E-commerce - Cape Peninsula University of Technology

Chapter 5: Recommendations and conclusion Page 71
argue that satisfied customer will remain loyal despite alternative product and
service offers from competitors (Neil, 2002, Brown, 2000, Zikmund, McLeod
and Gilbert, 2003, Graham, 2001 and Van der Wait, 1997). Having loyal
customers suggest that companies can reduce operating costs; get extra
business from referrals (have lower customer-acquisition costs). It can also
lead to increased product penetration; high profit due to initial absorption of
costs and premium pricing opportunities. While these factor amount to real e­
retail benefit, they also have limitations in terms of appropriate strategies that
can meet set objectives. This study shows how limited small retailers are in
terms of resources needed to deliver successful retail business operation.
It is argued in chapter two that the reduced product prices and improved
service quality is an incentive that attract customers. Retaining these
customers requires up-to-date product and service information delivered
timely on retail website. The reliance on high quality product and service by
customers are accompanied by expectations of high level satisfaction that
come with such products (Neil, 2002. Graham, 2001 and Brown, 2000).
E-retailing is a formidable tool that is used to keep in touch with customers
more frequently at a cost-effective rate. It is also a management strategy that
can be used by the retailers to keep their customers in check at all times.
Cost saving are realised by managing old customer more than seeking new
market and new market opportunity with Internet (Neil, 2002: 19). The lack of
understanding of customers need and taste can impede the development of
appropriate strategy and improvement in the retail business operation
becomes a costly exercise. This is why the researcher employs the survey
method to understand the unique challenges facing e-retailers, study the
strength and analyse these against the opportunities of e-retailing.