Development of e-commerce within fast moving consumer goods

University essay from KTH/Fastigheter och byggande; KTH/Fastigheter och byggande

Abstract: Today, we can observe a shift in consumer behavior where more products are being consumed online. For food or so called fast moving consumer goods it has taken longer to start this transition than for other industries such as books and electronics but now it is on the rise and it has been an overall increase of 30 to 37 % in the last couple of years. A continuous increase in e-commerce will most likely lead to major changes in the real estate industry as the retail industry will not be in need of physical stores to the same way as they are used today. In line with these structural changes new business models will be created that strikes out old ones.  The aim of this report is to account for the development of e-commerce within fast moving consumer goods (FMCG) and to evaluate the business models of the main traditional retailers. By comparing how retailer’s business models meet the underlying theory of consumers purchasing behavior online, the purpose is to explain what retailers will be successful in the future. To fulfil the aim of the report an examination has been made of relevant theories such as the theory of planned behavior and its key factors essential to run a successful business model for online retailing within FMCG. Apart from the theory of planned behavior, the business model of IKEA that has been proven to be successful, is used as a reference model. The research is restricted to two of our four main retailers in Sweden for food which is ICA and Bergendahls (City Gross). To answer the research questions a qualitative method has been used in the thesis by performing two case studies on ICA respectively Bergendahls with the collection of primary data in form of interviews, which have been complemented with secondary data. By comparing the business models of ICA and Bergendahls with the theoretical models and the reference object IKEA the purpose is to determine if they will be successful online or not. The key to having a successful business model and online platform is to focus mainly on the wired lifestyle and the customers attitude towards it, which is the most important factor affecting the consumers’ intention towards buying food online. Freshness and novelty are the second and third most important factors affecting the consumers’ intention towards buying food online and therefore shall these factors be the retailers next focus area. In order to pin point what is important for their business and to be able to focus on the right factors for being successful and gaining market shares the retailers should have a separate model for e-commerce.

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