Digital Trading

GCSE Business & Communication Systems

Welcome to today’s Webinar!
This Webinar will begin at 9.30am

Date: 03 April 2020
Topic: Digital Trading

GCSE Business
Communication Systems

Unit 2 – The Business
Environment

Digital Trading

Recap - Stakeholders

• What is a stakeholder?
• Name the main stakeholders in a business/organisation?
• What are their interests?
• What does it mean if stakeholders are in conflict? Can you give an

example?

Learning Outcomes
Students should be able to:

At the end of this lesson students should be able to:

1. Define the term Digital Trading
2. Analyse and evaluate digital trading for a business –

advantages and disadvantages
3. Analyse and evaluate digital trading for the consumer –

advantages and disadvantages

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Digital Trading

• Digital trading refers to ordering,
buying, selling and paying for
products and services using the
internet (online)

• Also called e-business or e-
commerce

• It is the business of buying and
selling online

This can be with:
– customers
– other businesses

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Digital Trading

• Digital trading can be between a business and a consumer

– e.g if you buy something from on online supplier, you are the
consumer and the online supplier is the business

• This type of digital trading is B2C - business to consumer
• Digital trading may also take place between businesses

– It is the sale of goods or services between businesses via an online
sales portal..

• This type of trading is called B2B – business to business

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Think about this!

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Images © thinkstockphotos.co.uk

To sell online, you need a website!

• If companies want to trade online it will be very important to
have a good website – only the best will survive!

• Working in groups, you are to evaluate the website of a well-
known retailer under a set of given criteria and report back to
the class

• 10 minutes to evaluate and report findings.

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Websites to evaluate: • www.childrensalon.com
• www.farfetch.com
• www.ikea.com • https://www.homebargains.co.
• www.amazon.co.uk
• www.newlook.com uk/
• www.hollisterco.com • https://www.superdry.com/
• www.primark.com
• www.hm.com Images © thinkstockphotos.co.uk
• www.ebay.co.uk
• www.jdsports.co.uk
• www.jigsaw-online.com

Digital Trading – advantages/disadvantages

• Digital Trading opens up opportunities for business and
consumers throughout the world

• There are both advantages and disadvantages to e-business for
both businesses and consumers

• In the next section we are going to look at the
advantages/disadvantages of digital trading for both the
business and the consumer

Images © thinkstockphotos.co.uk

Mindmap Activity

Advantages and
Disadvantages of Digital

Trading to Businesses

Group Activity using MS Teams
Whiteboard and/or Padlet

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Mindmap Activity

• Divide into two groups – nominate a leader and a reporter
• One group is to come up with as many advantages as they can

think of, of digital trading/e-business for a business
• The other group will look at potential disadvantages of digital

trading for a business
• On completion, the reporter of each group will report findings

back to the class using
• You have 10 minutes to complete your task!

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Advantages of Digital Trading to a Business

1. Opens access to a global market
2. An effective website will give the business a professional

image
3. Supports international business opportunities
4. Increased sales due to a larger market and the fact that

people can trade digitally 24/7/365
5. Always open for business!
6. Reduced costs as some businesses may no longer need a

high-street shop to sell from

7. Reduced marketing and advertising costs
8. Less sales personnel needed – lower wages bill

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Advantages of Digital Trading to a Business

8. Website information can be updated quicker than business
documents, such as catalogues – just need to update the webpage!

9. Instant Communication and allows the business to become better
known – (wider audience)

10. Upfront payment as goods must be paid for at point of purchase
11. Transactions can be processed very quickly
12. Orders are stored on computer – easy to process repeat orders and

keep track of consumer habits
13. The business can also buy and use products and services from a range

of international sources not previously available to them

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Disadvantages of Digital Trading to a Business

1. Increases the level of competition faced by the business

2. Website optimisation – it will be necessary to spend money to
promote a website so that it doesn’t get lost in ‘cyberspace’

3. Initial set-up costs can be expensive – website and efficient electronic
systems are essential

4. Ongoing costs associated with the design, maintenance and updating
of the website

5. New staff with expertise in this area may need to be appointed or
existing staff retrained – all of which adds to costs

6. Efficient packing and delivery systems must be in place

7. New legal obligations to put in place when online-trading

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Disadvantages of Digital Trading to a Business

8. Not suitable for all products – e.g. perishable goods; very expensive
items such as jewelry – people like to touch them and try them on first.

9. Technical difficulties can lead to a poor corporate image
10. Security concerns can be a problem, especially when dealing with

people’s money or personal details
11. Third-party payment providers will charge for their services, e.g.

PayPal
12. The business must be aware of different cultures of customers
13. The business must understand different legal requirements in their

own country and other countries

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Mindmap Activity

Advantages and
disadvantages of
digital trading to

Consumers

Group Activity using MS Teams
Whiteboard and/or Padlet

Images © thinkstockphotos.co.uk

Mindmap Activity

• Divide into two breakout rooms/groups – nominate a leader
and a reporter

• One group is to come up with as many advantages as they can
think of, of digital trading/e-business for a Consumer

• The other group will look at potential disadvantages of digital
trading for a consumer

• On completion, the reporter of each group will report findings
back to the class

• You have 10 minutes to complete your task!

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Advantages of Digital Trading for
Customers

1. Can shop from the comfort of their own homes
2. Can shop at a time convenient to them – 24/7/365
3. Better choice of goods from many online retailers
4. Have their products delivered without the inconvenience of visiting a

shop
5. Can access important information, eg price comparison, online reviews,

product videos
6. Generally easy returns policy
7. Immediate transactions
8. Goods are generally cheaper as business expenses are reduced
9. Repeat orders are easy as your details are stored on the computer
10. Can communicate directly with the business via live chat or email
11. Information such as stock availability and prices is usually bang up-to-

date

Images © thinkstockphotos.co.uk

Disadvantages of Digital Trading for
Customers/Consumers

1. Lack of trust of payment system
2. Security issues and fear of personal information

being wrongly used by hackers
3. Need a debit or credit card to make a payment
4. Less reputable retailers may provide inaccurate

details online, e.g. stock levels/contact details
5. Not all customers may have access to a computer

or the Internet, or indeed have the necessary skills
to navigate it
6. Reliance on technology functioning properly

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Disadvantages of Digital Trading for
Customers/Consumer

6. Delay in receiving goods
7. Deliver charges may negate any savings on price made
8. Loss of social interaction – some people prefer personal contact

9. Inability to experience the product before purchase - Products may

appear different on the website, meaning goods will have to be
returned and postage costs paid – no guarantee of product quality
10. Information overload! Too many websites selling the same products at
different prices etc. Can be time-consuming
11. Placing the wrong order can be difficult to change – e.g. booking
flights!

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Pupil Activity

Working individually you have twenty
minutes to answer the following past paper
questions:
• 2019 Question 1(g)
• 2018 Question2
• 2016 Question 3e & f – do part f as a group

task based on evaluation of website activity
• 2011 Question 1f i
• 2012 Question 2e
• 2015 Question 1e

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Homework

• General 8 marker question on Digital Trading – Consumer
• Due Date: 20 November 2020

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Learning Check
Can you:

• define the term digital trading

• analyse and evaluate digital trading
for a business and customers;
(advantages and disadvantages)

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