Exploring Customer Loyalty for eCommerce Startups- eLoyalty

Consumers just want to buy a book, not necessarily from a particular website!

It would be a cliché to say that India’s ecommerce industry is cluttered! We have innumerable websites selling clothes, ornaments, accessories, et al. We also have a plethora of niche websites that sell everything from women innerwear to jackfruits! Talking about the ‘general’ ecommerce websites, the ones that sell everything from books to mobiles online, we realize that we know a lot of names, and buy from a variety of such portals. But, are we loyal to any in particular? I doubt.

A recent interview of Carlos Olmos, group director, Eurasia, Coca Cola revealed that India is the first country within the Eurasia and Africa region where the world’s largest carbonated drinks maker, the Coca-Cola Co., has launched a study on “Understanding Shopper Loyalty Within Different Retail Formats”. Mr Carlos, while speaking on the sidelines of the Confederation of Indian Industry marketing summit 2012 on Monday, said Coca-Cola plans to implement the key findings of this study in India. He accentuated upon a major finding that, “Consumers just want a cold drink, not necessarily Coca-Cola.”

Drawing a parallel between the outcome of the study for Coca Cola, and the state of the ecommerce industry from India, the finding are starkling. When a consumer comes online to purchase, say books, he initially goes to the leading website selling books and orders via the now legendary COD (Cash On Delivery) method, smiles, and waits for the book to arrive. Old story. Now days, the consumer has become smarter. He has realized that in the end he has to buy a book, it does not matter from where. So he logs on to the various price comparison websites, finds out the site that sells it for the cheapest price, and orders from it. This is type of consumer behavior has belittled speculators and has left a load of work on the firms to put in more efforts to build a brand, a name that can become the ultimate “online kiranawala” or the “online Crossword”.

Creating customer loyalty is very important. But, how can a ecommerce company go about doing that? It doesn’t have a product of its own. All ecommerce companies sell, but none have indigenous products, to build a brand around. There have been multiple researches carried out on the same lines and one such report was published in the Journal of Economic and Social Research. The paper is titled: "Customer Loyalty in e-commerce: an exploration of its antecedents and consequences."

The report lays down some fundamental issues that can be looked upon. The research put forward the 8 C's that appeared to impact e-loyalty:

1. Customization: It isthe ability of an e-retailer to tailor products, services, and the transactional environment to individual customers. As noted by Schrage,customization offers great potential for e-retailers as “the web has clearly entered the phase where its value proposition is as contingent upon its abilities to permit customization as it is upon the variety of content it offers.”
2. Contact Interactivity: Contact interactivity refers to the dynamic nature of the engagement that occurs between an e-retailer and its customers through its web site. Several researchers have highlighted the significance of interactivity to customer loyalty in electronic commerce.
3. Cultivation: Cultivation is the extent to which an e-retailer provides relevant information and incentives to its customers in order to extend the breath and depth of their purchases over time.
4. Care: Care refers to the attention that an e-retailer pays to all the pre- and post-purchase customer interface activities designed to facilitate both immediate transactions and long term customer relationships. Customer care is reflected in both the attention that the e-retailer pays to detail in order to ensure that there is no breakdown in service, and the concern that it shows in promptly resolving any breakdowns that do occur.
5. Community: A virtual community can be described as an online social entity comprised of existing and potential customers that is organized and maintained by an e-retailer to facilitate the exchange of opinions and information regarding offered products and services.
6. Choice: Compared with a conventional retailer, an e-retailer is typically able to offer a wider range of product categories and a greater variety of products within any given category.
7. Convenience: Convenience refers to the extent to which a customer feels that the web site is simple, intuitive, and user friendly. Accessibility of information and simplicity of the transaction processes are important antecedents to the successful completion of transactions. The quality of the website is particularly important because, for e-retailers, it represents the central, or even the only interface with the marketplace
8. Character: Creative website design can help an e-retailer build a positive reputation and characterization for itself in the minds of consumers.

Some very important points, taking care about all these points would make your eCommerce site more sticky and you'll get what you want: "Customer Loyalty".

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- Shyamal Dave with inputs from Jubin Mehta