Sneaker Freak is an exclusive clothing and trainer retailer established in 2014 to provide unique and exclusive shopping experiences and services to customers in Manchester, London, and Amsterdam. Exclusive or luxury retailing is a long-standing business practice in the retail industry that is all about retailing the very best products with service to match. The target consumers are highly discerning in their purchasing choices. The value they seek in a product is more than just a logo, but an experience that is exclusive (Chevalier & Gutsatz, 2012). Therefore, luxury retailing is more about providing products and services of unique value to the target customers. Meanwhile, sneakers present the evolution of fitness footwear to products uniquely designed to provide protection for a variety of fitness activities. This class of footwear is suitable for a variety of fitness classes, weightlifting, health exercises, and some racquet sports. This class of footwear’s target consumers are affluent members of society who desire to keep fit by engaging in physical activities such as aerobics (Choi & Shen, 2017). The unique identifying characteristics of the target consumers inform the positioning of Sneaker Freak’s outlets in urban areas in London, Manchester, and Amsterdam. The retailer is planning an expansion to the United States by establishing operations in New York. Expanding to a foreign market will enable the business to spread risks as well as increase its market share and profitability.
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E-Commerce and E-Commerce Operations
E-commerce or electronic commerce is a business model that utilizes digital technologies to enable customers to order and pay for items via a website or e-commerce platform and have it delivered to their doorstep. E-commerce is the future of retailing businesses as it presents numerous benefits over the conventional brick-and-mortar business model (Brilliant & Achyar, 2013). Besides saving on operational costs related to utilities, an e-commerce platform enables a business to understand the customers’ shopping habits to serve their needs better. It is a drastic shift from the generic approach of retailing to a personalized approach that focuses on serving each customer’s unique needs based on their profile. Essentially, customers are allowed to create profiles on the e-commerce platform that facilitates the provision of a personalized shopping experience.
Buy-side and sell-side are two important concepts in e-commerce business operations. The former refers to the transactions between the purchasing organization and its suppliers while the latter refers to transactions that occur between the supplier organization and the customer (Izadi & Zadeh, 2015). In the context of e-commerce retailing, the Buy-side is a composite of all the transactions and relationships between Sneaker Freak and key suppliers of exclusive clothing and trainers. Optimizing the buy-side is essential to ensuring a consistent and responsive supply of high-quality branded products. This involves establishing mutually beneficial relationships with suppliers to ensure a consistent supply of sufficient inventory to match the market and consumer demand (EŞİTTİ, 2018). The company will establish goodwill with the suppliers through courteous, honest, and transparent relationships. Treating the suppliers fairly will be essential to establishing trust that the business can leverage to ensure a consistent flow of inventory, even when there is a shortage of some items.
Meanwhile, the Sell-side refers to the relationship and transactions between Sneaker Freak and its customers. According to EŞİTTİ (2018), the essence of a business’s existence is to serve the target consumer’s implicit needs. Therefore, it is essential to understand and efficiently fulfill the needs of the target consumers. This can be achieved through effective customer relationship management to build brand loyalty that will lead to repeat purchases as well as encourage positive word of mouth. Consumers who patronage retail e-commerce platforms for exclusive clothing and trainers expect a certain service level and efficiency (Chevalier & Gutsatz, 2012). Customers expect a user-friendly interface that is easy to place orders and make payments as well as track the delivery of the item. Customers also expect the organization to protect their personal and banking information from unauthorized access by third parties. Therefore, ensuring data integrity and security, coupled with efficient delivery of the other items, improves consumer loyalty towards a particular e-commerce platform.
Sneaker Freak’s expansion to New York, United States, presents both benefits and challenges. One of the key benefits is spreading business risks by establishing operations in different target markets. The UK market and the American market are influenced by different political and socio-economic forces that result in different outcomes for the business. Therefore, expanding to the American market will help to spread Sneaker Freak’s business risk by enabling the organization to move capital and assets between the two markets (Izadi & Zadeh, 2015). The organization will also increase its market share by tapping into the vibrant New York economy. Besides increasing its market share, expanding to New York will also boost sales. However, this will require the organization to establish logistics to enhance their buying experience. A study conducted by Brilliant and Achyar (2013) revealed that over 80% of online shoppers rate an e-commerce platform based on how fast and affordable it is to ship or deliver the item. Therefore, it will be essential to establish fulfillment centers in urban areas across New York to facilitate the delivery of items purchased online. Fulfillment centers are designated locations where customers can conveniently collect the items they purchase online or have it delivered to their doorstep.
The company will also need to design a smart, friendly e-commerce platform because over 62% of young and affluent smartphone users shop online. While the majority of mature adults use personal computers and laptops to shop online, young adults and millennials prefer smartphones (Akar & Topçu, 2012). Therefore, the business needs to become mobile-friendly by introducing mobile shopping applications to facilitate e-commerce expansion to New York. It is besides incorporating different payment applications to increase the reach of the e-commerce platform.
Reasons to Expand Globally
Online shopping or e-commerce eliminates limitations inherent to the conventional brick-and-mortar business model to allow small businesses to operate in the global economy. It has eliminated capital and location limitations that made it difficult for small businesses to establish operations internationally (Choi & Shen, 2017). All that is necessary for an e-commerce business to operate internationally is improving logistics in all markets it has operations. That is, ensure fast and efficient delivery of items purchased by customers in different markets across the world. Also, technological advancements enable small businesses to reach and engage consumers in different markets across the globe. For instance, social media has simplified marketing for small businesses by enabling active participation and engagement of target consumers in different target markets (Chevalier & Gutsatz, 2012). Social media has improved the efficiency of communicating with customers in different target markets, but it has also lowered marketing cost. Also, advancements in transportation technologies enable small businesses to fulfill the target customers’ needs in different locations across the globe. Drone technology is rapidly replacing delivery vans and motorbikes to enable small businesses to compete with large retailers such as Amazon by lowering logistics costs. Lastly, small businesses should operate internationally as the domestic markets are increasingly getting saturated. Competition in the domestic market particularly in the UK is aggressive as new entrants compete for the same customers as incumbents. Therefore, expanding to international markets will enable small businesses to increase market share as well as boost sales.
Growth Expansion Plan
The first step of expanding the Sneaker Freak business to New York will entail conducting comprehensive market research to understand the target consumers’ implicit needs. Customers in the UK and America have different tastes and preferences regarding exclusive clothing and trainers, particularly brands. Understanding the implicit tastes and preferences of the target consumers in New York will inform inventory management. Essentially, the type of brands to stock and variety in terms of sizes, color, and quantity (Akar & Topçu, 2012). The market research will also highlight the legal and regulatory requirements for e-commerce businesses to operate in New York. Compliance with regulatory and legal requirements will be a prerequisite to selecting a location for a central warehouse and the business headquarters. A centralized warehouse serves a typical e-commerce business with secondary fulfillment centers in convenient locations to improve delivery efficiency (EŞİTTİ, 2018). Therefore, expanding to New York will require identifying a suitable location for the central warehouse. Since the target consumers are affluent New Yorkers, the fulfillment centers will be located in urban areas across New York.
After identifying suitable locations for the business headquarter, the warehouse, and fulfillment centers, the next step is to create awareness about the brand generate interest among the target consumers. Since the target consumers include both young adults and mature adults as well as millennials, a hybrid marketing strategy integrating both digital and traditional marketing tools will be utilized (Brilliant & Achyar, 2013). Conventional marketing tools such as print and broadcast media will be used to target mature adults as they rely on these channels of communications to get product information. On the other hand, digital communication tools such as social media will target young adults and millennials due to their increasing dependence on digital communication tools (Chevalier & Gutsatz, 2012). Advertisements will be sponsored on social media platforms such as Instagram and Facebook to engage the target consumers actively. Besides creating awareness using both digital and traditional communication tools, it will be essential to contact promotional campaigns to expose potential customers to a unique shopping experience. This will include social media contests and giveaways as well as giving branded gifts.
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Brilliant, M. A., & Achyar, A. (2013). The Impact of Satisfaction and Trust on Loyalty of E-commerce Customers. Asean Marketing Journal, 5(1), 51-58.
Chevalier, M., & Gutsatz, M. (2012). Luxury Retail Management: How the World’s Top Brands Provide Quality Product and Service Support. Hoboken: John Wiley & Sons.
Choi, T.-M., & Shen, B. (2017). Luxury Fashion Retail Management. Singapore: Springer Singapore.
EŞİTTİ, B. (2018). The Factors influencing the Adoption of E-Commerce in the UK. International Journal of Academic Value Studies, 4(18), 1-9.
Izadi, M., & Zadeh, E. A. (2015). Prioritization of Factors affecting Online Customers’ Loyalty in E-commerce Using Topsis and Numerical Taxonomy Methods. International Journal of Academic Research in Business and Social Sciences, 5(7), 213-225.