Use of E-Commerce in the online Retail Insdustry

Executive summary:

• This report is written in order to assess the current situation of the online supermarket and grocery industry.

• This report will also analyse the possible future developments of the industry.

• This report will also summarise the high barriers of entry that exist in the online supermarket industry.

• The report states the main competitors in the online grocery markets both in the UK and the US.

• Textbooks, journals and online resources will be used to compile the up to date information on the current market.

Terms of reference.

This report is for the attention of Dermot Kelly. It provides an overview of the current market situation and forecasts for the future of the online supermarket grocery industry.

1.0 Introduction

The purpose of the current report is to identify the current situation of the online grocery market. Market leaders and market competition will be identified. Business models and strategies from various companies in the market will be discussed, as well as future developments and future impediments to the market.

E-Commerce can be defined as “The electronic exchange of information that support and govern commercial activities including organisational management, commercial negotiations and contracts, legal and regulatory frameworks, financial settlement arrangements and taxation” (www.espc.co.uk) From the definition, it is implied that e-commerce is centered on the electronic exchange of information. This is accomplished via the existing telecommunication infrastructures, particularly the Internet.

This type of shopping is becoming increasingly popular and many more high street stores and supermarkets are now offering this facility. DTI and PricewaterhouseCoopers, (2002) stated that the Internet has facilitated the emergence of new strategies and business models in several industries. These models and strategies’ will be discussed in this report. Based on recent empirical evidence gathered in the UK, this report will illustrate current developments in the strategies and business models of online supermarket retailing. The main evidence has been collected through journals, textbooks and online resources. Some of the tendencies are comparable to what happened in retail banking with the introduction of Internet banking, but other tendencies are unique to the supermarket retailing industry. This is a rapidly evolving area of online business.

Findings 2.0

Groceries are different from many other products, such as music and books that are commonly purchased online. Many