Developments in technology have revolutionized the conduct of business activities. Information and communication technology (ICT) has led to the advancement of systems that allow buyers and organizations to effectively business transactions. Moreover, financial technology (FinTech) has made it easier for buyers to pay for the products purchased over online platforms. E-commerce involves conducting business activities on online platforms like Facebook, among others. As human society is moving to a more advanced technological period, the business sector is one of the greatest beneficiaries. Social media platforms allow retailers to market their products and arrange further business transactions with remote customers. Although online platforms provide a broad potential consumer base, e-retailers must adopt mechanisms such as customer loyalty programs, discounts, and exclusive deals.
E-Commerce
Business activities over online platforms were precipitated by the invention of the internet and payment cards. During the internet’s infancy, people shied away from purchasing items online since it was associated with fraudulent activities (Rabby et al., 2022). However, the improvements in online payment have encouraged the promotion of e-commerce activities. Moreover, the increased technology integration among companies facilitates online business. Although natural pandemics like the COVID-19 are untimely, their impact on e-commerce activities cannot be ignored. The strict governmental regulations during the COVID-19 encouraged the adoption of remote business transactions over the internet (Alsharef et al., 2021). E-commerce is a multifaceted concept that different factors have influenced. Many businesses, including retailers, have adopted e-commerce to enhance product and service delivery. Therefore, using the internet to carry out business activities is significant since it enhances a broader consumer reach.
Advantages and Disadvantages of E-Commerce
Traditional business activities presented disadvantages that e-commerce intervened. Conventionally, businesses spent much time on business transactions and customer retention. However, the integration of e-commerce in business activities was advantageous to companies. E-commerce, coupled with the increased internet use, has allowed firms to reach a broad consumer base (Tolstoy et al., 2022). Social media platforms enable marketing teams to communicate effectively with existing and potential clients. The online platforms utilize FinTech, allowing multiple efficient payment methods for buyers and sellers. Automated responses and bots speed up communication between companies and their clients (Caiza et al., 2021). ICT has advanced marketing activities, including consumer research making it easy for the companies to produce quality products and services. Therefore, ICT integration among business activities is crucial for any firm to stay afloat.
Although ICT has revolutionized business activities, it is associated with several setbacks that scare consumers and companies away. The initial installation and maintenance costs can be expensive since every business has unique needs (Tolstoy et al., 2022). Consequently, small retailers opt to use social media platforms that are freely available. The social media platforms may fail to meet specific company needs. Moreover, the use of FinTech has been subject to fraud, among other cyber crimes (Tolstoy et al., 2022). The public shies away from using the internet purchase methods and instead visits the physical stores (Alsharef et al., 2021). Additionally, it is difficult for the buyers to quality check the products before purchase, and some businesses may reject the returned goods. While technology is significant for any business, it is substantial to consider its detriments.
Online Retailers
The internet platforms have become a shared marketplace for many companies and buyers. Online or electronic retailers sell goods and services online (Tolstoy et al., 2022). The e-retailing includes business-to-business and business-to-consumer transactions. Companies tailor business models and utilize internet sales through various activities. The online retailers build out distribution channels like warehouses, websites, and product shipping centers for logistical purposes. The distribution channels are significant for e-retailers since they provide avenues for moving products or services to consumers (Tolstoy et al., 2022). Common online retailers are Amazon.com, Alibaba Group, and Zappos. Although online retailers attract millions of customers globally, they are associated with problems that may scare away clients. Therefore, e-retailers adopt effective mechanisms that help them retain their customers.
Drawing Repeat Clients to Online Retailers
Adoption of referral programs is significant in retaining and identifying new clients. The programs allow the existing customers to recommend products or services to their close family members and friends (Laudon & Traver, 2018). Using the referral programs is more likely to attract loyal customers than the sponsored product promotions. The current customers are incentivized through the programs upon recommending the products or services to their close network. Word-of-mouth (WOM), as utilized through the referral programs, is significant in the retention and acquisition of new clients (Alsharef et al., 2021). WOM influences every step of consumers’ journey and helps them better understand the company and its products. Moreover, the use of WOM is relevant to sales touch points. The utilization of referral programs draws repeat clients since it enhances a sense of brand loyalty among the customers.
Very Important Persons (VIP) Programs
Loyal customers need the motivation to continue purchasing products and services. The VIP programs offer exclusive offers to loyal customers, giving them more reasons to continue spending on the company’s products (Laudon & Traver, 2018). The programs are only designed for top-tier customers. For instance, the customers who have significantly contributed to the firm’s products or service value through repeat purchases deserve the VIP programs (Ho Lee & Jung, 2018). The customers gain high social status with the brand and feel special. Consequently, the benefitting customers continue to purchase the products or services and may refer the company to other potential buyers. The few selected customers enjoy better prices and rewards through the VIP programs, making them significant brand advocates.
Exclusive Discounts for All Customers
While the VIP programs target a few customers who make significant purchases, exclusive deals for all customers help retain clients. The exclusive deals for all customers involve percentage discounts for specific products or goods. The deals can be conditional or unconditional and benefit all customers regardless of their value to a company (Laudon & Traver, 2018). Dependent exclusive deals may require the customers to purchase specific goods or perform some actions. Meanwhile, unconditional discounts can be utilized when the business clears its sales. The introduction of new products that are discounted can be attractive to the customers (Laudon & Traver, 2018). Treating customers as equals promotes a sense of belonging (Rabby et al., 2022). Consequently, the existing customers are turned into loyal clients who make frequent purchases. Therefore, exclusive discounts for all customers encourage them to make repeat purchases that are beneficial to the company.
Personalized Campaigns
A cordial relationship between the business and clients is crucial in retaining the customers. While different mechanisms can be employed in building a business relationship, personalized campaigns are the most effective. The movements involve reaching out to the consumers at individual levels (Laudon & Traver, 2018). For instance, using email adverts and direct calls to clients can significantly boost consumer loyalty. While social media platforms and other public campaigns reach a broad consumer base, personalizing the information makes the clients more convinced about the products. Through customized campaigns, the clients air out their problems and ideas on how the businesses can solve them (Laudon & Traver, 2018). Consequently, the clients and the online retailers develop personal touch that is significant for building loyalty. The personalized campaigns, in turn, help the businesses retain existing customers.
Exclusive Deals to Social Media Buyers
Online retailers have different platforms from which the clients can purchase their products and services. For instance, online retailers allow the purchase of products on their customized e-commerce websites or through downloadable mobile applications (Ho Lee & Jung, 2018). The unique company’s platforms may attract fewer clients since they may be complex to control. Moreover, some mobile applications may take time to download and create a customer profile. However, the social media platforms; Facebook, Twitter, Instagram, and TikTok, among others, have many users who may purchase the product online (Laudon & Traver, 2018). Therefore, using social media makes it easy for companies to attract and retain customers (Laudon & Traver, 2018). Although technology has revolutionized e-retailing, social media attracts more clients.
Quality Products and Services
Although loyalty programs and personalized campaigns are significant in retaining customers for online retailers, improving services or product quality is equally essential (Tolstoy et al., 2022). Many retailers compete with others over a similar consumer population. Therefore, clients purchase products or services from retailers of high quality. Reputable suppliers who produce effective services and products help online retailers maintain and grow a broad consumer base (Alsharef et al., 2021). The retailers can involve their clients in marketing research and seek feedback on product or service quality. The suppliers can use the feedback to improve and develop new products that meet unique consumer needs. The e-retailers source products and services from distinguished suppliers whose quality is high to retain their customers.
New Product or Service Introduction
New product or service development is significant among e-retailers. While the new products offer an opportunity to attract more customers, the companies consider their effectiveness. Consequently, the products or services introduced help in meeting the market deficiency. Loyal customers are prioritized when distributing the new products or services that are inadequate (Laudon & Traver, 2018). Therefore, the customers develop loyalty towards the company and take part in promoting the new products. Moreover, consumer-based brand equity is greatly enhanced by meeting the unique consumer needs through new products or service development (Laudon & Traver, 2018). Introducing products that are unique and meet consumer needs helps online retailers maintain their broad client base.
Challenges Faced by the Online Retailers in Drawing Repeat Buyers
All online retailers compete for the same consumer base and may devise competitive mechanisms. The big competing retailers may adopt more advanced and complicated technologies than those adopted by small retailers (Woods et al., 2022). Moreover, giant e-retailers like Amazon and eBay have established reputation that works to the detriment of the small and growing retailers. Consequently, the manufacturers prioritize the big retailers, making it difficult for small retailers to access quality products. Furthermore, many manufacturers sell their products to consumers directly without the retailer’s intervention. Therefore, the small e-retailers find it challenging to attract customers who can make repeat purchases.
Technology Failure
The effectiveness of the technology employed depends on the retailers’ financial capacity to maintain and develop a new one. Consequently, online retailers with insufficient funds may experience system failures that disrupt the buying process (Laudon & Traver, 2018). Since technology is the human brain’s work, it is subject to manipulation: hacking and other forms of cybercrimes target e-commerce platforms. The buyers and the retailers may fall victim to the crimes increasing mistrust and customer withdrawals from the online retailers. Therefore, consumers may prefer physical transaction to digitized for their personal safety. Moreover, the some e-retailers platforms are subject to sabotage by ill competitors. Less advanced technology and the systems’ vulnerability can lead to the loss of customers by online retailers.
Change in Consumer Needs
Consumer needs and behaviors are dynamic and change according to the prevailing circumstances. Therefore, there is little reassurance in retaining consumers over a long period. Moreover, online retailers depend on suppliers whose sustenance may decline due to decreased product consumption levels (Laudon & Traver, 2018). Prevailing economic hurdles may cause the consumers to prefer basic needs over luxury. Furthermore, development of new and higher quality products encourages the consumers to shift from one retailer to another.Therefore, the retailers selling luxurious products may lose their loyal customers. While retaining the consumers is possible, their conditions and behaviors are unpredictable, making it difficult for the retailers to remain sustainable.
Possible Solutions to the Identified Challenges
Online retailers can adopt various solutions to overcome the identified challenges. Firstly, to crush the stiff competition, the business can adopt a business model that exhausts all the available social media platforms. For instance, a retailer using Instagram, Facebook, Twitter, and TikTok to sell products or services attracts more clients than those depending on the company’s e-commerce websites only. Moreover, unlike the giant e-retailers, small retailers can specialize their products or services with which the customers can identify. Although stiff competition is inevitable exhausting, all the social media platforms and product or service specialization can help the small retailers become sustainable.
Secondly, technology failure can be avoided by using ready-developed e-commerce platforms. The platforms can be purchased online from system developers, or the small retailers can utilize venues like Facebook Market Place. Using already developed software will relieve the retailers of the burden of routine system maintenance. The retailers can conduct regular surveys to track customer preferences and challenges. Consequently, the business can change its products or services according to demand in the market. Finally, dealing with dynamic consumer needs and behaviors requires a well-planned organizational structure.
Conclusion
Developments in business technology have led to the advancement of e-retailing. While the online platforms are significant for businesses to reach many clients, adopting effective strategies will allow them to retain their customers. Online retailers depend on manufacturers who supply them with goods for sale. Since the online market is highly competitive, retailers adopt loyalty programs, personalized campaigns, and exclusive customer deals to retain customers and convert them into repeat buyers. However, stiff competition, technological failure, and changes in consumer needs and behaviors encumber consumer retention. The retailers can exhaust social media platforms, acquire third-party software, and develop an effective business model to overcome the challenges.
References
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