Examine the influence of digital technology, particularly e‑commerce platforms, on the market environment for traditional retail businesses in India. Provide at least two strategic responses that retailers can adopt to remain competitive.
Answer
Digital technology expands the market reach, changes consumer buying behaviour, and increases competition; retailers can (a) adopt omnichannel strategies that integrate online and offline sales, and (b) leverage data analytics to personalise marketing and optimize inventory management.
Step-by-step solution
- Step 1: Describe how e‑commerce platforms broaden consumer reach beyond local markets.
- Step 2: Explain changes in consumer behaviour such as preference for online shopping and quick delivery.
- Step 3: Identify the resulting intensification of competition and pressure on pricing.
- Step 4: Propose response (a) an omnichannel strategy to blend online and physical stores.
- Step 5: Propose response (b) use data analytics for personalised marketing and inventory optimisation.
Common mistake: Neglecting the role of consumer data and omnichannel integration
Concept tested: Digital tech impact on market environment
Published · How this solution was prepared and checked
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