Development Of An E Commerce Website For A Brick And Mortar Business

3946 words - 16 pages

Table of Contents
Abstract …………………………………………………………………………………………………………………………….…. 2
Brief company background ………………………………………………………………………………………………….. 2
Discussion of business problem ……………………………………………………………………………………………. 3
The cost of brick and mortar ………………………………………………………………………………………………… 4
High level solution ………………………………………………………………………………………………….……………. 7
Benefits of solving the problem ……………………………………………………………………………….…………… 8
Business/technical approach ………………………………………………………………………………………….…….. 8
Business process changes …………………………………………………………………………………………………….. 11
Technology or business practices used to augment the solution ………………………………………….. 11
Conclusions and overall recommendations ...view middle of the document...

The company offers athletic shoes, apparel and accessories, as well as a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, snowboarding and roller sports. It also provides various private label merchandise, including apparel, camping equipment, climbing, fishing supplies and snowsport equipment. The company also sells merchandise under licensed trademarks, such as Avet, Body Glove, GoFit, Hi-Tec, Maui & Sons, Morrow, Oakley and Weider. As of June 30, 2013, it had 16 stores in 3 states: California, Arizona and Nevada; and 1 80,000 sq ft warehouse in California. Troy’s employs 720 personnel under the Troy’s Sporting Goods name. Troy’s Sporting Goods Corporation was founded in 2005 and is headquartered in San Diego, California.
Discussion of Business Problem
In such a competitive, global marketplace, maintaining a strong e-commerce website and marketing strategy is paramount to success. Research firm Forrester estimates that “e-commerce spending in the United States will hit approximately $262 billion this year, up 13.4% from $231 billion last year” and “in 2017, online spending will reach $370 billion, which represents a nearly 10% compound annual growth rate from 2012” (Rueter, 2013). Further research indicates that “in 2017, U.S. e-commerce will account for 10% of all U.S. retail sales, Forrester says. That compares with 8% in both 2012 and 2013” (Rueter, 2013).
As a company in its infancy, Troy’s Sporting Goods is faced with two options for future expansion: (1) Continue opening brick and mortar stores in strategic areas at significant cost, each with a finite geographic impact; or (2) Implement an e-commerce solution with a significant upfront investment that minimizes the building of brick and mortar stores, yet globalizes the stores reach.
Troy’s present-day website is used primarily to help promote the business and advertise product lines and promotions. There is currently no viable method for conducting business over the internet with either consumers or suppliers.
The Cost of Brick and Mortar
For comparison purposes let’s briefly examine the pros and cons of opening 3 additional brick and mortar stores following Troy’s Sporting Goods current strategic growth plan. The below three graphics extracted from loopnet.com represent targeted expansion areas and the average costs of retail space for purchase in each respective city (LoopNet, 2013).
Retail Property Asking Price Index - Sale Trends


Table 1 below, is a very simplified summation of approximate costs per year to open a 50,000 sq. ft. retail space in each of the cities surrounding metro areas. When Troy’s Sporting Goods considers the purchase and build out of the store, merchandise/equipment, staffing, and maintenance, the median cost per store (averaged over 30 years) is approximately $1.7 Million per year. This number represents a “ballpark” figure for our analysis.
Huntington Beach, CA...

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