Consumers’ ability to go online to search for and purchase products has dramatically changed the way organizations are managing customer relationships. E-commerce has effectively minimized two of the biggest hurdles to providing a quality experience in a retailing environment. First, it has minimized “heterogeneity” by providing a far more consistent experience to every customer. Unlike a service employee, a Web site never arrives late to work, and it is never in a bad mood or inattentive. A Web site never forgets to sell related products or keep records of previous purchases along with customers’ purchase preferences. (Though e-commerce has reduced some of the heterogeneity in retail experiences, it has not eradicated it. Web sites can lose server connections and experience technical problems that can have a negative impact on customers.) E-commerce has also reduced “perishability” in the retail experience by allowing shopping and product purchases 24 hours a day, seven days a week. With so many customers who consider themselves to be “time starved,”1 online organizations are now allowing the customer to decide when a transaction will occur.
E-commerce clearly has some advantages over brick-and-mortar retailing, but how does one online retailer distinguish itself from another? Early research in e-commerce projected that online retailing would spiral into a never-ending price war, while recent researchers have discovered that customers are more likely to... To read the complete article, login or sign-up using the form below.
Subscribe today to read this article, or Buy a PDF.
More Info.
Buy this article. Purchase one or more copies of this article as a PDF.
Subscribe today to read the most recent articles and the current issue of MIT Sloan Management Review.
Already registered or subscribed? Login below.
Current Subscribers: Do you subscribe to MIT Sloan Management Review? Register for online access.
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription—access to the entire archive of articles.
