Online customers expectations and motivations

In the UK, over 50% of Internet users had shopped online by the end of 2004 and this is a trend predicted to continue to grow in terms of numbers of consumers and the amount they spend (Allegra, 2005). However, it has been suggested that too many companies are failing to realise the potential of this new digital trading environment and are tending to adopt defensive strategies, taking the lead from their nearest competitors as to what the organisation should be offering online rather than capitalising on the potential provided by digital channels (Allegra, 2005). E-retailers should aim to understand how customer expectations have been raised. Key areas where customers have high expectations of online retailers are the following:

• Logistics - the critical link between consumer-based Internet ordering and the delivery of the product to the consumer is often referred to as the final or last mile. The last mile, including product transportation, is frequently considered the most important element of the order fulfilment process, i.e. 89% of online shoppers rate on-time delivery high in importance and 85% of buyers who receive their order on time would shop at the Internet merchant again. Thus, delivery-related issues have been shown to have a high level of importance to online shoppers (Esper et al., 2003).

• Security and privacy of information - customers now expect that if they are prepared to provide detailed personal and financial information it will be stored securely.

Figure 10.1 Thinking of buying a book? Examples of online book retailers

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Figure 10.1 Thinking of buying a book? Examples of online book retailers

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• Timeliness - the speed of digital communications has raised customer expectations in terms of response times and they expect a speedy shopping experience. It is no longer acceptable to take three or four days to respond to an online customer enquiry; an online customer expects the response will be instantaneous or at least within a couple of hours. Additionally, they expect to be able to order goods and services at any time.

• Availability - the Internet creates a sales environment, which is not restricted by space constraints, therefore there is an increased expectation that not only will there be a wider range of goods for sale online but also the goods will be readily available for immediate delivery.

• Convenience - it should be easier and quicker to compare prices online; there should be easy access to a wide range of retailers without the inconvenience of having to travel to a number of different locations.

• Customer service - customer value is the foremost driver of competitive advantage in the Internet shopping environment and customer service can be measured by the consumer in terms of price savings, service excellence, time savings and experiential values such as entertainment, visual stimulation/reward, levels of interaction. Positive response to such factors can lead to heightened loyalty (Lee and Overby, 2004).

The increase in customer expectations can have quite wide-reaching organisational implications. The gap between customer expectations of the online offer and the actual performance can have a significant impact on online performance. Mini Case Study 10.2 explores the relationship between experiences and online success. Following your reading of this case study, you can go on to try Activity 10.2.

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