What is the effect of a retailer's investment in its online presence on its sales at...
What is the effect of a retailer's investment in its online presence on its sales at brick-and-mortar outlet sales? Consider the retailer's constrained resources.
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Answer-
The effect of a retailer's investment in its online presence on its sales at brick-and-mortar outlet sales predominantly decreases the brick and mortar sales.
The overall sales may remain same or increase due to online presence as some customers prefer online shopping . There will be a cannibalization effect in which the online sales will eat the share of brick and mortar outlet sales. There will be some goods that the customer might want to shop physically and get the feel of it before purchasing.
The online sales have certain discounts that will reduce the profits. The online sales will increase the sales in the long run but to sustain the competition from other online sellers there will be discounts on goods that are sold. There will be increase in sales but at the cost of reduced margins.
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to collect sales taxes for online sales if the chain had a physical
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