Loyalty in e-Tailing

Abstract

Internet retailers that attempt to establish a steady customer base by offering the lowest price are not basing their expectations on firm ground. An alternative to low-price strategies is to develop and maintain a loyal customer base. In this paper, we present a framework for developing loyalty via the Internet. Internet strategies should be developed based upon the firm's competencies and an analysis of the current loyal customer base. The components of the Internet exchange-such as site content, design, navigation and interactivity-are linked to convenience and risk perceptions. These in turn affect the satisfaction/loyalty and performance. Continuous evaluation of customers' perceptions of value determines the adjustments that need to be made to the existing retention activities. The benefits of Internet loyalty are discussed, along with directions for future research.