Retailer becomes e-tail in the digital world

The internet has boomed the retailer business. One of the most widely accepted reasons for adopting the Internet is that it opens a company's horizons to a global market, thus giving an opportunity for business growth. Using the Internet a company can increase its market share in its current market by offering added value services such as 24-hour technical support or home delivery and extend its markets geographically.

Competitors' online activities are a primary factor that influences Internet adoption by organizations. Small and Medium enterprises adopt the Internet in order to gain a competitive edge over other Small and Medium enterprises in the market, or to keep up with the competition. An interesting factor that must be taken into consideration is the market orientation of the company in question, since this influences that the company perceives as its competitor. If an SME is targeting the local market, in a situation where the locals have easy access to brick-and-mortar establishments, and not much of an incentive to shop online, then it will take a narrow view of competition and is unlikely to be threatened by the online activities of companies offering the same service overseas.

It shows that geographical proximity to shops, leading to less of an incentive to shop online - showed that the retail/wholesale sector had a very low take-up of Internet applications. Export-oriented SMEs, on the other hand, would perceive increased online activity by overseas companies as a threat, and would therefore feel under pressure to match, or even surpass the level of adoption of their international competitors. Competitive intensity is consequently a major factor influencing the level of Internet adoption by SMEs.

Those firms with greater global scope will face a higher degree of competitive intensity, leading to increased pressure to achieve higher levels of Internet adoption in order to create new ways to outperform rivals, thus changing the competitive scenario. Costs savings are major factors that influence the adoption of the Internet at every level of the Internet adoption continuum. Savings in different areas of doing business can be achieved through judicious use of the Internet. This is a particularly important factor for SMEs, which are extremely disadvantaged because of high costs relative to similar SMEs in larger and more developed economies.

The high telecommunications costs encountered by local SMEs are a factor that positively influences take-up of Internet technologies such as email and Instant Messenger. In addition, this factor also has an impact on adoption of Internet technologies designed to facilitate workflow and document exchange with partners, suppliers and customers overseas, in a cost-effective manner. The adoption of electronic marketplaces with links between customers and suppliers reduces the cost of negotiating and finalizing transactions. Adoption of the Internet can also lead to cost reduction in distribution overheads such as retail space and personnel.