The Impact of Online Grocery Shopping On the UK Retail Industry in the Crisis Situation. A Case of Covid-19
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The emergence and rapid development of the internet for the last two decades with the innovative digital economy have driven the information technology industry (Clements, 2020). The development has increased the feasibility of long-term advancements that impact internet users. Similarly, online shopping has exceptionally modified people's purchasing behaviour (Baker et al., 2020). The different kinds of offers, ease of access, cashless shopping and details of every product have revolutionized the concept of online shopping. Considering the impact of online shopping, the retail industry is the biggest target that benefits from it, especially grocery shopping (Feng, 2020). Although grocery shopping is new, it has become an effective facility for consumers. This research will investigate the impact of online shopping on the UK retail industry during the current uncertain conditions of COVID-19. It is a world-over pandemic which has caused distress and uncertainty in every field. The public encounters many issues in a daily routine that acquires more time and difficulties in management or access (Friedrich, 2020). The need for groceries is a major demand of the general public, which is not accessible due to the lockdown situation (Rummo, 2020). In this regard, this research will examine how the people of the UK manage their grocery shopping through online services and what effect it has on the retail industry. The research will thoroughly study grocery shopping management, online services and the retail market with the help of a relevant literature review. It will also explain the suggestive methodology for conducting this research.
Research Aims & Objectives
The study aims to investigate the financial impact of online grocery shopping on the finances of the retail industry of the UK during the current COVID-19 situation. The main objectives for the core analysis of the research are as follows:
- To understand the online shopping behaviour of people due to COVID-19 conditions.
- To analyze how the retail industry is behaving in terms of finances during the epidemic of COVID 19.
- To examine the financial impact of online shopping on UK retail indsutry during the current COVID-19 situation.
- To recommend solutions for increasing the purchase intention of the public for grocery shopping through online service using improved promotional techniques.
Research Questions
What is the impact of online grocery shopping on the financial condition of the retail industry of the UK?
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Download PDF FileResearch rationale
COVID-19, which is the new pandemic disease that affects the lungs of patients, have caused 177,496 deaths around the globe (Our World in Data, 2020). Consequently, this disease has affected people and businesses across the globe. This disease has affected consumers from various age groups differently (EY,2020). According to figure 1, purchasers between the ages of 18-44 are generally worried about the effect of the pandemic. Be that as it may, just 40% of them shop less frequently or do not focus on brands.
Moreover, keeping in mind that the items purchased by 42% have changed essentially, 46% of the consumer behaviour determines that brands have become critical to them after the spread of COVID-19. Customers who are fundamentally more than 45 have seen the most effect on their work. Nearly a quarter has suspended their employment, incidentally or for all time—Seventy-eight percent shop less now and again, and 64% purchase the basics. As opposed to the Hibernate and spend portion, 33% of customers here feel brands are currently far less essential to them.
Figure 1 COVID-19 effect on consumer behaviour Source: (EY, 2020)
The importance of conducting this research is due to the great impact of online grocery shopping on consumers and businesses throughout the UK during the COVID-19 pandemic. The country's situation is unprecedented due to no previous research conducted in this area, which is why this research is vital to investigate the impact of online shopping on UK retail industry, especially how its customers are being affected. A huge number of customers have resorted to using this method of shopping due to multiple reasons during the pandemic, which makes it vital to evaluate the implications associated with online shopping for businesses and consumers. Lockdowns and curfews are implemented throughout the UK, making it difficult for customers to go to the stores to purchase basic groceries physically. Moreover, the world health organization has advised adopting social distancing to prevent the disease's rapid spread (WHO, 2020). This has greatly reduced the inflow of customers in stores, due to which businesses suffer throughout the country. The online delivery system allows grocery stores to continue operations and remain in business during this pandemic. However, during this unprecedented situation in the country, businesses require proper assistance to conduct online operations efficiently. There existed insufficient guidelines for grocery stores to consult with to follow adequate measures that would allow maximum benefit to the organization and aid in providing proper safety measures that are necessary to ensure the delivery personnel remain safe during their delivery operations. It is vital to conduct research in this area because of the increasing number of cases globally, because of which there is a lack of knowledge about when normal functions of grocery stores will commence increasing the need for smooth functioning of online delivery systems for grocery stores in the UK.
Research significance
The most important role the research will play is providing researchers with adequate knowledge and literature in the area of online delivery for grocery stores in a global pandemic that has halted the normal operation of businesses in the country. The COVID-19 pandemic has brought unprecedented issues to rise and has caused a significant change in how businesses need to be conducted. This research addresses one of the significant issues and offers an adequate guideline for small and larger organizations. Through this study, the organizations will be able to develop and implement necessary measures for the safety of the customers and the employees of the organization, which is essential to reduce the number of cases in the country. The guidelines will ensure that the organizations function smoothly because consumers at home, especially older citizens who cannot access stores to buy groceries, are provided with the services at home safely and efficiently. Through this research, an organization can also be equipped with the requisite knowledge for future issues requiring similar measures and be better prepared to conduct its operations efficiently and effectively. While understanding the impact of online shopping on UK retail industry during pandemic crisis, this study can further act as a foundation for the future study for enhancement of crisis management in this retail industry.
Literature Review
Online Shopping Trend
According to Mortimer et al. (2016), online shopping caters to people who utilize the internet for different services and facilities. The definition of online shopping is based on consumer preference, which refers to the process of selecting goods and services and making an order through online service for the provision. Andrew (2016) identified that several factors influence trust while customers shop online as they rely on an online source to spend money. Additionally, Anesbury (2016) claims that support and security in the context of online shopping appear to be a big relief for many people who tend to avoid especially going shopping or grocery stores. The factor of the convenience of staying home is a major role player in boosting the business of online shopping services (Munson, 2017).
Henriksson (2020) agreed that the innovation of e-commerce greatly impacted the marketplace and consumer behaviour in response to online shopping services. The internet and social media usage have progressed the purchasing power of the public, who either get influenced by offers or celebrity endorsements in making a shopping expense.
To further elucidate the impact of online shopping on UK retail industry it is essential to comprehend the sources of digital platfrom, which is digitalization. According to Pantano et al. (2016), the grocery market has also been impacted by the adoption of digitalization in the UK. Online business advances and techniques have radically affected how organizations work (Mason, 2019). Various British organizations have received the online exchange, and as per the DTI in 2015, 25% of UK organizations have just exchanged to online methods. The ONS (2020) led an internet business study with 12,000 organizations that tend to contribute major to the economy. The aftereffects demonstrated that online deals to families had expanded by 53% from ₤4bn to ₤6.1bn contrasted with 2015. As indicated by BBC News (2020), internet shopping is resisting the descending pattern on the UK High Street, as most recent figures show the "e-tail" division made a 13% yearly deals increment in February. The online sales deal now with 3.4% of all retail exchange with the UK's online retailers created deals of £167m every week in February 2009, as indicated by the UK ONS (2020). These statitics clearly highloght the financial impact of online shopping on UK retail industry druing COVID pandemic.
According to Thomassen et al. (2017), the UK's model for online grocery shopping varies according to the company's business structure. In the buy online and pick in-store model, clients can arrange a basic food item application and drive to the chosen store to get the request at the most convenient time (Gao and Su, 2017). The retailers go into the store and pick the selected items ordered online. This model is regularly trailed by basic food item retail organizations having their supermarkets. One of its models is the UK based on basic food item retailers, Tesco and Lidl. Warehouse-Pick Model is trailed by organizations with no physical markets, such as Ocado (Mkansi and Nsakanda, 2019). Here, organizations such as Ocado need to purchase legitimately from suppliers and afterwards stock it in their distribution centre, which makes the procedure generally costly. However, according to Slack (2018), it is efficient for businesses due to the unavailability of a physical store. The grocery retailers like Morrison’s, which have physical stores and warehouses, have been using the hybrid model, which is the blend of both the store-pick model and the warehouse-pick model. It gets the services of Ocado for warehouse picking and delivering (Hübner et al., 2019).
Impact of online shopping on the UK Retail Industry
According to Gerhold (2020), the world wide web has changed human interactions and behaviour to a large extent. The researcher pointed out one of the major examples of online shopping behaviour, which has developed new trends in this direction. Stella (2020) identifies that the retail industry is using this changed behaviour by offering online grocery shopping services that help the public purchase all their needful items with just some clicks.
Following the current COVID-19 situation, UK and many other countries around the globe are suffering from discomfort and worries about everything, especially life support items. Doherty et al. (2020) state that global tourism and retail have been hit hard, particularly during the coronavirus pandemic. He added that many retailers in the UK have temporarily closed their locations but are considering other measures to sustain their business. These aspects surely highlight that pandemic have casted negative impact of online shopping on UK retail industry. Online grocery shopping is major support for the retail industry as the demand has immensely increased, and many retailers have a stock shortage (Baker et al., 2020).
Since the emergency of Covid-19 is a new occasion, there is no specific scholarly research about its likely impacts on web-based business, uncommonly online retail (Meyer, 2020.). Only a few news sites or statistical surveying sites have performed inquiries relevant to this subject. In these pandemic downturns, customer interest in pleasant-to-have items decreases as purchasers focus on their increasingly fundamental needs. Wellbeing, health and food items that fit into the lower portions of Maslow's Hierarchy of Needs become the top need; however, consumers focus on renowned brands (Psychreg, 2020).
Since the worldwide money-related emergency is an ongoing occasion, no specific scholarly research about its plausible consequences for internet business, uniquely B2C web-based business or online retail. There are only a couple of news sites or statistical surveying sites which have performed inquiries about identified with this theme. For instance, NYTIMES.com and Forrester Research Inc. are two primary sites which had some data about the effect of money-related emergencies on web-based business. As per [3], it was anticipated that the money-related emergency would not have any noticeable effect on the innovation division.
In financial downturns, purchaser interest in "pleasant to-have" items goes down as purchasers centre around their increasingly essential needs. Wellbeing, health and security — items that fit into the lower portions of Maslow's Hierarchy of Needs — become the top need. For adventure-supported and bootstrapped new businesses either pre-dispatch or in their underlying stages, the coronavirus circumstance may require a move in technique. Strands Hair Care, a direct-to-shopper custom cleanser and conditioner brand sponsored by information, is one case of a startup adjusting to changing customer inclinations.
Rummo (2020) expressed his concern that retail commerce, supply, and shipping challenges amid COVID-19 have strongly affected the general public's purchase behaviour. The researcher identified that people stock up on grocery items in bulk because of the fear of the pandemic while easing online services for grocery shopping. Although it has surfaced as an economic threat, the pandemic has caused changed the behaviour of people when they consider doing grocery shopping (Bragg, 2020).
Since shopping for groceries includes buying choices that are notably not quite the same as those in other item classifications, Friedrich (2020) gives an example that shopping for clothing, grocery or technical items is a critical measurement for retailers to figure out how their clients shop online. Fernandes (2020) also claims that for food supplies in the pandemic situation, the retail industry needs to take advantage of the present market's latent capacity and progress in the exceptionally high demand through online shopping.It turns out to be vital for retailers and supervisors to more readily comprehend what influences their shoppers to look for food supplies online in any case and how online customers approach settling on purchasing choices in an advanced situation (Aschemann-Witzel et al., 2020).
Anesbury (2016) examines in his research article that housebound shoppers in China exceedingly opt for online grocery shopping for everyday supplies. As indicated by French retailer Carrefour, vegetable conveyances expanded by 600% year over year during the Lunar New Year. Berg (2020) also shares that Chinese online retailer JD.com expressed that its online basic food item purchasing developed 215% year over year to 15,000 tons during a 10-day time between late January and early February. These analyses contribute to the influence caused by COVID on the general public regarding online grocery shopping.
Methodology
Research paradigm
While conducting research, it is important to use the correct research philosophy. The researchers resort to different research philosophies by seeking help from qualitative and quantitative research approaches. Based on this aspect, Crossan (2013) denotes three main philosophies, including positivism, interpretative approach and pragmatic approach. Positivism is a quantitative mode consisting of generic experimental analysis observations. A positivist strategy is established based on data collection and hypothesis development. Taylor et al. (2015) comprehended that an interpretative approach is rooted in assessing the differences between individuals and social actors. There is sometimes an over-distinction between the different types of research methodology, and modern research sometimes merges these methods to obtain accurate results (Edson et al., 2016). An example of this method is the pragmatic approach which uses elements of both quantitative and qualitative approaches to carry out the research. This research will be focused on using a quantitative methodology in general. The philosophy the researchers will apply is positivism.
Methodological approach
The methodological approach is the plan and procedure that contains the detailed steps used in data collection, analysis, and deducing interpretations of the collected data. For this purpose, researchers use two basic types of research approaches. Bryman and Bell (2015) argue that the deductive approach orients from the generalized to specific outputs, where it adapts the top-down approach. They emphasize that deductive research relates to quantitative methods. This bottom-up approach reflects upon factual details, which may also entail some uncertainties. Whereas the inductive approach adheres to the more qualitative way, relying more on the subjective assessment like opinions, beliefs and behaviour of the people. The general inductive approach provides an easily used and systematic set of procedures for analyzing qualitative data that can produce reliable findings (Harding, 2018).
On the other hand, the quantitative approach is based on the new assumptions made on the current theory and the corresponding strategy to test them. It is vital when no collected data is available on the topic, and it becomes the basis of primary results. This research will use a deductive approach using a quantitative research method to obtain the data required for the research.
Research method
A research method is the arrangement of conditions for data collection. It is the framework of different research methods and techniques that the researcher chooses for performing research. Research design fundamentally describes the type of research and may independently component which can alone be used to evaluate the worth of the findings (Diaz et al., 2019). It includes the data collection process, measurement of the data and analysis performed on the data collected. The data collection process explains the data collected in this research (Creswell, 2017). The research method used in this research will be based on a primary quantitative approach, and the data will be obtained through online questionnaires.
Data Collection Techniques
Data collection is the method of collecting and calculating data needed to carry out a particular study, considering the variables under consideration. In any study, two major types of data collection techniques are primary and secondary. Primary data is often called raw data because the analyst gathers it himself. However, information from authors/researchers is used in secondary data. The advantage of extracting data from primary sources is that it produces a potential conclusion. Secondary data, on the other hand, allows one to recognize the research gap in the literature as prior research is evaluated in greater depth (Merriam and Tisdell, 2015). For the current research, the researchers will use the primary data collection method in order to evaluate the impact of online grocery shopping on the UK's retail industry due to Covid-19. This will enable the researchers to reach a conclusion that will aid organizations and consumers.
Data Collection Instrument and Sample Size
According to Phellas and Seale (2011), it is extremely important to use the appropriate data collection instrument to be able to collect data accurately. The instrument that the researchers will use is online questionnaires and surveys. Appropriate sample size calculation used in a survey is a key step in the design of research (Delice, 2010). The research at hand requires a thorough analysis without wasting resources which is why a smaller-sized sample will be selected. An online survey and questionnaires of 50 store managers will be obtained to analyze the data. According to GLAEconomics (2020), thereare around 9,000 grocery outlets in London only, out of which 50 stores of the leading grocery retailers will be chosen randomly as the non-probabilistic technique.
Access and Ethics
Ethical Considerations
Ethical considerations are a central component of every research study, which the researchers must adopt. Regarding the current study, the primary data is to be obtained by electronic surveys and online questionnaires; a consent form must be developed to ensure informed participation in the study and that the participants are made fully aware of the research process. The information provided by the participants needs to be kept confidential and anonymous at all times, and compliance must be assured.
Limitation
Every study has certain limitations that need to be considered while conducting the research. The possible limitation that the researchers may face in the current study is the lack of previous data available on the issue at hand. Another possible limitation the researchers might face is that the research methodology used is primary quantitative, which confines the researchers to use a specific research mode. To overcome the limitations, the researcher can also plan to conduct a qualitative study in this area, as it might present new results to support the research. The Data collection method used in this research is also limited to users accessing the online surveys and questionnaires. This may further restrict the researchers in the study.
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