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The future of retail

reinventing the department store business model

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The future of retail

reinventing the department store business model

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Samenvatting

This dissertation was created with the goal to examine how online shopping has changed retail, specifically department stores and their business model, and to recommend a course of action and business model for entrepreneurs considering starting an (online) department store.
There are several recommendations that can be made based on this dissertation and the survey results. The first recommendation is for an online department store business to start small: an empire isn’t built in a day. Amazon started from its founder’s basement and later became one of the biggest online department stores in the world. Starting an online department store will take time and dedication but if the company manages to be successful, the result is worth it.
The second recommendation is to use social media to interact with the customers and to provide online customer service. Responding to Tweets and Facebook message is one of the most valuable things a company can do, since communication takes place on a public platform and every visitor can see how a company handles negative reviews or complaints.
The third recommendation is to use Search Engine Optimization, meaning that a company can improve its ranking in the list of search results in a search engine like Google. Many consumers don’t click past the first page, and thus it is vital for a company to end up as high as possible in the list of search results.
The fourth recommendation is to shift from a product-oriented approach to a consumer-oriented approach, since consumers are more empowered than ever and the technique of pushing a product to a mass audience does not work anymore. To be successful, an online (department) store needs to sell something the customer really wants instead of mass producing products and hoping the target group will buy them.
The fifth recommendation is to create a clear, organized website and invest in cross-platform shopping. This means potentially investing in a web designer or IT team if these skills are lacking within the company. Clear, organized websites are more pleasing to the consumer and will generate more traffic. Since many consumers like to shop on the go, it might also be a good idea to invest in developing an app for smartphones or tablets, so (potential) customers can shop whenever, wherever.
The sixth recommendation is to offer free shipping and returns, since this is a feature many consumers look for when purchasing online. A young company may, due to its limited budget choose one of the two, whereas an established company should offer free shipping as well as free returns. The last recommendation is to prepare for the holidays. On holidays such as Christmas, many people (according to both the desk research as well as the survey) prefer to shop online in order to avoid crowded stores, and online department stores can make clever use of this increased traffic by offering discounts or launching an interactive social media campaign, like ASOS did with its gallery of Christmas jumpers sent in by fans of the brand.
To conclude, the internet is a very valuable marketing tool for department stores wishing to go online. There is no business model that is a definite best, it depends on situation and environment. For startups and young companies, the clicks-only model would be most profitable. For established companies, the bricks-and-clicks model is generally considered to be the best choice.

Toon meer
OrganisatieDe Haagse Hogeschool
AfdelingESC Europese Studies / European Studies
Jaar2014
TypeBachelor
TaalEngels

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