1: Literature Review
1.1 Introduction to e-Business
New approaches to business sought through use of the Internet and its continuous updated technologies are dynamically being deployed by organisations to appropriate innovative value creation online (Chaffey, 2009). Information technology has been noted for its value creation, defined as “drivers of product differentiation” (Amit and Zott, 2001) in business, as it supports alternative marketing strategies. More specifically, the current state of the Internet as a communication platform, with its powerful and far reaching influence and lack of constraints to time nor place (Deighton, 1997), has had a profound affect on both culture and business practice throughout recent years (Giovannetti, Kagami and Tsuji, 2003). This factor of potential emergent influence poses the opportunity for retailers to utilise the tools of the Internet to create and build strategic value within the communicative functional area of marketing.
1.1.1 Relevance of e-Marketing and e-CRM
Research (Keynote, 2012) indicates that new Internet distribution channels are encouraging consumers to shop online in a more convenient alternative to stores by offering faster delivery and simpler returns services. With the dynamic increase in growth of online fashion stores (Keynote, 2012), the proposition for fashion retailers to carefully consider their e-marketing and online customer relationship management (commonly termed ‘e-CRM’) strategies are crucial if they strive to sync their brand value on the High Street with their stature online. Additionally, value creation on the Internet can go beyond the value that can be realized through its configuration online (Porter, 1985). Not only does it have the potential of generating tremendous new wealth (Amit and Zott, 2001), if applied effectively by retailers, utilising online functional communication tools for marketing and customer relationship management can transcend the amount that consumers are willing to pay by exceeding the strength of the brand (Chaffey, 2009).
1.1.2 Prosumption as a Marketing Tool
Relationships within the value chain are considered to be central to the creation of competitive advantage and the generation of unique propositions regarding customer value (Morath, 2000; Kleindl, 2001). Researchers (Ritzer and Jurgenson, 2010) argue that the social forces of change brought on from the Human Computer Interface and more recently, the Internet and Web 2.0 technologies can be seen as a crucial development in the means of prosumption, defined as the production within capitalist society focusing on both production and consumption (Ritzer, 2009), making a central proposition for retailers to gain control over these sites and utilise them to their advantage. Herein lays the proposition of relationship building and customer relationship management through user generated content for retailers wishing to differentiate within the volatile fashion retail sector.
1.1.3 Web 2.0 Facilitating Prosumption and Value Creation
With the evolution of Web 2.0, the Internet is witnessing a trend towards user-generated content (UGC): an innovative and widely adopted online approach where participation, not publishing, is the key discourse (Beck, 2008; O’Reilly, 2005). Brennan and Schafer (2010) explain that Web 2.0 technologies have created interactive communities where users can communicate, share, blog and create content in real time. Furthermore, Van Zyl (2009) explains that the technologies of Web 2.0 increase fluidity of Internet interactions and co-operations, heightening the possibility for group interaction regardless of time and place. MORE BUSINESS VALUE CREATION. EG. BRANDING TOOL. CUSTOMER RETENTION. The potential of these characteristics appears to be gradually realised by retail organisations and although adoption is still in a somewhat rudimentary stage, incentives for fashion retailers to adopt the Web 2.0...
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