To what extent is online retailing essential to a firm’s success?

On the one hand, online retailing is essential to a firm’s success, as seen by Amazon’s rise to being one of the world’s largest businesses. Online retailing often reduces a business’ costs, as there is less need for traditional bricks-and-mortar stores. This is significant because these stores have high fixed costs (overheads); whereas, an online warehouse can be located out of town and not as many are required. This means that a business, like Amazon, can provide products at a cheaper price, undercutting the high-street. On the other hand, it is not ‘essential’ for retailers to have an online presence because many successful retailers exist on a high-street only business model. For example, Primark- the fast fashion outlet. These retailers argue customers are more inclined to purchase a greater number of products because they pick up items as they walk around the store. This means that customers purchase more items than they perhaps would have done online and therefore for a low margin business like Primark this will lead to increased revenues. A market mapping exercise may be beneficial in order to determine competition in the market and whether there is a gap to fill.In conclusion, it is not ‘essential’ for a business to have an online presence because many successful businesses exist without selling online. However, I would argue it is ‘beneficial’ to a business because a business is able to sell to a number of geographies without the cost of stores. Nevertheless, it depends on the types of products being sold for example buying a £2 t-shirt online may not be worthwhile after postage is included.