ICT and e-Business Impact in the Retail Industry - empirica

e-Business in the Retail SectorA challenge was seen in the lack of awareness about ICT-related opportunities, notablyamong the majority of small retailers. Furthermore, improved access to marketinformation for customers due to the internet was found to involve risks for retailers. Thisunprecedented market transparency increased competition levels, even in markets whereconcentration was already high, leading to eroding profit margins.With regard to drivers and barriers, the study found that "current dynamics indemography, changes in modern lifestyles, consumer choice, and improved legislation"were major drivers for e-business adoption. Barriers included a lack of ICT skills and"widespread concern among both consumers and retailers" with regard to security issuesin online retailing.Policy implications: better information for SMEs & standardisationThe e-Business W@tch study of 2004 concluded that the key challenge for policy was"… how to support the many micro and small enterprises from the sector in a competitiveenvironment that is increasingly becoming international and dominated by large players."It was proposed that policy could consider two types of action in this context: first,initiatives aimed at optimising hardware investments and infrastructures in general, forexample the promotion and coordination of technology buying groups, and consultancysupport dedicated to the implementation of e-business; second, initiatives to educatesmall retailers about opportunities of using basic internet applications.Besides specific support for SMEs, standardisation issues were considered as highlyrelevant, in particular in the context of supply chain management. The study proposedthat standardisation of computer languages should be promoted.3.2 ICT infrastructure, networks, expenditure and skillsThis section looks at the ICT infrastructure of retail companies including access to ICTnetworks. Other focal points in the section are ICT expenditure and skills. The objectivesare to assess:the sector's overall "e-readiness", i.e. to what extent the basic ICT infrastructure fordoing business electronically is in placethe adoption dynamics since the last point of measurement in 2003trends in ICT budgeting.Internet access – the deployment of broadbandAs in most industries, doing business in the retail sector without having internet accessis practically no longer possible. The only exception is small family-led shops, some ofwhom are still operated without even using a computer. 26 Of those retail companies thatuse computers, the vast majority (95%) is connected to the internet (see Exhibit 3.2-1),even among the smallest of firms.26In the survey of 2003, only about 80% of micro retailers said they used computers, while 100%of those retail companies with at least 10 employees used computers. The 20% withoutcomputers are typically small family businesses ("mama-and-papa-shops") which operate in avery traditional, "no-tech" environment. In the survey of 2007, these businesses were no longerincluded; the population only covered retailers with computers.33