Will online retail one day out grow the tradition of Personal Selling?
Online retail is progressively becoming more and more important in today’s society. The way we shop has been revolutionizing over the years. From bartering to the conventional way of selling items to online shopping, it has become a necessity of life. But after seeing the demise of bartering after the introduction of money and personal selling, will online retail one day overtake the important tradition of personal selling, especially there is a generation of people being brought up with computers ? With online sites such as EBay, Amazon and Deals Direct leading the way into our future are these the kind of sites which will lead the way into a change of our societies shopping behavior.
Personal selling is defined as ‘’Oral Communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to close the sale’’ ( Promotion – personal selling, http://tutor2u.net/business/marketing/promotion_personalselling.asp , viewed on the 23 September 2009). Personal selling is also used for the promotion of the product and store. Persuasive elements such as the usage of language are used to sell a product to a customer through a person to person interaction. Personal Selling also looks upon the buyer’s behavior to determine their needs and wants and this is where the seller tries to match up their needs and wants to a product that is in the store. Having these human interactions has shaped the way we shop, but with online retail on the surge of popularity we see that maybe personal selling is something we do not need in order to purchase products that we do want and need. Through the wants and needs, this could be enough to fuel a customer’s desire to go shopping for an item they want. There are also advertisements on websites for products that are substituting the promotional element.
EBay, Amazon and Deals Direct are all similar in their purpose of providing a retail service online for customers to buy a range of different products. The only difference between these companies are that EBay has the ability for anyone to sign up and sell/buy their products while Amazon and Deals Direct rely on companies to join up with their site and have the ability to sell their products online in association with these websites. EBay has undoubtedly become one of the most popular online retail sites to hit the internet whilst Amazons popularity especially with books has been on an increase. Deals Direct which is Australian owned has not excelled as much as the other two online shopping sites. This phenomenon that is EBay and Amazon were both created 1995. Jeffrey Preston Bezos founded Amazon and EBay was created by computer programmer Pierre Omidyar. Deals Direct began in 1999 under the name Auction Brokers Australia and was running underneath EBay’s banner for 5 years until October 2004 where they became the lone entity, Deals Direct.
EBay has ‘’approximately 84 million active users worldwide’’ (EBay-Media Center,2009 http://news.ebay.com/about.cfm viewed on 22 September 2009), Amazon ‘’ attracts approximately 50 million U.S. consumers to its website on a monthly basis (Wikipedia – Amazon, http://en.wikipedia.org/wiki/Amazon.com, viewed on 22 September 2009) whilst Deals Direct have ‘’over 1,000,000 happy customers across Australia’’ (About Deals Direct Australia, Safe and Easy Online Shopping, Best Prices & Best Deals, http://www.dealsdirect.com.au/about-us/, viewed on 22 September 2009) . For a form of payment EBay owns PayPal which generates a huge amount of money. It was report that in 2008 their total annual revenue was $2.4 billion dollars. PayPal’ enables any individual or business with an email address to securely, easily and quickly send and receive payments online. PayPal’s service builds on the existing financial infrastructure of bank accounts and credit cards and uses the world’s most advanced proprietary fraud prevention systems to create a safe payment solution’’ (The EBay Company, viewed on 22 September 2009,http://pages.ebay.com/aboutebay/thecompany/companyoverview.html) while Amazon, who do not accept PayPal or any other wire transfer, deal with major credit cards such as Amex, MasterCard and Visa etc. This is the same with Deals Direct, but they also have in place BPay, which ‘’ BPAY is a payments clearing organization owned by a group of retail banks. Individuals who hold accounts with a BPAY participating financial institution can pay billing organizations which participate in BPAY, using account transfers initiated by phone or internet. The transfers may be from savings, cheque or credit card accounts”. (RBA, Glossary, 2009,www.rba.gov.au/Glossary/text_only.asp, viewed on 22 September 2009). All these transactions have one thing in common, the non-usage of physical money, an item we would regularly use at retail stores.
Because of the rise in internet usage around the world and the ever popular credit card, these are factors that are contributing to the excelling of online retail sites. Also contributing would be price in products and substances that would affect the price ‘’ Variations in retail prices caused by local sales tax rates seems to have a large impact on consumer’s online buying patterns, suggesting that there is a cross-channel competition ‘’ (Austan Goolsbee, The Journal of Industrial Economics, Competition in the Computer Industry: Online versus retail, 2001, Vol 49, No. 4, http://www.jstor.org/pss/3569792). There has been an increase in sales over the past years especially focusing on America. United States in 2004 in their first quarter, sales reached $15.7 billion dollars. Sales are still showing a huge possibility of increase until 2010 in America alone, ‘Cambridge, Mass.-based Forrester Research recently estimated that online sales will more than double over the next six years, growing from $144 billion in 2004 to $316 billion in 2010.’ (Matt Hines, Cnet News, Online retail sale continue to surge, 20 August 2004, http://news.cnet.com/Online-retail-sales-continue-to-surge/2100-1038_3-5318048.html). Having these statistic, online retail is becoming increasing popular with no signs of slowing down at all.
With the ever increase in sales with online retail, as well as a generation that is being brought up with computers, online retail is due to become the number one way of shopping. It might just be a matter of years before online shopping over takes personal selling.
References
Promotion – personal selling, http://tutor2u.net/business/marketing/promotion_personalselling.asp , viewed on the 23 September 2009
EBay-Media Center, 2009, http://news.ebay.com/about.cfm viewed on 22 September 2009
Wikipedia, Amazon, http://en.wikipedia.org/wiki/Amazon.com, viewed on 22 September 2009
About Deals Direct Australia, Safe and Easy Online Shopping, Best Prices & Best Deals, http://www.dealsdirect.com.au/about-us/, viewed on 22 September 2009
The EBay Company, viewed on 22 September 2009,http://pages.ebay.com/aboutebay/thecompany/companyoverview.html
RBA, Glossary, 2009,www.rba.gov.au/Glossary/text_only.asp, viewed on 22 September 2009
Austan Goolsbee, The Journal of Industrial Economics, Competition in the Computer Industry: Online versus retail, 2001, Vol 49, No. 4, http://www.jstor.org/pss/3569792
Matt Hines, Cnet News, Online retail sale continue to surge, 20 August 2004, http://news.cnet.com/Online-retail-sales-continue-to-surge/2100-1038_3-5318048.html