The rise of e-commerce and online
retail has altered the general trends in the ‘U.S. Supermarket and Grocery Store
industry’ and the position of brick and mortar giants is now under siege. How will
traditional brick and mortar stores fare in this current scenario and are they
transforming themselves to compete? This paper will shed light on the current
and potential challenges that this industry is poised with, whilst
simultaneously adopting a conventional approach in analyzing key ethical
aspects surrounding public policies that can be shaped by this industry. Obviously
and intuitively, it relates to the evolution of traditional brick and mortar
retail into dynamic multi-functional digital platforms. The primary focus lies
in the consumer's shift in paradigm and the manner in which e-commerce giants
such as Amazon are craft fully influencing this change. The likes of Amazon
have the power to create favorable perceptions - Their logistics, services and
prices are nearly unmatched and got them into this influential position in the
first place. But now, they are almost capable of leading consumers into
believing that there actually isn't any conceivable reason for them to visit
stores anymore. It is quite similar to the Apple approach - Don't follow the
trend, create it. However,
in this case we are talking about the effective extinction of the physical
storefront through engineered processes by e-commerce giants to even overcome
storage and delivery issues with perishable food products. This paper will simulate
a plausible world one decade from now, wherein physical stores are on the verge
of functional obsolescence and now mere boutiques, sculpted towards individual
experiences. Virtual stores have evolved along with technological developments
in requisite logistics to the extent that they thrive solely and most retailers
have either embraced this change or folded. It will also explore the potential
challenges that the industry may face in advancing towards this probable
reality with regard to legal issues and implications that may arise.1
The emergence of online
grocery retail in the future can easily be plagued with several issues ranging
from food sourcing and inspection to quality concerns and tampering. With the
advancement of sophisticated grocery delivery models, similar to the now
defunct Web-Van system2, by giant online retailers, there will be a
lot of speculation and suspicion about the food products in question. One of
the most pressing worries may relate to the fact that consumers will be unable
to manually inspect the food items before purchase, nor will they be able to accurately
gauge whether the items they receive are in fact the same ones they ordered
online. Consequently, one might expect federal agencies governing U.S food law
to implement regulations for containing such issues. This in turn will spur a
significant degree of non-market action, more prominently in the form of
lobbying, by industry leaders whose businesses will suffer as a result of these
new laws. It is quite tenable to anticipate a public backlash against such non
market activity as well. However, as stated earlier, the profound economic
prowess and influential stature of these pioneering titans of the industry will
be difficult to combat. Under such circumstances, they may even leverage their superlative
brand to meander public perception in their favor as observed so often in the
past. But on the other hand, traditional retailers who would then be former
behemoths of the industry, will work to rally support in the direction that
would benefit them. As this is a vital turning point that could potentially
revolutionize the food retail industry, with several critical interests
involved, the notion of a highly likely battle for public opinion and legal
approval will provide tantalizing fodder for the media. This cumulative effect
might foster several other non-market issues in sequence of a viscous cycle.
Assuming the role of an
executive for an enterprise representing the new wave in U.S retail, the
following two mutually dependent strategies may be adopted in an effort to
insulate the firm from legal complications and resolve the issue in its favor,
whist simultaneously taking into consideration their ethical implications:
1.
It
will be absolutely paramount that all the major enterprises running the risk of
being negatively affected as an outcome of the new laws, temporarily put their
competitive rivalries on hold and unite in contention against opposing forces.
The pursuit of similar ambitions can help align expectations even amongst the
fiercest of rivals and forge the establishment of a united consortium of
industry leaders that can tackle the situation more effectively.
2.
Since
a lot rests on public opinion in this case, it is obvious that this newly
formed alliance must work towards winning them over. In a struggle for decisional
influence between this block and the traditional retailers and with the
government playing judge, it is not hard to foresee that the public is the only
significant neutral force capable of tilting the balance. In order to obtain
public support, it is important for the enterprises in question to ensure that
they seek the very best for their consumers and people, in general. To do so,
they cannot ignore the driving force behind consumer perception – The media.
Engaging in specialized public relations regarding this matter and candidly
communicating with the media will be the key to achieving this goal.
It is equally essential to maintain a high degree of transparency
while deploying this strategy as its fundamentals are based on trust, honesty
and duty. This is simply because people appreciate the truth, while the media
likes anything that viewers do. Assessing these approaches through a
utilitarian lens, we can infer that they would in fact generate the greatest
benefit for the most number of people if they uphold and protect the very
virtues that made them a public favorite in the first place. The rationale
behind this is that people had an open choice to select their preferred
retailer and they opted for the virtual retailers simply because they were
convenient, better and more efficient. Now if these very same retailers
continue to sincerely serve people’s needs and do what they know propelled them
to the top, they can be rest assured that their actions will be well received
universally. Moreover, by being transparent, people will also be aware of the
consequences of their support and thereby be vary of its negatives as well. Observing
these tactics from a deontological perspective, it is clearly evident that the
representative will fulfill his or her organizational duty and also avert any
repercussions that the firm would otherwise have to incur as a result of
dishonest informational disclosures or iniquitous vested interests.
End
Notes
1.
This
hypothesis has been formulated by me, for my Industry Analysis paper, geared
towards answering the questions below in relation to the U.S. Supermarket and
Grocery Store industry – I thought it might be intriguing to combine the two
approaches. (Please let me know if you would like to discuss the build up to
this hypothesis or prefer more information on the same)
- How has the
rise of online retail giants such as Amazon.com altered the general trends
in the industry?
- How do
traditional ‘brick and mortar stores’ fare in this current scenario and
are they transforming themselves to compete?
2. Introduction to Webvan - an online "credit and delivery" grocery business that went bankrupt in 2001:
http://en.wikipedia.org/wiki/Webvan
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