Six Sustainable Steps for E-retailer Businesses

Developing successful online businesses is important for entrepreneurs, investors, and industry stakeholders. A multitude online businesses fail to reach a sustainable level for comfort-zone and growth-oriented companies. Research by Ashworth, et. al. (2013) helps in understanding how a six-stage approach describes the development of e-retailers and differentiates those that are successful from those that are not. 

It should first be understood the differences between comfort-owned businesses and growth-oriented business.  Comfort businesses are developed around the needs of the owner while growth-oriented businesses seek to maximize revenue. The two are fundamentally different businesses based upon the personalities and goals of the founders. 

A comfort-business may never reach full maturity as it is focused as a lifestyle or personal income generating of the owner. We may find an example in a boutique clothing store started by a person who enjoys fashion, a small garage that focuses on car customization, or a fish & tackle shop oriented around the owner’s love for fishing. The owner and his or her lifestyle take precedence in business decisions and an intensive business was never the goal. 

A growth-oriented business is designed to reach maximum growth potential through adding product lines, improving business services, and seeking additional opportunities for revenue.  Some of these businesses are run by serial-entrepreneurs that continuously add businesses and products to reach financial milestones. The strategy and design of the business are expansion driving.

Stages are used to describe how typical e-retailers develop and reach a sustainable level. Online businesses should not try and race ahead of their natural development to ensure they are fulfilling proper platform building that creates stability. Likewise, they should not become stagnant in their development or be confined to comfort-business models that are subject to the lifetime of the owner.

The stages of development for e-retailing businesses are:

Stage 1-E-retail Launch: The launch of the business, inclusion of high demand lines, and organizational learning to meet immediate needs. 

Stage 2-Competence and Development: The website is improved, functionality and control are matched and search engines begin to crawl the site.

Stage 3-Market Development and Value Integration: Customer feedback, creative adjustments, customization, improved product reach, and market development.

Stage 4-Integration Intensification:  Intensified strategic planning that enhances internal operations and external relationships.

Stage 5-Experience Leveraging: Using gained experience to create add-ons, improve customer service, and fine tune the business.

Stage 6-Sustainability: The maintenance of multiple revenue streams, regular business adjustments, and maximum sustainable performance.

Ashworth, C. (2012). Marketing and organizational development in e-SMEs: understanding survival and sustainability in growth-oriented and comfort-zone pure-play enterprises in the fashion retail industry. International Entrepreneurship and Management Journal, 8 (2).

Developing E-Loyalty through Websites

Websites are a major source of commerce and revenue in today’s business world. Business without websites suffer loses of potential revenue and fewer market share prospects. It isn't only those without websites that are losing but also those who have poorly designed websites that suffer from a lack of loyalty. Developing e-loyalty can reduce lost customer revenue and increase customer satisfaction drawing more revenue into the future.

All websites should be well designed and planned out. Designing entails, “the process of creating an artifact with structure of form which is planned, artistic, coherent, purposeful and useful “(Cato, 2001). When the website is designed well it will be both aesthetically appealing to the customer as well as provide two way communication features that develop solid relationships (Ramani & Kumar, 2008).

Customers should be able to enjoy the experience of engaging with the company on their website, have their interests maintained, and be able to find what they are looking for with relative ease. It is this functionality and customer focus that helps foster higher levels of sales. Strong e-commerce starts at the very beginning.

When customers can find what they are looking for quickly without having to search around a long time their satisfaction rises and their loyalty is likely to be maintained. Few things are more frustrating than having to search and look for simple purchases. As website design improves so does its overall utility and ease of use.

Research conducted by (Roushdy, 2013) uses 32 items to test communication functions, transactional functions, relational functions, e-satisfaction, e-trust, involvement, switching costs and e-loyalty.  The test population included 695 responses of customers who purchased hotel rooms directly from five star hotel websites in Naama Bay, Sharm El Sheikh over the course of six months.

Findings:

-The most influential dimensions affecting e-loyalty was in the following order of importance which included transitional function, relational function and communicational function.

-Transactional function was related to website design, complexity of transactions, convenience, and website security.

-Relationship was found between e-relationship quality made up of e-trust and e-satisfaction which influences e-loyalty.

-The perception of the e-relationship and e-loyalty were high when the cost of switching between companies was perceived to be low.

-E-relationship quality and e-loyalty were most associated.

Business Application:

Loyalty was associated with the ease of transactions, the relationship with the website and the communication functions. It is important for customers to find what they are looking for easily, feel connected to the website, and be able to communicate with the company when necessary. Having this level of interactivity helps raise the transparency perception of the organization and the impression of the company as concerned with the customer beyond quick sales. When customers could invest little energy to switch between websites but felt that the relationship with the company was positive and loyal organizations know they have a strong customer base.

Organizations often try and make a quick sale but fail to realize that long-term sales require a level of openness and contact with customers. Websites, as outward facing tools, are becoming even more popular in today’s world as a sales mechanism. Website designers must concern themselves with the ease of finding products, the ease of “checking out” with products, and the ease of customers finding help.

Cato, J. (2001), User-Centered Web Design. Pearson Education, London.

Ramani, G. and Kumar, V. (2008). Interaction orientation and firm performance. Journal of Marketing, 72 (1)

Roushdy, A. (2013). The effect of e-relationship quality on e-loyalty: an empirical study on the hotel industry in Egypt. The Business Review, Cambridge, 21 (1).