E-commerce - Cape Peninsula University of Technology

Chapter 2: Literature review Page 6
Both local and international e-retail businesses may find beneficial ways to
use e-commerce to enhance positive relationships with their customers and
suppliers to ensure customer loyalty (Whysall, 2000).
2.2 E-RETAILlNG AND CUSTOMER LOYALTV
In e-retailing, because a company website represents the brand and stands
as a substitute for the traditional shop, customer loyalty depends, even in the
first instance, on the website's performance. Judgement about performance
will be based on its usefulness and more specifically on its impact on service
quality, during and after purchase. The interrelationships among loyalty,
trust, and relationship have been well established in marketing and service
management literature (Berry, 1995; Berry and Parasuraman, 1991; Foster
and Cadogan, 2000; Graham, 1999; Kandampully, 1997).
Customer loyalty is essential for all businesses, especially for e-commerce
ventures that seek to strengthen their brand image (Barton, 1999). Building
customer loyalty is vital to the success of the e-retailer because, without loyal
customers, even the most effective business model will fail, and the business
will eventually try to satisfy the whims of only price-sensitive customers
(Reichheld & Schefter, 2000). Reichheld and Schefter further explain that
attracting and retaining a larger number of customers requires e-retailers to
remain devotedly customer centric, as e-customers continue to demand more
from their Internet experiences and have many more opportunities to migrate
to other sources of supply, based upon easily available price comparison
information.
A few years ago Gosh (1998) predicted that competitive pressures of new
electronic markets in improving customer loyalty, and meeting up with
customers' demand would force businesses to join the market, irrespective of
their willingness to do so. The question is no longer whether to deploy the