Digital business models have become a big disruption in the retail industry. With the emergence of advanced technologies and increased social media use, e-marketing seems to be the new norm. This is due to digitalization across the globe that has brought the emergence of giant digital firms like Amazon, Alibaba, and Spotify. However, it has led to the closure of some stores that were not able to adopt the new technology. Therefore, business practitioners need to understand how to deal with emerging issues in the digital market space.
To thrive well, companies need to understand the impact of digital business on the firm and how they influence consumer behavior. Such will help those entering the digital market to strategize themselves by allocating resources and countering competition from companies that have gained monopolistic advantage across various parts of the world. After venturing into the digital space, companies need to know how they are going to increase consumer reach while still driving value for both the consumers and the stakeholders. Such is due to the numerous challenges that come with online trading.
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Trust is a significant challenge when it comes to online trading. Consumers opt to buy goods from a known online brand since they are guaranteed to get original and quality products. However, the new industry players are required to invest in a brand focused model strongly. Logistics is also a challenge to most online stores, including giant firms. The last-mile delivery cost is so high given that goods are shipped across the globe, proving to be very expensive for low-value goods. Coming up with a favorable logistic model will drive the profit margin. Also, discouraging returns will cut the cost of delivery. Moreover, firms need to conduct analysis to gain critical insights for market capitalization and optimization by leveraging big data, machine learning, and artificial intelligence.
In conclusion, firms cannot ignore the retailing market's digital transformation if they want to remain relevant in the industry. Therefore, researchers and key industry players need to research this blind spot that is wildly disrupting the market, yet little is known about its potential. Hence, this makes this article of significance as it provides an overview of the digital business model’s significance.
