it gives an exact extent to which these values vary across the different samples. Based on this, any t-test conducted with on a B value is considered as being significant. Additionally, if this value is located in the column “Significant is less than 0.05” the only conclusion that can be arrived at is that the predictor has a significant effect on the model.
From the results that were arrived at as shown on table 5 (check on the list of tables), it was evident that varying business law across borders within target operation zones (t=2.487, p<0.05), concerns with regards to data security and privacy (t=1.749, p<0.05), and difficulty in implementing e-commerce to the current system (t=1.293, p<0.05) are the most statistically significant factors.
This is because their p values are greater than 0.05 and their t-values are positive. As a result, they are the most influential factors that act as the main challenges in the implementation of e-commerce by Tesco. On the other hand, high costs of developing effective means of overcoming the competition and lack of confidence in the benefits of e-commerce are considered as not being statistically significant due to the mere fact that their p-values are greater than 0.05. Furthermore, the fact that β is quantified in standard deviation units means that they can be compared directly.
In this respect, varying business law across borders within target operation zones, concerns with regards to data security, and difficulty in implementing e-commerce to the current system have positive β values. As a result, it was concluded that these predictors have a significant effect on the implementation of e-commerce by Tesco. On the other hand, high costs of developing effective means of overcoming the competition and lack of confidence in the benefits of e-commerce both have negative standardized β values. This, therefore, led to the conclusion that they are not statistically significant to the model and hence did not have a great influence in the implementation of e-commerce by Tesco.
Discussion
The UK and the world at large have always benefited from a vibrant retail industry (Bell 2006). As Dutrénit and Vera-Cruz (2014) asserted, the retail industry is critical to any economy since it plays an integral role in linking producers with consumers. In the UK, the retail industry comprises of several multinational corporations, high street anchors, and innovative and resilient small-scale retailers. Given this mix, it is evident that the level of competition within this industry is high (Thompson 2008; Benady 2012).
Additionally, given the fact that the needs, tastes, and preferences of the consumers within this industry are dynamic and change with time, retailers have always been in a continuous process of being innovative and creative as a means of standing at a competitive edge over their rivals (Sussman 2007; Fox 2011). Just like in many markets, retailers in the UK play a vital role in controlling the supply and demand for goods and services due to the mere fact that they like producers and consumers.
From a critical point of view, this industry can be considered as a bellwether for the wider economy as well as the confidence exhibited by consumers within the market. It is as a result of this fact that Pinder (2012) concluded that the retail industry is vital in any economy because it provides employment, goods and services, as well as providing an avenue for social cohesion.
At this point, it is critical to note that the operation of the retail industry relies on numerous factors. For instance, the level of competition greatly affects the policies and strategies that different firms put in place to ensure their operations are sustainable, effective, and efficient (Dees 2008; Gee 2013). Additionally, entities in this industry do not receive financial support from the government but are highly affected by the policies and regulations that have been put in place by the government through their respective administrative bodies. Finally, the nature of consumers, as well as their tastes and preferences, have been changing with time.
As a result, retailers have been forced to modify their business model to meet these new changes that have come up in their contemporary operating environment (Melvin 2007). As put by Mudambi (2015), retailers are now shifting from exclusively operating in physical locations to adopting and implementing e-commerce strategies to their operational models.
This has resulted in the re-engineering of their business models to integrate various sales channels hence providing their customers with a seamless and flexible shopping experience. However, the integration of e-commerce techniques has not been an easy task. In the course of incorporating e-commerce to their existing business models, retailers have faced several challenges. From the results of the current study, it is evident that these challenges are indeed present. However, the magnitude and extent to which they affect the implementation of e-commerce vary depending on their nature and applicability.
E-commerce and Cross Border Laws
The results from this study revealed that varying business law across borders within target operation zones is one of the leading challenges that Tesco is facing is the process of implementing e-commerce in its operations. As e-commerce is becoming more popular in the retail industry, more and more rules and regulations are developed to ensure that business is conducted respectably and ethically as a means of enhancing consumer confidence (Alwi 2009; Niranjanamurthy et al. 2013; Butler 2015).
In Europe, for instance, the main reason behind e-commerce laws is to ensure that one unified e-commerce market is developed to meet the needs of the European retail market. Despite its overall intentions of controlling the retail industry, some shortcomings come about with the implementation of these laws (Oddou 2011; Gillespie & Hennessey 2011). For instance, geo-blocking is one of the leading factors that affect the implementation of e-commerce by retailers in Europe. Through geo-blocking, consumers from certain nations cannot purchase goods or services from specific nations (Adeleye 2014).
A survey conducted by the European Union (EU) revealed that 38% of retailers who retail consumer goods geo-blocks their consumers due to contractual agreements that they have with states, producers, and other stakeholders (Nakiye 2015). This is a huge blow to the overall implementation of e-commerce in this industry. Additionally, Porter (2010) concluded that running the retail industry through e-commerce is a challenging exercise due to the different tax rules different nations have.
Taxation rules, for instance, varies from one nation to the other in Europe. Due to this fact, retailers have been facing the challenge of whether to charge taxes such as V.A.T based on the country of origin or the country of residence of the purchaser (Kathawala 2015). This brings about adverse problems especially with regards to pricing and purchasing procedures.
Data Privacy and Security
The concern with regards to data security and privacy was also identified as a major obstacle that Tesco is facing in implementing e-commerce. To serve customers at ease using the online platform, Tesco and other corporations that use e-commerce tend to request, collect, and store their personal information. Boritz and No (2011) asserted that the collection of information through this approach results in the generation of huge data sets that not only enhance the ease of operation within respective firms but also stand a high potential for being used for illegitimate purposes.
The malicious use of this data has always raised security and privacy concerns. For instance, in 2014, the system of Arkansas University was breached and the personal information of approximately 50,000 people was put at risk (Carpio 2015). In the online world, this is relatively a small number of individuals. The database of Tesco or a similar organization has hundreds of thousands of personal information of people from different localities and backgrounds. This includes personal as well as financial information. Therefore, a breach of this database would have tremendous effects both to the organization as well as the affected consumers (Lodato 2014).
To overcome these breaches, different approaches have been used. For instance, Amazon has been using the distributed computing approach whereby the firm uses different access points located in different geographic regions across the world (Cosper 2012; Caves 2011; Bilgin et al. 2015). Despite the success associated with this approach, Amazon has consistently been a victim of physical and cyber attacks (Moorhead 2013). Tesco has been facing similar challenges and as a result, it has been difficult for the firm to develop an effective and efficient system that will guarantee the privacy and security of its database (Rigby 2014).
Operational Strategy and E-Commerce
Difficulty in implementing e-commerce to the current system is another challenge that Tesco has been facing in its process of adopting the digital approach in its operations. Tesco viewed the process of adopting and implementing e-commerce as a critical move in transforming its operations to meet the demands of the electronic age (Creasey 2014; Brenner 2009; Rid 2011; McDonald 2015). To realize this goal, Tesco developed an online platform through which customers can access and purchase their products online (Ghandour 2015).
Despite the overall advantages that this approach has, several shortcomings have hindered the full realization of e-commerce implementation especially with regards to the effects it has on its existing system (Mendenhall 2007; Tookey 2014; Andress & Winterfeld 2012). Even though Tesco is the leading retailing company in the UK, the cost of developing, implementing, and maintaining an online platform is very high. According to the study conducted by McLean (2013), these high costs usually originate from intangible expenses such as improved consumer services and online advertisements as a means of gaining a competitive advantage over rival firms.
At the same time, there are security and privacy issues that have already been discussed in this paper. Based on the results of this study as well as other studies conducted on this field, it is evident that there is an issue of trust between consumers and specific organization with regards to the safety and privacy of the information that they provide online (Grounaris, Tzempelikos & Chatzipanagiotou 2007; Pucik 2007).
Furthermore, some studies have shown that there are firms that put in place weak security measures as a means of reducing their overall operating costs and in the process make the information that has been provided by consumers vulnerable to hackers. It is as a result of these facts that a considerable number of consumers lack the confidence of providing their personal information online (Berger 2006; Reynolds 2015). At the same time, there are reliability issues such as regular system maintenance and upgrades, protection against virus and attacks that have a tremendous effect on consumer confidence (Carmel & Tija 2006; Yeaple 2006).
At the same time, some firms do not guarantee the privacy and confidentiality of information that make customers reluctant in providing personal and confidential information such as a home address, banking information, date of birth and so on due to risk of being exposed or attacked (Mani 2010). At the same time, the online environment attracts people from different cultures and backgrounds. As a result, it is difficult for Tesco and other firms operating in the online portal to customize their online portals to meet the needs and preferences of their diverse customer base (Kogut & Singh 2008).
Furthermore, given the fact that the online portal lacks touch and feel functions, studies have shown that it is difficult for consumers to purchase higher-priced products through the online portal because they cannot authenticate the overall quality and status of the product they are purchasing (Rugman 2010; Yao 2006). Tesco, as well as other firms, have tried to come up with approaches such a detailed description of the goods that they offer but still, they have not been able to navigate around this challenge (Chaffey & Smith 2013).
Controlling intellectual property rights is usually challenging on the online platform. This is since the Internet was developed to share information freely without any barriers (Gibb 2006). It difficult for an organization to control the content that is published on its website and other online platforms. This is more so given the fact that different countries have different attitudes and perceptions towards intellectual property rights (Behrman 2012; Shi 2010).
Finally, given the fact that e-commerce has enabled Tesco and other firms that use this approach to conduct cross border transactions, it has always been difficult to integrate an effective sales tax collection system given the fact that different nations have different tax laws and the fact that there has always been contention with regards to which tax policy should be adopted for this purpose.
Other Predictors
However, some predictors were identified in this study that did not have a significant impact on the implementation of e-commerce by Tesco. High costs of developing effective means of overcoming competition, for instance, did not have a significant impact on the implementation of e-commerce practices in Tesco. From a critical point of view, it is evident that firms have modified their operations to implement e-commerce strategy as a means of meeting the needs and requirements of the contemporary market (Zhou 2006; Head 2006; Latta 2008).
However, it is not just Tesco or firms within the retail industry that are adopting this new approach but almost every other industry within the global economic community. In this respect, therefore, firms have to come up with effective and efficient strategies that will enable them to meet the needs and requirements of their consumers as a means of achieving a competitive edge over rival firms (Shin 2001). Firms are willing to go to any extent to achieve this goal.
Confidence in E-Commerce Benefits
As it has been stated repeatedly in this paper, firms all around the world are operating in a digital era. It is as a result of this fact that Tesco and other retailers in the UK and the world at large are adopting and implementing e-commerce strategies to meet the demands of the contemporary market (Arya & Srivastava 2015). Based on this fact, therefore, this study found the notion that lack of confidence in the benefits of e-commerce as being statistically insignificant. E-Commerce has unlimited benefits especially if it is applied and integrated effectively and efficiently.
The study by Kassim and Abdullah (2008) revealed that e-commerce has provided firms with opportunities such as gaining a competitive advantage over rival firms, the development of new distribution channels that increase sales, the overcoming of physical barriers, reducing of costs by both the consumer and the seller, and most importantly consumers have a wide range of options to choose from within the online platform. Concerning this, it is evident that Tesco, as well as other firms within the retail industry, greatly benefit from e-commerce practices within their operations (Fallgren & Sundborg 2013; Kazmi 2007).
E-Commerce and the Consumer
The results of this study did also focus on the impact of the consumer in the implementation of e-commerce by Tesco and other firms in the retail industry. Contrary to the findings of various studies conducted on the impact of the consumer on operational strategies, the results of this study did not recognize the consumer as a critical factor to consider in the course of developing and implementing e-commerce strategies (Timmers 2000).
Despite these results, it is evident that the entire focus of developing an online platform by any firm in the contemporary world is to enhance the overall shopping experience of their consumers (Kornum & Bjerre 2005). In this respect, therefore, the development and implementation of e-commerce strategies have been strategically geared to meet the needs and expectations of the contemporary consumer in a bid to building a desirable relationship hence enhancing the level of consumer loyalty (Hu, Kandampully & Juwaheer 2009; Huang & Chiu 2006).
The UK and the general global retail market is in a transitional state of cultural change and as a result, the application of e-commerce will have a tremendous impact in saving the time and money of these individuals (Park & Regan 2004; Cuadros 2014; Irmer 2015). At this day and age, consumers prefer reading product reviews and making purchases remotely as a means of saving time and avoiding any form of inconvenience that might result due to making a trip to an actual outlet (Asare 2011; Chaffey et al. 2012).
It is as a realization of this fact that Tesco and other entities in the retail industry have resulted in adopting and implementing e-commerce practices in their operational strategies in a bid to meet the needs and requirements of their contemporary customers (Dixit & Sinha 2016). Thus, to realize this goal, retailers need to ensure that their websites are easily accessible, consumers can easily navigate through them, products are described in a precise and detailed manner and whenever possible, the use of imagery is encouraged (Petersen & Kumar 2010; Clarke, Thompson & Birkin 2015).
As asserted by Grebe (2015), it is also important to provide consumers with reliable and flexible payment options with a reliable refund policy in an event of a dispute. It is as a result of all these facts that Levy (2014) concluded that e-commerce has played a significant role in empowering the consumer in the sense that their activities online play influences the responses of business entities with regards to the supply of information, products, and services that could not be achieved in traditional stores.
Therefore, to remain profitable and stand at a competitive edge, Tesco and other contemporary retailers need to understand the unpredictable nature of their target market and come up with goals and strategies that will result in the development of consumer loyalty as a means of ensuring their operations are sustainable in the long run (Goddal 2008; Boroto, Abudullah & Wan 2012).
E-Commerce and Supply Chain Logistics
With an online store in place, many questions with regards to stocking, warehousing, sorting, and delivery come to the mind of many. It is therefore critical for an organization to determine which products are best suited for online and offline purchases (Vanelslander, Deketele & Van Hove 2013). Tesco and other online other stores within the retail sector that have adopted the e-commerce approach use several criteria to determine which products they should stock for online and offline sales. First, it is critical to consider the shelf of products.
From experience, it is advisable to stock products that have a long shelf life for online sales and maintain selling products with a short shelf life on physical outlets as a means of minimizing losses due to waste (Doherty & Ellis-Chadwick 2010). At the same time, products that have a high price to weight ration are more suited for online stock as compared to the ones that have a low price to weight ration since the former have reduced delivery costs and the high price of the latter are convenient to be sold at physical stores where the customer can engage with clerks at the store, conduct a thorough inspection, and to some extent, get a discount on the purchase price (Seiders et al. 2005; Ndubisi, Malhotra & Chan 2009; Creasey 2014).
This consideration is critical as it reduces the frequency of product returns that might have detrimental impacts on sales and the revenue earned (Szafrańska-Blank et al. 2011). Urgency is also a critical factor to consider because there are some products that consumers purchase for immediate consumption hence it is much convenient to stock them at physical outlets as compared to online stores where they can take hours, days or even weeks to be delivered. Once these factors have been identified, it is advisable to deliver a large number of products to customers within one location reduces the cost per item or product picked and delivered (Bhatia 2008; Gil, Hudson & Quintana 2006).
The discussions presented in this paper has focused on the three main obstacles that prevent the effective implementation of e-commerce by Tesco. Given the fact that the results of this study were statistically significant, these results can be generalized to represent trends in e-commerce implementation within the retail industry. In addition to these three obstacles, this paper has also focused on the other factors that were identified as being obstacles during the pilot study and critically analysed the impact that they have on e-commerce implementation. Based on the discussions presented in this paper, the next section will focus on the conclusions that have been drawn from this study and recommendations on improving e-commerce implementation.
Conclusion
Based on the two surveys that were conducted in this study, the results pointed out varying business law across borders within target operation zones, concern with regards to data security and privacy and difficulty in implementing e-commerce to the current system as the main problems behind the implementation of e-commerce by Tesco.
As stated earlier, the value of R2 (2.431 as ascertained by the Durbin Watson statistic) was used to measure the variability of the outcomes by the predictors. By the Durbin Watson statistics, values that lie between 1 and 3 are considered as being acceptable. Therefore the R2 value of 2.431 is thus within the acceptable range leading to the conclusion that all the conditions had been met.
Recommendations
This study entirely focused on the statistical implications of the implementation of e-commerce at a macroeconomic level. However, from a critical standpoint, it is evident that this study is relatively horizontal in a topological level. With this in mind, one of the main recommendations would be to conduct studies of a similar nature in future but on a microeconomic level using a case-to-case basis.
To increase the precision of future studies, it is also recommended that critical analysis should be conducted to determine the relationship between the identified obstacles and e-commerce with special consideration to the size of the firm, the nature of the business involved, and the industry under which it operates. Similar studies should also be conducted on start-up firms, small and medium scale enterprises, as well as multinational corporations.
Based on the results of this study, it is critical for managers at Tesco to view the three main obstacles as their main responsibility in a bid to meet the operational demands of contemporary firms especially with regards to the successful implementation of e-commerce. To overcome the challenge of successfully implementing e-commerce within the current system of the organization, managers can handle and solve this obstacle at the organization level. However, given the technical nature of these obstacles, it is usually advised that external help from professional is sought (Boblitz 2006).
Additionally, the firm should enhance its cyber frontier by using sophisticated software and techniques that ensure the safe handling of private and confidential information within its database (Fickes 2006; Meier & Stormer 2008). It is also advised that big companies such as Tesco should avoid having multiple access points for their data and instead worth with a single access point for their big data (Balasubramanyan 2015). This is a critical consideration as it reduces the ease at which data provided by consumers can be breached.
At the same time, having a single access point makes it easy for an entity to put and manage security features and software hence further protecting their big data (Foster 2012). This, in turn, enhances the confidence that consumers have towards a company with regards to the security and privacy of the information that they have provided (Vaidyanathan & Mautone 2009; Araste 2013).
Additionally, using approaches such as encryption, strict terms and conditions on registration, intrusion detection, and access control can have a significant impact in reducing big data breach hence protecting the information provided by consumers (Borensztein 2008; Broadhaust 2012). This not only enhances the ease at which Tesco can implement e-commerce in its operations but also ensure that this new operational approach can easily be integrated into its traditional operational strategy.
Law is dynamic and as a result, able to meet with the changing trends as the society develops with time (Pulaj, Kume & Cipi 2015). This study identified varied e-commerce laws across borders as one of the key challenges that deter an effective implementation of e-commerce by Tesco. Currently, the European Union has come up with new policies that aim at enhancing free and fair trade across Europe. For instance, the EU has developed a new policy that aims at ensuring individuals across Europe benefit from a single digital market (Cantwell 2011; Caves 2011).
To realize its goal, this new policy mainly focuses on overcoming the challenges that come about as a result of geo-blocking in a bid to ensure that individuals across European Union can purchase goods and services irrespective of their physical location or nationality (Cavoukian & Tapscott 2006). Additionally, this new approach also aims at reducing cross border service delivery charges as well as enhancing return options hence improving the overall purchase process. These two considerations play a significant role in enhancing the Tesco’s logistics and supply chain operations.
Finally, this new policy also aims at strengthening consumer trust to e-commerce by increasing the involvement of national authority in protecting and maintaining the rights of consumers (Davidson 2015). This is a critical consideration as it plays a significant role in building consumer trust, enhancing consumer loyalty, and understanding the nature of consumers (Kathawala 2015; Jun 2016).
These are critical considerations that will enhance the overall operations at Tesco with regards to product management and service delivery. Tesco can further develop the trust of its consumers by developing an effective conflict resolution mechanism in its online purchases. This tool will be influential especially in resolving cases effectively and efficiently hence ensuring that both the rights of their consumers as well as the institution are respected.
Furthermore, for Tesco to enjoy the success of e-commerce, the firm needs to enhance its online credibility by offering services such as recalls on goods that were either damaged during transit or did not meet the expectation of the consumer (Erramilli 2010; Klein 2011). Toporowski and Lademann (2014) asserted that it is important for such a firm to ensure timely delivery of products as well as giving out proper information with regards to whether or not they can fulfil orders placed by customers.
Such considerations increase the trust that consumers have towards online purchasing hence increasing sales and profitability in the long run (Vanelslander, Deketele & Van Hove 2013; Hitt, Ireland & Hoskisson 2008; Hitt, Ireland & Hoskisson 2009). At the same time, Tesco needs to ensure that its online portal, where accessed on a PC or a mobile phone is easily accessible and navigable by consumers of all ages, cultures, and backgrounds (Fourne, Jansen & Mom 2014). This consideration greatly encourages consumers to shop using this platform as compared to visiting physical outlets (Hodgetts 2013; Jae-Nam 2008; Kaplan & Norton 2006).
Furthermore, the design of this portal should greatly consider the needs of their target market. This consideration is also critical with regards to product stocking and delivery options. To further enhance sales and ensure consumers get value for their money, Tesco should come up with strategies that boost the online basket size (Latta 2008).
Strategies such as partnering up with third parties to reduce delivery costs and logistics have a tremendous impact on enhancing the overall operational efficiency of the firm (Hays, Keskinocak & De López 2005; Grounaris, Tzempelikos & Chatzipanagiotou 2007). As a result, people will view Tesco as a reliable firm that stocks goods and offers services that meet the needs and expectations of their target market. Once this is achieved, Tesco will enjoy and benefit from the success that comes about as a result of implementing e-commerce strategies in its operations.
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