Impact of Amazon UK on Electronic Retail

Executive Summary

The emergence of the internet as an electronic market place and the rapidly growing number of internet users has significantly affected the world economy and the way businesses are conducted. In this wave, electronic retailing is one of the rapidly growing ways of doing business and has widely gained acceptance in the UK retail industry. First-movers such as Amazon have gained competitive advantage in the electronic retail industry and are influencing the evolution of this industry as well as the performance of latecomers in the industry. Within this background, the aim of this study was to establish the impact Amazon UK has had on the UK electronic retail industry over the past five years. A self-administered questionnaire with 21 questions was used to collect data from a sample of 9 respondents. Most of the questionnaire questions were investigative in nature given the qualitative nature of the study. The generated information was analysed qualitatively. The findings reveal that as a pioneer in e-commerce, Amazon UK has had a significant impact in the development of the UK electronic retail industry and remains the dominant player in this market. The study identifies a number of strategies that Amazon uses to maintain its position in e-commerce to include rapid expansion and internationalisation, adoption and investment in new technologies, customer centricity, and effective use of social media marketing. The study recommends that Amazon should integrate more augmented reality features in its app and be more aggressive in social media marketing and in adoption of new technologies for it to continue being a market leader. If you require business dissertation help, then our team is there in place to help you achieve all your academic goals.

Key words: Amazon, e-commerce, electronic retailing, social media marketing, rapid expansion, and augmented reality

CHAPTER ONE: INTRODUCTION

1.1 Background information

1.1.1 Background of the study

The emergence of the internet as an electronic marketplace has had a significant effect of the world economy and on the way business is conducted. Electronic retailing is rapidly gaining acceptance by internet users as a valid retail outlet (Kumar et al. 2016). A growing number of consumers are connected to the internet which increases the potential of them purchasing from electronic retailers (Rose and Dhandayudham 2014). Given the increasing acceptance of online channels in business, it is very common that more retailers are including web-based channels in their general business strategy. A further motive behind retailers using different channels is the changing shopper behaviour: more and more customers want to shop through different channels, and as a result, multichannel retailers are becoming the mainstream customer (Clarke et al. 2015). The growth in the number of online shoppers can be attributed to the benefits received by customers such as convenience and speed (Ashraf et al. 2014). The web-based sales channels have also attracted the attention of retailers as they help them reach a wider audience while giving them control over their sales and marketing activities (King et al. 2004). Other advantages of electronic retailing from the retailers’ perspective include support to the existing offline channels, diverting competition from new web-based entrants and their market, as well as reducing transaction cost (Clarke et al. 2015).

Although the salience of the internet and the changing consumer behaviour have encouraged brick-and-mortar retailers to consider multichannel retailing through adding internet channels, the internet and catalogue-based retailers have also added channels such as physical stores and mobile phones (Lewis et al. 2014). For example, Amazon has rolled out order-collection lockers in different retail shopping centres in the UK to complement its existing mobile, internet, and tablet shopping channels (Lewis et al. 2014). Although multichannel retailing has emerged a key strategic issues for most retailers, there is a lack of empirical electronic retailing research that explores the how the internet has affected retailing (Janeska et al. 2017). Besides, although the electronic retailing literature suggests that Amazon as a pioneer in electronic retailing has had a significant effect in electronic retail, this electronic retailing literature provides little insight on how Amazon has affected the electronic retail industry.

The principal contribution of this paper is that it explores the impact Amazon UK has had on the UK electronic retail industry over the past five years. A further contribution of the paper is that it considers the trends in electronic retailing in UK over the past five years and considers how Amazon affects and is affected by these trends. To explore these electronic retailing themes, the paper reviews and synthesises relevant aspects of the electronic retailing literature and the wider literature on retailing and e-commerce. The logic for drawing upon the more general literature is the limited electronic retailing literature that provides insights into the drivers and benefits of electronic retailing. A key theoretical contribution of this paper then is that it explores a major theme (impact of Amazon on electronic retailing) that is empirically under-researched in the growing electronic retailing literature.

1.1.2 The UK retail industry

Verhoef et al. (2015) define retailing as a set of business activities that facilitate the exchange of goods and services for the purpose of household, family, or personal use, whether performed in a store or through other forms of non-store selling. Analogously, Amin and Mahasan (2019) define retailing as a combination of activities that increase product value for the end user. Retailing is also known as Business to Consumers (B2C) business in that it sells products and offers services to end-user consumers. In the retail industry, people buy their personal and household needs as well as daily use products.

The UK retail industry is one of the major contributors to the UK economy. For example; in 2019, the UK retail industry had a total number of 306,655 retail stores and these stores generated 5% of the UK GDP total value (Retail Economics 2020). Retail is also considered the largest single private sector employer in the UK, with one in ten retail staff and annual revenue totalling to £358 billion.

The retail industry has undergone massive growth since the last decades and this has created a lot of competition forcing retailers to secure their competitive advantage in order to remain competitive. In modern retailing, e-commerce has gained significant attention as an approach through which retailers are able to create and maintain competitive advantage. E-commerce in the retail industry is also known as e-retail, electronic retail, or e-tail, and refers to the sale of goods and services to end-user consumers through the internet or other electronic channels. According to Moagar-Poladian et al. (2017), e-tailing has become more and more important today given that people do not have enough time for shopping in the traditional way. Similarly, Fornari et al. (2018) argue that the stiff competition in the global market has forced entrepreneurs and employees to dedicate a lot of time to work, which leaves them less time for shopping, leisure, and family. E-tail has therefore come to fill in this gap, saving time for consumers. In this respect, e-commerce in the retail industry has the advantage of saving time for consumers, which can be attributed to its prominence among online retailers (Faloye 2014).

1.1.3 Electronic Retailing in the UK

A research by Deloitte (2019) reveals that digital technology is influencing 63% of in-store retail sales in the UK, which is equivalent to almost £230 billion in 2018. A report published by the Office of National Statistics (2018) reveals that the UK is the most advanced e-commerce market in Europe with revenue of 688.4 billion GBP. Consistently, Mintel (2019) writes that the market share for e-commerce in the UK remain high: for example, the percentage of internet sales in some markets such as travel, DVDs and books make up between 50% and 80% of all retail sales. However, the study shows that in some sectors, the internet has contributed in a small way; for example, internet food sales are around 8% although they are growing rapidly.

Deloitte (2019) argue that in the UK retail sector, market penetration varies by organisation and by product and therefore some organisations have been seen as market leaders in the development of electronic retailing while others have suffered notable failures especially early pure e-players. Amazon, for example, is seen as a market leader in electronic retailing. Mintel (2018) argue that UK retailers are improving the quality of their websites, their online customer services, reliability, increasing ease of navigation, and easing interaction which means that the UK electronic retail industry will continue expanding. Additionally, e-players are very innovative, which has enhanced the attractiveness of the electronic retail industry and this will continue given the increasing number of e-retailers in the UK (ONS 2018). In light of this information, an important question would be whether Amazon will remain a market leader in UK electronic retailing. In order to answer this question, this study analyses the behaviour of Amazon over the past five years particularly how it responds to the arising trends as compared to the response of the competitors. Therefore, an important contribution of this study will be to predict the competitiveness of Amazon in the future based on past behaviour in the rapidly growing electronic retail industry.

1.1.4 Evolution of Amazon UK as an electronic retailer

Wang et al. (2018) argue that although there are many electronic retailers in the UK, Amazon UK is the most noteworthy and has had a significant impact on electronic retailing. In the same vein, Kaushik et al. (2018) write that Amazon UK has extensively affected electronic retailing as it has reshaped shopping dynamics, disrupted supply chains and bore immense pricing and margin pressure on any market segment it chooses to enter. In agreement, Adaji and Vassileva (2017) state that Amazon’s entry into a market cannot go unnoticed by consumers and other retailers, which has had a significant effect in the success of the competitors. For example, Amazon’s entry into the grocery industry has resulted in closure of incumbents while other retailers have gone bankrupt. Although the authors state that Amazon is not directly responsible for the failure of traditional retailers, they emphasise that the impact of Amazon on the performance of these stores cannot be overlooked. In line with this information, this study seeks to establish the effect Amazon UK has had on electronic retailing over the last five years.

1.2 Problem statement and motivation

Over the last two decades, the number of internet users has dramatically increased and following this rapid growth is the rise in the number of online shoppers in UK and globally (Mintel 2018). Commensurate with the rising number of online shoppers has been a dramatic rise in the number of electronic retailers in the UK and globally (Deloiite 2019). Tandem with the growing number of electronic retailers is the competitiveness of the electronic retail industry and of interest here is how the presence of Amazon UK as a pioneer in this industry affects the performance of other e-retailers. There are several potential reasons why Amazon remains market leader such as flexibility in responding to new technologies and customer needs and the broad range of products it offers but this are not of great importance in this study. There is considerable empirical evidence that Amazon UK is a market leader in electronic retailing and has influenced the performance of other retailers in this industry (Kaushik et al. 2018). However, there is paucity in electronic retailing literature and particularly that analysing the effect Amazon has had on electronic retailing over the past five years. In addition, the is very scarce literature analysing trends in electronic retailing over the past years and how electronic retailers respond to these trends and how this affects their competitive position. In order to fill these gaps, this study explores the impact Amazon UK has had on the UK electronic retail industry over the last five years.

1.3 Aim and objectives

The aim of this study is to establish the impact Amazon UK has had on the UK electronic retail industry over the past five years (2015 to 2019). In order to achieve this aim, the study is guided by the following objectives:

1. To examine the latest trends in electronic retailing and understand how Amazon UK responds to these trends
2. To find out what differentiates Amazon UK from other electronic retailers in the UK
3. To investigate how Amazon UK utilises social media marketing for marketing, advertisement, and sales and how this affects its performance

1.4 Scope of the study

This study is cross-sectional in nature due to resource and time constraints. According to Saunders et al. (2016), a cross-sectional study focuses on a particular issue at a particular time. This study is conducted for meeting academic requirements and therefore time-constrained, which lends it to investigate the impact of Amazon UK on electronic retailing in UK in a snapchat. In this study, retailing is defined as the sale of goods and services to end-users for personal and household use. The scope of the study is limited to the effect Amazon UK has had on the UK electronic retail industry. When considering the performance of other e-players, the study will only consider those operating in the UK electronic retail industry.

CHAPTER TWO: LITERATURE REVIEW

2.1 Theoretical Background

In line with the research objectives, this study will adopt viewpoints from industrial economics, which refers to the study of firms, industry, and markets (Razak and Vattikoti 2018). Industrial economics focuses on the behaviour and organisation of firms while looking at market and industry competition and economic policy (Shehata and Montash 2019) and therefore having a significant impact of organisations’ strategic management (Hofmann and Osterwalder 2017). Porter’s Five Forces is one of the main frameworks that link industrial economics to business strategy. The primary idea of Porter’s Five Forces theory is that for an organisation to attain long-term profitability, it has to respond to competition in a strategic way (Hofmann and Osterwalder 2017). Nonetheless, it is not enough to only consider direct rivals within the industry: rivalry among existing competitors is only one of the five forces that shape competition. The other forces include (1) the threat of new entrants: new entrants bring more capacity, new ideas, and the desire to gain market share which puts pressure on existing prices and investment rates. (2) The bargaining power of suppliers: the bargaining power of suppliers affects the prices of sourced products and services while limiting services and quality, and pushing costs to all industry participants. (3) The bargaining power of buyers: an increase in the bargaining power of buyers lowers the price at which they acquire products and services while giving them the ability to demand special services and high quality. (4) The threat of substitute products: substitutes have similar functions as the products of the focus industry and they can be used in place of the existing products.

Other than the above five forces, digitalisation has significantly influenced competition in various industries. Information technology has been used to develop new products and services, as well as for the innovation of business models (Razak and Vattikoti 2018). Digital transformation has provided offers such as e-commerce, online booking, and e-banking and these have emerged standard services in industries today. These developments have offered customers more benefits; for example, markets have become more efficient and prices have gone down while almost all sorts of products are available online (Lüttgens and Diener 2016). Therefore, digitalisation has intensified the level of competition in industries but despite these changes the concepts of Porter’s Five Forces remain valuable and applicable even in this study.

2.2 Trends in the e-commerce industry and Amazon’s competitive position

2.2.1 Augmented Reality

Extant research has shown that augmented reality is an important technology for the industry 4.0 approach which seeks to promote human-centric industrial environment. According to Masood and Egger (2019), augmented reality helps humans to access the digital world through information easily available in the physical world. On the other hand, Yim et al. (2017) argues that organisations are using the immersive content offered by augmented reality to offer enhanced intuitive interface and an enriching experience to customers, and therefore creating a new paradigm in e-commerce.

Cruz et al. (2019) predict that augmented reality is one of the emerging applications that will define the future of retailing. From their perspective, augmented reality has improved the customer decision-making process in that it has enabled functions such as interactive visualisation of products and advertisements. Analogously, Olsson et al. (2013) write that integrating information processing in everyday objects and making the physical world a user interface for digital information had been a popular target for so long but augmented reality has finally made it happen to the advantage of retailers and e-shoppers. From a different perspective, Kang et al. (2014) write that retailers have significantly used augmented reality to shape user experience. In defining user experience, Kang et al. (2014) write that potential users’ expectations should be treated as an important element as they reflect a customer’s perception of the product’s quality and capability. Augmented reality has significantly enhanced user experience in that it improves a customer’s perceptions of a product, which influences purchase behaviour (Masood and Egger 2019). In the same vein, Lee et al. (2011) write that augmented reality allows customers to interact with their potential purchase before buying it and determining whether the product is right for them, a feature that has made augmented reality a perfect fit into e-commerce. Peng et al. (2016) argue that the applications of augmented reality are widespread across e-commerce because they provide an in-store experience to shoppers regardless their location: devices superimpose 3D objects in various spaces giving customers a chance to interact with products at the comfort of their homes. A study conducted by Chandra and Kumar (2018) reveals that retailers who implement augmented reality technology benefit with more loyal customers as compared to retailers with normal e-commerce websites. Despite these advantages of implementing augmented reality technology in electronic retailing, empirical evidence shows that the adoption of augmented reality by e-commerce is marginal (Yim et al. 2017). Nonetheless, Amazon UK is one of those retailers that had adopted augmented reality, which allows its customers to interact with potential purchases prior to buying them and determining whether these products are the ones they need.

By adopting augmented reality, Amazon creates a barrier for new entrants and the experience it has had with this technology would allow it to retaliate were new entrants to enter the market with augmented reality technologies. For example, Amazon has already enhanced its technological competency by developing 3D product models using 3D modelling software (Chandra and Kumar 2018). This means that Amazon is technologically competent and therefore confident to adopt new technologies that new entrants would not be confident adopting, which gives Amazon competitive advantage. In addition, through adoption of augmented reality technologies, Amazon has been able to help its customers anticipate their purchases unlike other e-retailers in the UK, which gives Amazon a competitive advantage. In this background, this study anticipates that Amazon UK has adopted augmented technologies, which has differentiated it from other e-retailers in the market thus giving it a competitive advantage.

2.2.2 Online Review Manipulation

An extensive literature agrees that user-generated online reviews are an important resource for consumers in the decision-making process but growing literature shows that online user reviews are manipulated to positively affect quantity and price transactions. According to Mayzlin et al. (2014), the primary aim of online reviews should be to create producer and consumer surplus through enhancing the ability of consumers to evaluate unobservable product quality but the existence of fake or promotional online reviews is a great impediment to the usefulness of online reviews. In the same vein, Kumar et al. (2018) argue that reviewers with material interest in consumers’ purchase decisions post reviews that influence consumers but these reviews resemble those of disinterested reviewers. Analogously, Gössling et al. (2018) write that reviewers can influence the consumers’ decision by optimally choosing the information structure. In the e-commerce industry, cases of fake reviews have been reported: for example, Hausman et al. (2014) note that organisations are aware that reviews are coming from biased sources whereas consumers do not know whether the review is coming from a biased or unbiased source. This approach is closely related to the research of Zhang et al. (2016) who conclude that competing firms together with unbiased consumers post messages about product quality online and in this case, consumers are not able to differentiate between biased and unbiased word-of-mouth thus they infer product quality based on product reviews, which could be misleading. Chen et al. (2019) shares the same thoughts and adds that producers of low quality products expend more resources on promotional reviews thus manipulating consumers into buying the low quality products. A study conducted by Munzel (2016) reveals that the most intuitive form of biased reviews is a situation where a producer posts positive reviews for his/her own products. These biased reviews affect consumer response to the reviewed products and in most cases drives traffic to the e-shop but the results are frustrating and thus fake reviews are a major challenge in the e-commerce industry. Amazon has had an incident of biased review: in February 2004, an error at Amazon’s Canadian site caused the company to mistakenly reveal the identities of book reviewers, and it was evident that a number of these reviews were written by the books’ own publishers and authors (Hausman et al. 2014). Today, there are more forms of biased reviews; for example, rivals are likely to post negative reviews on each other’s products for personal benefits.

While online review manipulation may negatively affect the sales of an organisation, Ren et al. (2018) argue that the influence of online consumer reviews is dependent on the credibility enjoyed by an organisation. This is based on the trust transfer theory which holds that trust is transferred from a trusted entity to an unknown target but this is only possible if the unknown target trusts the source of the information. From this perspective, Amazon UK is considered a credible source and therefore any information posted on its website it likely to be considered credible. Nonetheless, Amazon UK may not have control over what consumers and its competitors post of its social sites, which means it could suffer the negative effects of online review manipulation. Nonetheless, its firm-generated content is considered highly credible and with a large customer base, it is likely to receive positive reviews, which is an important source of information in the customer decision-making process.

A study conducted by Kwark et al. (2014) reveals that consumers increasingly depend on online product reviews to make purchase decisions which implies that the trustfulness and quality of reviews is of great importance in electronic retailing. With this fact, the study argues that many firms especially new entrants manipulate online product reviews in order to change or shape consumers; pre-purchase beliefs about product quality hence increasing product sales. As a result, customers are more cautious with online product reviews especially those about new products and new entrants (Zhang et al. 2019). This is an advantage to Amazon given that Amazon UK is a renowned brand thus considered credible. Additionally, only very few cases of online review manipulation have been reported for Amazon (only authors promoting their books through positive online reviews) which increases its likelihood of persuading consumers through online reviews as compared to other electronic retailers in the UK (Hausman et al. 2014).

As a pioneer in the e-commerce industry, Amazon has built its image and reputation and has benefited with loyal customers who no longer rely on product reviews to make purchase decisions (Wu 2019). Therefore, the rising cases of biased online reviews may have a lower impact on Amazon as compared to new entrants. It would also be hard for new entrants to successfully influence customers through posting negative reviews on Amazon’s products given that Amazon is a renowned firm. However, the rise of biased online reviews will adversely affect Amazon in its pursuit to acquire new customers as these user-generated reviews are an important source of information for new customers. Nonetheless, Amazon remains active in tracking down fake reviews: it has developed technologies to detect fake reviews and take actions against the sources, which is aimed at discouraging future fake reviews.

2.2.3 Expansion strategy

In the hypercompetitive business environment, it has become common for organisations to consider internationalisation strategies of their operations as a strategy for gaining competitive advantage and surviving the intense level of competition. A study conducted by Li et al. (2017) shows that international customers, global supply chains, global sourcing, and joint ventures overseas are reshaping the corporate environment of business organisations. On the other hand, Johanson and Martín (2015) argue that rapid expansion has a positive effect on the performance of an organisation in that it increases the scope of first-mover advantages as well as the speed at which the organisation exploit and acquire valuable assets. In the same vein, Liu et al. (2012) write that rapid expansion increases an organisation’s potential to obtain a first-mover advantage. Through rapid expansion, organisations are able to obtain valuable resources that are difficult to imitate for latecomers to a market while putting the organisation in a better position to exploit the existing strategic resources (Mohr and Batsakis 2017). In the retail context, first-mover benefits could include the ability to access and secure desirable retail locations which blocks late-arriving competitors (Goparaju 2015). First-mover advantages are essentially important when a small window of opportunity exists for the introduction of products and services into a new market (Wang et al. 2016). This implies that a slow expansion process can have negative effects on the performance of an organisation in that it lowers the organisation’s chance to achieve a first-mover advantage (Deng and Wang 2016).

As a pioneer in electronic retailing, Amazon has enjoyed several first-mover benefits through which it has been able to maintain its market leader position. First, Amazon has learnt how to better serve the needs of online shoppers and thus acquired knowledge that is difficult to imitate fir the competitors. Second, Amazon has built a large customer base which is difficult for the latecomers to attain. Third, Amazon is customer-centric and has built in it a place where consumers discover anything they would want to purchase online, which has given it a highly recognisable and trusted brand name difficult for competitors to imitate. Additionally, Welch (2015) writes that as a pioneer and a first-mover, Amazon was able to acquire valuable resources and maximise the value extracted from these resources before they become eroded and obsolete. For example, Amazon has developed and acquired a string and international recognised brand name thus is more likely to expand or internationalise to exploit this valuable resource as compared to electronic retailers whose brands are less popular (Goparaju 2015). This implies that other e-retailers may not be able to acquire and exploit resources that Amazon exploited as a first-mover which is a source of competitive advantage for Amazon. For these reasons, rapid expansion is a key means for Amazon to build up and acquire strategic resources that are difficult for other e-retailers to acquire thus giving it a competitive advantage.

Through internationalisation, Amazon has been able to earn revenues from operations and sales outside its country of origin and to remain competitive, internationalisation has become a continuous process for involving with consumers and suppliers from different countries (Hietala 2017). Through international expansion, Amazon has been able to control the power of suppliers: it has a large supplier base and therefore it is able to control the prices at which supplies are made. In addition, Amazon has been able to control the power of buyers: although the company has a large customer base, the customers are spread across geographic boundaries and across different social status, which implies they have no common voice over what prices they prefer. With a large supplier base, Amazon deals with a wide range of products which makes the threat of substitute products a weaker force for Amazon. Therefore, international operations have helped Amazon strategically manage its business environment which is a source of competitive advantage.

2.3 Social media marketing

2.3.1 The concept of social media marketing

Yadav and Rahman (2017) define social media as a group of internet-based applications that build on the technological and ideological foundations of Web 2.0, and that allow the creating and sharing of user-generated content. Social media takes various forms such as social networking sites, wikis, blogs, and microblogging sites among others (Bilgin 2018). Presently, the most popular social media platforms are Facebook, Twitter, and YouTube (Abed et al. 2015).

Extant literature has not reached consensus in defining social media marketing: some researchers define social media marketing as a way of connecting and interacting with existing and prospective customers and building relationships with customers (Yadav and Rahman 2017), while other authors define social media marketing as the process of enhancing stakeholders’ value through marketing activities through using social media platforms in marketing communication (Constantinides 2014). However, there ae similar components of social media marketing among these definitions and in this study, social media marketing will be defined as the process of encouraging social media users to spread social media marketing content through social media marketing activities such as interaction, word of mouth, information and personalisation. In other words, social media marketing is the process by which organisations create, communicate, and deliver online marketing offerings through social media platforms to build and maintain relationships with stakeholders while enhancing stakeholders’ value. Originally, social media was used for socialisation purposes but today organisations increasingly use social media to market their products and ensure customers and potential customers remain updated on these products (Vinerean 2017). Social media marketing can therefore be seen as a strategy through which organisations engage with their customers and provide information about products.

2.3.2: Social media marketing in e-commerce

Social media is widely utilised for e-commerce marketing activities (Yadav and Rahman 2017). The internet has drastically changed the nature of shopping over the last two decades and this has supported the proliferation of e-commerce sites shifting shopping to e-shopping (Mohammadpour et al. 2014). The increased acceptance of social media sites such as Facebook and Twitter has opened prospects for innovative business models of e-commerce (Komodromos et al. 2018). E-commerce and social shopping are internet-based social media platforms that allow consumers to participate actively in marketing and selling products in online communities and marketplaces (Abed et al. 2015).

The incorporation of social media components such as user ratings, recommendations, reviews, referrals, public wishlists, and sharing of purchased products on social media platforms have emerged a significant part of social media marketing, and are widely adopted by e-commerce companies such as Amazon (Abed et al. 2015). The extant literature on social media marketing in e-commerce has focused on broad constructs of social commerce such as commercial intentions, the characteristics of social commerce, and the constructs of social commerce. Nonetheless, social media marketing in the e-commence industry has not received much attention. Given that social media marketing is the essence of social commerce and is among the most important activities of social commerce, and customers play a pivotal role in social media marketing (Yadav and Rahman 2017), it is very important to explore the role of social media marketing in the e-commerce industry.

A study conducted by Yan et al. (2016) reveals that social media platforms have become highly influential in shaping consumer behaviour in that consumers are significantly active in maintaining and following virtual relationships over social media with a majority of the conversations revolving around brands and consumption. At the same time, retailers have recognised social media users to be potential customers and they have therefore made significant attempts to be the centre of conversations on social media platforms (Di Pietro and Pantano 2012). In the context of electronic retailing, e-retailers have recognised consumer purchase to be a social act and highly dependent on social relationships and as a result have dynamically evolved in their approach and design to build strong relationships with social media users (Bhat and Singh 2018). As a response to the increasing consumers’ need for collaborative spaces as well as assured and convenient decision making social media has become an integral part of e-commerce (Yadav and Rahman 2017). In order to leverage the social media space and its positive effect on consumer participation, value, and engagement, Amazon has evolved itself through weaving social networking features into its website, thus participating in social commerce (Bilgin 2018). At the same time, social networking sites such as Facebook and Twitter which were originally huge social spaces in themselves have also extended their hands towards e-commerce to improve their users’ online social capital (Di Pietro and Pantano 2012). As a consequence, electronic retailers have been forced to create pages on Facebook and Twitter among other social networking sites in order to provide information and e-services to attract new customers while maintaining the existing ones. The pages on social networking sites are often related to the online shopping space helping organisations to attract social media users, reach mass audience (with Facebook, an organisation can reach up to 200 million of active Facebook users ), and target different segments based on consumer profiles of these social networking sites (Yan et al. 2016).

Another study conducted by Nadeem et al. (2015) reveal that in the current online environment, consumers are likely to avoid traditional communication practices as well as be sceptical about adverts on traditional advertising media. When this is the case, the authors argue that the sceptics are highly likely to seek alternative sources of brand information such as visiting social networking sites, searching for user-generated content, and reviewing user-generated brand reviews in making purchase decisions. User –generated content and user-generated brand reviews have higher persuasive power over retailer-generated content and in light of this, electronic retailers are integrating user-generated content in their marketing activities while allowing consumers to interact on their websites and on their social pages (Chang et al. 2015). Indeed, Amazon has adopted social commerce, whereby it allows its customers use its social platforms to create, enquire, and share product-related information, views and remarks while placing their orders (Wang et al. 2019). Today, Amazon has given its customers a chance to comment and review its product lists on all its marketing platforms including on social media sites. In addition, Amazon replies to almost all comments left by consumers on its posts and it responds quickly and politely while providing useful information and links. In responding to the comments, Amazon addresses those who comment by their first name, which adds a human touch to the interaction on social media. Further, Amazon sings off each comment using the first name of Amazon’s employee who is responding to the comment which also adds a human touch to the interaction. With this approach, consumers are free to comment and seek information of Amazon’s social media platforms with the assurance they will get the required information. Amazon responds to its customers in a polite and helpful way regardless the nature of the comment: when a question is asked, Amazon answer and when a customer expresses frustration, Amazon apologises and offers help. Amazon also creates and contributes to conversations, which has promoted brand success on social media (Lu et al. 2016). Further, Amazon is social in its social media efforts; for example, customers with Facebook-connected accounts are able to see product reviews written by their Facebook friends, as well as the products their Facebook friends have put on their Amazon Wish Lists.

To promote sales, Amazon uses Facebook to highlight products and to offer date-related coupons and discounts. For example, when a special day such as Mother’s Day is approaching, Amazon’s Facebook page floods with gift ideas and discount coupons to purchase these gifts (Lu et al. 2016). This approach to social media marketing ensures Facebook users do not visit other sites in search of gifts to buy their friends and family.

Amazon has a different approach to marketing on its Twitter campaigns. Amazon has adopted Twitter as a platform for content marketing which serves to create and maintain an engaged community of customers while encouraging prime membership. For example, Twitter is a vehicle through which Amazon drives its followers towards its other products and services such as Amazon Music or Prime Video. It is also through Twitter that Amazon promotes its blog content which helps keep its customers and suppliers informed. Therefore, Amazon has not only used social media for marketing but also for engaging customers and establishing a strong relationship with customers.

CHAPTER THREE: METHODOLOGY

3.1 The Epistemological Stance

Research philosophy relates to development of knowledge and the nature of that knowledge while epistemological stance relates to what is considered acceptable knowledge in a particular field of study, in this case what is acceptable knowledge in e-commerce in the retail industry. There are two broad research philosophies, positivism and interpretivism (Saunders et al. 2016). The positivism philosophical stance works with observable social reality to produce law-like generalisations similar to those that would be produced by a natural scientist (Hennink et al. 2020). The interpretivism philosophical stance is critical of positivism and argues that the social world of business management is far too complex to be defined by a series of law-like generalisations (Ghauri et al. 2020). Interpretivism as such believes that is it necessary to understand the role of humans as social actors and therefore conducts research among people to understand the sense they make of the world they live in.

This study adopts the interpretivist paradigm and believes that knowledge is socially constructed, subjective, and may change depending on the different contexts. Additionally, subjective meanings and social phenomena are considered acceptable knowledge in the study. The study therefore focuses on the details of a situation and the reality behind these details to develop subjective meanings. The selection of this epistemological stance is influenced by the purpose of this study. The study aims at establishing the impact Amazon UK has had on the e-commerce retail industry over the past five years: this is an open and inductive research question that can be answered using subjective meanings through focusing upon the details of e-retailing and the reality behind these details as understood by the researcher and the study participants.

3.2 Research Approach

The research to approach can be deductive or inductive (Ghauri et al. 2020). In the deductive research approach, one reviews existing literature to identify theories and ideas necessary for data analysis while in the inductive approach, one explores the collected data, develops theories from the data, and relates the theories to existing literature (Saunders et al. 2016). This study adopts a qualitative approach and therefore follows inductive logic whereby data is collected and theory developed as a result of the data analysis. The selection of the inductive approach is informed by the aim of the study: the purpose of the study is to understand the impact Amazon UK has had on the e-commerce retail industry over the last five years and therefore it would be better to understand the impact through collecting qualitative data and analysing it. The result of this analysis will be the formulation of a theory. There is another advantage of induction that influenced its adoption in this study: it allows alternative explanations of what is going on which cannot be attained through deduction (Saunders et al. 2016). Deduction restricts theories to what exists in previous literature while induction is able to suggest other theories.

3.3 Research Strategies

Saunders et al. (2016) identify seven research strategies namely experiment, survey, case study, action research, grounded theory, ethnography, and archival research. Of these seven research strategies, this study adopts the survey research strategy. While the survey strategy is commonly used in deductive approach, it can be used in induction given the possibility to collect qualitative data through survey (Rea and Parker 2014). However, the data collection instrument must contain a lot on open-ended questions to ensure the respondents are able to explain their answers rather than limiting information to a set of statements respondents would be required to respond to. Therefore, given that inductive logic adopted for this study, a majority of the questions in the questionnaire are open-ended to ensure the respondents can say as much as possible based on their understanding of the research issues. An interview would have been more appropriate in collection data but given the lockdown due to the Covid Pandemic, it is easier to collect data using a set of open-ended questions questionnaire.

There are various reasons that have influenced the adoption of the survey strategy in this study. First, the survey strategy allows the collection of large amount of data from a sizeable population in a highly economic way (Saunders et al. 2016). However, this study adopts the qualitative approach and follows the inductive logic and therefore data will be collected from a small sample given that the details matter. Second, a survey collects standardised data which makes comparison easier, which will be attained in this study through the use of a survey. Further, a survey is easy to explain and understand which will ensure all the research participants have a common understanding of the research purpose and objectives. A major limitation of using survey in induction is the fact that survey gives the researcher control over the research process (Saunders et al. 2016) and this may affect the respondents’ understanding of the research questions and their response as well. To overcome this limitation, the questionnaire will be self-administered which will ensure that each study participant answers every question based on his/her understanding.

3.4 Data Collection

In this study, data will be collected using a self-administered questionnaire. The questionnaire contains 21 questions with a majority of the questions being open-ended. The questionnaire is structured into four parts: part one seeks to collect demographic information, part two focuses on the state of the UK retail sector and the current trends, part three considers how Amazon UK stands out in the UK retail industry, and part four focuses on Amazon’s approach to social media marketing. A majority of the questions are investigative in nature to ensure each research question is addressed satisfactorily and in a way that meets the research objectives. In each every question, the study is interested in the respondents’ opinions as this is what constitutes acceptable knowledge in this study. With the open nature of the questions, the amount of space determines the fullness and length of response (Saunders et al. 2016), and therefore enough space of about 5 lines is left for every open-ended question.

3.5 Sample Selection

According to Eisenhardt et al. (2016), research using an inductive approach is likely to be particularly concerned with the context in which the events are taking place, and therefore the study of a small sample is more appropriate than a large number of participants. The inductive approach is also very likely to work with qualitative data and collecting qualitative data from a large sample would be time consuming given the amount of time required to code the data (Saunders et al. 2016). With this information and the open-ended nature of the questions in the data collection instrument, a smaller sample was preferred. However, the open-ended nature of the questionnaire questions and the amount of space allowed for the response was likely to influence a low response rate. In order to achieve the study objectives amidst the expected low response rate, a somewhat larger sample was preferred.

The sample was selected using convenience sampling. Convenience sampling involves selecting haphazardly the cases that are easy to obtain for the study sample (Saunders et al. 2016). Convenience sampling was selected for this study given the ongoing lockdown which makes it challenging to physically interact with people as well as the open-ended nature of the questionnaire questions which would lower the response rate. The desired sample size is 9 persons but given the anticipated lower response rate, the sample selection process will be continued until a sample of 9 persons is reached (only those that will agree to be part of the study).

The sample (the 9 respondents) is ordinary persons living in the UK given that the research questions do not require people with any expertise. By the fact that ordinary people will be automatically consumers and living in UK, they will have the knowledge required to answer the research questions. However, it will be important that the sample has lived in the UK for more than five years given the study explores the impact Amazon UK has had on the e-commerce retail industry over the past five years. The sample will be approached using online survey. The time allowed for the respondents to complete the questionnaire and send it back will be 7days. During this period, the researcher will make follow-up calls or texts (at most twice) to remind the respondents they have some tasks to submit and find out if any information is required.

3.6 Data Analysis

Saunders et al. (2016) identify three processes through which qualitative data can be analysed namely summarising, categorising, and structuring. Of these processes, summarising is adopted in this study. Summarising involves producing a summary of the key points that emerge from the responses. The summary compresses long statements into brief statements which make sense of what has been said. Through summarising, the researcher becomes conversant with the key themes emerging from the collected data through which the data can then be analysed.

Having summarised the collected data, data display and analysis will be adopted. The data display and analysis process has three processes namely data reduction, data display, and drawing and verifying conclusions. Data display will involve organising and assembling the data into summary diagrammatic or visual display such as in tables. The tables and other visual displays will help develop theory.

3.7 Validity, Reliability and Ethical Issues

A questionnaire is used as the data collection instrument and to ensure content validity, the questions are investigative in nature and enough space is left for respondents to give as much information as possible. These questions are informed by existing literature which ensures they collect information that is both useful and essential to the study. In addition, a majority of the questions are open-ended to ensure they collect the opinions of the respondents as this is considered acceptable knowledge. To promote reliability of the questionnaire, a simple language is used which seeks to ensure the respondents consistently interpret the questions as intended by the researcher. Among the research ethics considered in this study are privacy of the study participants, voluntary nature of participation and the right to withdraw at will, informed consent, maintenance of confidentiality, and collecting data in a way that does not cause the respondents any form of harm.

CHAPTER 4: DATA ANALYSIS

4.1 Introduction

A self-administered questionnaire was used as the data collection instrument. The questionnaire was structured into four parts: part one seeks to collect demographic information, part two focuses on the state of the UK retail sector and the current trends, part three considers how Amazon UK stands out in the UK retail industry, and part four focuses on Amazon’s approach to social media marketing. A majority of the questions are investigative in nature to ensure each research question is addressed satisfactorily and in a way that meets the research objectives. The questionnaire was posted on the University’s Online Survey platform and respondents invited to participate in the survey. The invitation was closed once the desired sample of 9 respondents was attained. This chapter summarises and analyses the collected information.

4.2 Demographic Information

As shown in figure 1, a majority of the study respondents were male (56%) while females were 44%. Figure 2 shows that a majority of the respondents were aged between 20 and 25 years, followed by a tie between those aged between 26 and 30 years and those aged between 31 and 35 years. There was no respondent aged below 20 years, between 36 and 40 years or above the age of 40 years.

As shown in figure 3, 0% of the respondents had schooled up to the high school level, 44% had attained the undergraduate level, while the remaining 56% had attained the postgraduate level. Therefore, we can conclude that a majority of the respondents 56% had schooled up to the postgraduate level followed by 44% who had attained the undergraduate level.

Have you ever shopped from Amazon?

Figure 4 shows that 77.8% of the respondents (7 out of the 9 respondents) had shopped from Amazon while 22.2% (2 out of the 9 respondents) had never shopped from Amazon. Therefore, we can conclude that a majority of the respondents had ever shopped from Amazon by the time this study was conducted.

Do you shop from electronic retail stores?

As shown in figure five, when asked whether they shopped in electronic retailer stores, 8 respondents (88.9%) said yes while the remaining 1 (11.1%) said no. Therefore we can conclude that a majority of the study respondents (89%) are online shoppers while only 11% are not online shoppers.

4.3 The state of the UK electronic retail sector and trends over the past five years

The study respondents were asked to identify some of the trends they have seen in the UK electronic retail industry over the last five years. The figure bellow summarises their response.

As shown in figure 6, there are several trends that the UK electronic retail industry has witnessed over the last five years including personalisation and its evolution, augmented reality, voice search, fake online reviews, discounts, and internationalisation. Of these identified trends, a majority of the respondents emphasised on augmented reality, which could mean it has had a profound effect on e-commerce and the behaviour of online shoppers.

The respondents were then asked if the above identified trends have affected the UK electronic retailing industry and the figure below summarises their responses.

Figure 7 shows that the trends witnessed in the electronic retail industry has given birth to data and personalisation while making electronic retailing in UK much better. In addition, the figure 7 shows that with the trends that the UK e-commerce industry has undergone over the last five years, some consumers buy almost all essential products from Amazon. It is also evident from figure 7 that with augmented reality, consumers get a virtual experience of a product, which has influenced a surge in electronic retailing sales over the past five years. The figure also reveals that the trends in e-commerce over the last five years have changed the way consumers shop, commodity prices, and resulted in increased sales since electronic retailers have been able to get more customers. Finally, the figure shows that augmented reality and internationalisation have positively affected electronic retailing while fake online reviews have had a negative effect on electronic retailing but overall, online reviews have boosted e-commerce activities.

The respondents were then asked how the trends in electronic retailing over the last five years have affected shoppers experience and the figure below summarises generated data.

As evident in figure 8, one of the respondents indicated that the trends in e-commerce over the past five years have made online shopping more seamless while another respondents indicated the trends have helped customers create a real live perspective of a product before purchasing it, which in the respondent’s opinion has reduced the chances of customers returning products after purchase. According to another respondent, the trends in electronic retailing over the last five years have made customer service better. Another respondent indicated that the trends have increased price sensitivity while yet another respondents indicated that the trends have made it easier for a consumer to find a desired product. Another respondent indicated that the trends have made shopping easier while the last respondent indicated that the trends have had both positive and negative impact on shoppers’ experience but the overall effect has been positive.

From a more general perspective, the respondents were asked if the trends in e-commerce over the last five years have had an overall positive or negative effect on shoppers’ experience and the figure below presents their responses.

As shown in figure 9, all the respondents indicated that the trends in electronic retailing over the past five years have had an overall positive effect on shoppers’ experience while none indicated that the trends in e-commerce have had a negative effect on online shoppers’ experience. From this information, the can conclude that the trends in electronic retailing over the past five years have had a positive effect on customer experience.

The level of competition in the UK electronic retail industry

As shown in figure 10, 7 of the respondents mentioned that the level of competition in the UK electronic retail industry is high or very high, one respondent indicated the industry experiences a moderate level of competition, and the remaining one respondent did not know how competitive the UK electronic retail industry is. Among the respondents who mentioned that the level of competition is high, it was noted that Amazon is dominating and attributed this market leader position to Amazon’s ability to use the latest technology. Another respondent noted that the high level of competition is the electronic retailing industry can be associated with the homogeneity of the products in the e-commerce market and noted that customer service and user experience are the factors that differentiate one e-retailer from the others in the UK electronic retailing industry. From this information, we can conclude that the UK electronic retail industry is very competitive.

The respondents were then asked to explain how the trends that the UK electronic retail industry has undergone over the last five years have affected the level of competition in this industry. The figure below contains the obtained information.

Please note that one of the participants did not respond to this question.

As shown in figure 11, two respondents indicated that the recent trends in e-commerce have had a high effect on the competitiveness of electronic retailing while another respondent argued that the trends have increased the level of competition in e-commerce rendering the industry to be a major contributor to the UK economy. Another respondent mentioned that with the trends in e-commerce, the level of competition in this industry is very high and organisations that adopt the latest technologies have a competitive advantage. Another respondent indicated that with the trends in e-commerce, electronic retailing has become more competitive in terms of discounting and advertising. The other three respondents indicate that the trends in e-commerce have increase competition in electronic retailing, helped electronic retailers to flourish, and positively influenced competition in electronic retailing.

4.4 Amazon in the electronic retail industry

The respondents were asked to explain how responsive Amazon has been to the trends in e-commerce over the last five years. The figure below contains the generated data.

As shown in figure 12, one of the respondents indicated that Amazon is highly responsive to the trends in e-commerce while another one indicated that Amazon is building its best to cope with the trends in e-commerce. The third respondent indicated that Amazon has achieved a great customer experience but it lags behind in implementing augmented reality in its activities. Another respondent indicated that Amazon is up to the mark in responding to the changes brought about by the trends in e-commerce over the past five years. It was also mentioned that Amazon is always updated with the latest trends and it has always made the required changes whenever necessary. Another respondent indicates that Amazon is very flexible to the changes brought about by the latest trends in e-commerce.

The respondents were then asked if Amazon has contributed to the development of the e-commerce industry over the five years and the figure below contains the generated information.

As evident in figure 13, amazon has contributed to the development of e-commerce over the last five years through fast delivery and low prices, introduced new technologies to e-commerce, improved the product range in e-commerce, enhanced logistics, improved customer experience, and promoted competition within the electronic retail industry. One of the respondents considers Amazon as the boss in the UK electronic retail sector.

The respondents were then asked to explain what differentiates Amazon UK from other electronic retailers in the industry. The figure below summarises the generated information.

As shown in figure 14, the factors that differentiate Amazon UK from other electronic retailers in UK include attention to customer satisfaction, investment in latest technologies, experience in the industry which helps its attract and retain the best talent, a wide range of products and services, fast delivery, global delivery, brand value, high quality products, and its big size and numerous resources.

The respondents were asked to explain how Amazon’s leading position in e-commerce has affected the performance of other firms in the industry and the responses are summarised in the figure below.

As shown in figure 15, one of the respondents indicated that Amazon’s leading position in e-commerce hampers competition in the industry. Another respondent indicated that all electronic retailers want to be different and therefore they try to compete with Amazon. Another respondent indicated that Amazon is the largest player in the industry in terms of volume of business and revenue and thus it has dominated the industry. In agreement, another respondent indicates that Amazon’s leading position has affected the performance of other e-retailers. The respondent adds that the reviews and critics left by consumers on Amazon’s products changes the perspective of consumers towards the products provided by other electronic retailers, which serves the advantage of Amazon. The respondent argues that although there are other retailers in the industry offering high quality products and with great customer service, their performance remains minimal due to the strong presence of Amazon. From a different perspective, another respondent indicated that Amazon’s strong presence in electronic retailing has made other firms in the industry perform better while in the same vein another respondent argues that Amazon has made other electronic retailers work harder to compete with the giant. Another respondent indicates that the performance of Amazon has slowed down the performance of other electronic retailers in UK while another respondent indicates that Amazon’s performance has adversely affected the performance of other firms in the industry and in some cases so adversely leading to the failure of other firms.

The respondents were then asked to consider how Amazon responds to changes in the e-commerce industry and comment on whether it is likely to remain the market leader. The figure below contains their responses.

As shown in figure 16, all the respondents agreed that Amazon is likely to remain the market leader in the electronic retail industry. Among the reasons why Amazon could remain a market leader are the broad range of products it offers, its ability to adapt to new technologies, the quality of the products and services it provides, and because of it has absolute competitive advantage.

4.5 Social media marketing in e-commerce

The respondents were first asked whether Amazon has embraced social media marketing and the figure below shows their response.

Figure 17 shows that a majority of the respondents (88.9%) indicated that Amazon has embraced social media marketing while a few (11.1%) indicated that Amazon has not embraced social media marketing. Based on this information, we can conclude that Amazon has embraced social media marketing.

How social media marketing affects the performance of Amazon

As shown in figure 18, one of the respondents believes that social media marketing has not affected the performance of Amazon in a significant way while another respondents indicates that based on the performance statistics, social media marketing has had a significant effect of Amazon’s performance. Another respondent indicated that social media market has created an opportunity for all retailers to market their products to potential customers in a way that increases the exposure of these e-retailers thus increasing the competition for Amazon. Another respondent indicated that social medial marketing creates a huge customer traffic for Amazon and it has also enabled Amazon to advertise and market its products to more customers. Others indicated that social media marketing has increased Amazon’s customers and sales as well as improving the performance of Amazon.

The study also considered the role played by social media marketing in e-commerce and the figure below contains the generated data.

Figure 19 shows that social media marketing plays an essential role in electronic retailing. One of the respondents indicated that social media marketing has an essential great role for upcoming brands while another respondent indicated that social media marketing plays a huge role in electronic retailing given that a majority of consumers are active social media users. For electronic retailers, one of the respondents indicated that social media has been a powerful medium to reach prospective customers without time and location limitations. Another respondent indicated that in this era when people spend a significant amount of time on social media, advertisements and product recommendations create a strong brand presence which is noticeable even when consumers are just scrolling their social media pages. Another respondent indicated that social media marketing has increased customer awareness while yet another respondent indicated that social media marketing has helped many electronic retailers to learn about the e-commerce brand. Other respondents indicated that social media marketing helps promote businesses while helping in advertising to reach a large number of customers.

The customers were then asked if amazon has mastered the art of social media marketing and the figure below summarises their response.

Figure 20 shows that a majority of the respondents (65%) believe that Amazon has mastered the art of social media marketing while some of the respondents (35%) believe that Amazon has not mastered the art of social media marketing.

What recommendations would you make to Amazon?

The respondents were then asked to recommends changes that Amazon needs to make in order to maintain its competitive position in the electronic retail industry and the figure below contains the generated data.

Figure 21 contains the recommendations that the respondents made to Amazon which include to change its public relations strategy, to ensure the image of a product portrayed through advertising matches the real appearance of the product, to stop manipulating prices, and to improve user experience while integrating more features of augmented reality in their app. It was also recommended that Amazon should inform its customers about any changes they make, give more offers and discounts, expand its operations to other countries where they are not present, and to always remain true to customers, avoid online review manipulation, and be more aggressive particularly in social media marketing.

CHAPTER 5: DISCUSSION

In order to achieve its primary aim, this study was guided by three objectives under which the study findings will be discussed.

5.1 Trends in e-commerce over the past five years

The findings of the study identify a number of trends in electronic retailing over the past five years including augmented reality, online review manipulation, expansion and internationalisation, personalisation, and voice search. A majority of the respondents outlined that augmented reality has been a strong force in electronic retailing over the past five years with a significant influence on how business is conducted. This concurs with the findings of a study conducted by Masood and Egger (2019) which revealed that augmented reality is an indispensable technology in industry 4.0 given its ability to promote human-centric industrial environment. This study reveals that augmented reality gives consumers a virtual experience of a product resulting in sales surge. This concurs with the findings of a study conducted by Yim et al (2017) which shows that electronic retailers are immensely using augmented reality to enhance intuitive interface thus enriching the experience of customers. The findings of the study is also in line with those of a study conducted by Li et al. (2017) which reveals that augmented reality has promoted interactive visualisation of products thus improving user experience. This study also reveals that augmented reality has helped shoppers interact with potential purchases prior to purchase which lowers the chances of after sale return. This is in line with the findings of a study conducted by Yadav and Rahman (2017) which reveals that augmented reality allows customers to virtually interact with their potential purchase before buying them and determining whether these products are right for them thus lowering the chances of customers returning products after actual purchase.

The findings of this study reveal that fake online review has had a negative effect on the performance of firms in e-commerce which is consistent with past research. For example, a study conducted by Peng et al. (2016) shows that consumers are sceptical about large volumes of positive reviews made by customers on new brands, which negatively affects sales. However, this study establishes that although fake online reviews have negatively affected sales, in some cases they have enhanced sales. This agrees with the findings of a study conducted by Gössling et al. (2018) which reveals that the effect of online consumer reviews on sales is dependent of the credibility enjoyed by an organisation. This would also concur to the findings of a study conducted by Ren et al. (2018) which reveals that user-generated online reviews remain an important source of information during consumer decision-making journey therefore review manipulation may have an insignificant effect on sales. Generally, this study reveals that online review manipulation has not had an effect on the performance on Amazon, which could be explained using past research; for example, Kwark et al. (2014) argues that firms with a strong image and reputation are more likely to have loyal customers who no longer rely on product reviews to make purchases. This could be the reason that Amazon’s performance is not affected by the reported instances of fake reviews.

This study reveals that Amazon’s expansion strategy and its broad product range have boosted its performance and differentiated it from other electronic retailers in UK. This is in line with past research; for example, Mohr and Batsakis (2017) reveal that rapid expansion gives a firm first-mover advantages which are difficult for latecomers to imitate. This is true in this study: Amazon as the pioneer in electronic retailing has already benefited with a large customer based, reliable supply chain and credibility and these is difficult for other electronic retailers in UK to attain. As a pioneer, Amazon has also learnt how to better serve the needs of online customers and how to adapt latest technologies to its operations, which latecomers are yet to attain. Therefore, in agreement with past research, Amazon through its expansion strategy has obtained first-mover advantages through which it has been able to maintain its market leader position.

5.2 Factors that differentiate Amazon from other electronic retailers in the UK

This study identifies a number of factors that differentiate Amazon from other e-retailers in the UK including attention to customer satisfaction, huge investment in latest technology, wide range of products, fast delivery, brand value, the quality of its products, and numerous resources. Some of these factors are also identified in past research as drivers to Amazon’s competitiveness. For example, a study conducted by Kang et al. (2014) reveals that by adapting new technologies in its business model, Amazon has been able to bar new entrants and with the experience it has attained, it has been able to retaliate in cases where new entrants have entered the market with new technologies. Another study conducted by Chandra and Kumar (2018) agrees that Amazon’s brand value differentiates it from other e-players while positively contributing to its performance. This study also acknowledges global delivery to be a source of Amazon’s competitiveness, which concurs with the findings of a study conducted by Li et al. (2017) showing that with international customers, global supply chains, global sourcing, and joint ventures overseas, Amazon has reshaped the e-commerce environment. This study reveals that Amazon differs from other e-retailers on basis on resources which concurs with the findings of a study conducted by Welch (2015) revealing that Amazon through rapid internationalisation and expansion has been able to obtain valuable resources that are difficult for latecomers to imitate thus putting it in a better position to exploit the existing strategic resources. This study reveals that Amazon is yet to use augmented reality to its advantage which dos not concur with past research. For example, Olsson et al. (2013) establish that retailers who implement augmented reality technologies benefit with more loyal customers and consider Amazon to be one of those retailers.

5.3 Social media marketing in e-commerce

The findings of this study reveal that social media marketing plays an imperative role in e-commerce especially in giving exposure to new entrants and reaching large customer base. This concurs with the findings of a study conducted by Yadav and Rahman (2017) which reveals that social media has become an integral part of e-commerce marketing activities. This is also in line with the findings of a study conducted by Yan et al. (2016), which reveal that social media platforms have become highly influential in shaping consumer behaviour thus organisations view social media users as potential customers. The findings of this study agree with Bhat and Singh (2018) that electronic retailers have recognised consumer purchase to be a social act and highly dependent on social relationships thus retailers invest in developing strong relationships with consumers on social media platforms.

This study establishes that Amazon has mastered the art of social media marketing which agrees with the findings of a study conducted by Bilgin (2018) revealing that Amazon has evolved itself through integrating social networking features into its websites thus actively participating in social commerce. The findings of this study also support Di Pietro and Pantano (2012) argument that electronic retailers are increasingly using social networking sites to improve their users’ online social capital. For example, Amazon is active on different social networking sites such as Facebook and Twitter where it engages its customers and provides information on its products and services. This study shows that Amazon’s social media presence has directly and indirectly promoted sales in that internet users access advertising messages even when they are just scrolling through their social media pages. Directly, Amazon has allowed its consumers to participate in its social platforms by creating, enquiring, and sharing product-related information, views, and remarks while placing their orders. Amazon actively responds to consumers’ comments, which has promoted user engagement of social sites. The study therefore concludes that through social media marketing, Amazon has been able to acquire a large and informed customer base.

CHAPTER 6: CONCLUSION AND RECOMMENDATIONS

6.1 Conclusions

The ultimate aim of this study was to explore the impact Amazon UK has had on the UK electronic retail industry over the past five years. In order to attain this aim, the study was led by three objectives: it sought to understand the trends in e-commerce over the past five years, to explore how different Amazon UK is from other e-players in the UK, and to explore the use of social media marketing in the UK electronic retail industry. The study has identified several trends that have changed electronic retailing in the UK over the past five years including augmented reality, online review manipulation, expansion and internationalisation, and personalisation. The study reveals that firms that have adapted augmented reality technologies in their operational strategies are more competitive as these technologies enhance user experience. The study also establishes that online review manipulation is on the rise in electronic retailing but it has had both positive and negative effects of firm performance: it positively affects sales but negatively affects consumer perception of the reviewed products. The findings of the study reveal that through rapid expansion and internationalisation, Amazon has been able to acquire and exploit resources that other players in the electronic retail industry have not been able to imitate thus giving it a competitive advantage. The study has identified a number of factors that differentiate amazon from other electronic retailers in the UK: being a first mover, imitable resources, broad range of products, fast delivery, lower prices, attention to customer satisfaction, global delivery, and huge investment in latest technologies. The study also establishes that social media marketing has emerged an integral part of marketing in electronic retailing and concludes that Amazon has mastered the art of social media marketing through which it has been able to reach more customers and keep them engaged.

6.2 Practical Implications

Based on the findings of this study, the following recommendations are made to Amazon but could also be generalised to other firms in the UK electronic retail industry

1. Be aggressive in adapting new technologies in businesses
2. Quickly respond to changes in e-commerce
3. Be quick to exploit any opportunities in e-commerce as this would provide first-mover benefits
4. Avoid online review manipulation so as to maintain credibility
5. Be more aggressive in social media marketing to reach more customers and keep them engaged
6. Adapt more features of augmented reality on its app as this would give customers better experience
7. Always focus on the needs of customers and remain innovative to better meet these needs

6.3 Implications for future research

Although this study has attained its aim, a major limitation related to the adopted data collection method: a questionnaire was not able to collect detailed information to adeptly answer the research questions. Therefore, future research could use more elaborative methods such as case and document analysis to better understand how e-commerce has evolved over the last five years and understand the role of Amazon in these changes. In addition, future research should collect more detailed information using methods such as interviews or focus group discussions so as to answer the research questions in a more elaborate way. Further, a longitudinal approach to the research would have helped the study to better map the changes in e-commerce over the research period and therefore future research should adopt the longitudinal time horizon. The second limitation of the study is generalizability of the study findings: the study focuses on one electronic retailer (Amazon) and therefore the findings cannot be generalised to all firms in the UK electronic retail industry. In addition, Amazon is a pioneer and a dominant player in the UK electronic retail industry and therefore the findings of this study could not apply to other e-players in UK owing to their market share. Therefore, future research should consider more e-players especially those with small market share and explore how they are affected or affect the evolution of e-commerce.

Take a deeper dive into Global business environment: a case study on Sainsbury’s with our additional resources.

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