what are the theories and implications related to internet shopping
re-patronage behaviour and customer loyalty?
- e-commerce related
- customer behaviour 
- store selection and shopping behaviour
- Online shopping behaviour
- Patronage preference and behaviour/Retail management

Greetings –
  
Thanks for your question.  
  
Online shopping is steadily growing -- in virtually every industry.
eMarketer has predicted that the number of people, age 14 and over,
who have purchased something online, will grow from 64.1 million in
2000 to over 100 million in the coming year.  So more and more people
are online, but how many are revisiting the same web sites to do
repeat shopping? According to E-Commerce News, Priceline said it added
a record 1.5 million new customers during the quarter, bringing the
total to 5.3 million. Amazon has reported that repeat customers
represented more than 66 percent of its orders.  Between 50-55%
percent of CDNow’s retail revenue come from repeat customers.  
Clearly, repeat customers account for a growing portion of online
sales of the major web firms, and these same customers are typically
spending more each time they buy online. Profitability of repeat
customers is significantly greater than that of new customers due to
the costs to attract new ones, as research shows. As a result,
companies are increasingly looking at ways to retain customers.
  
So what are these companies doing to accomplish this?  What are they
employing to keep customers coming back? One of the newest trends
emerging is Relationship Marketing, which is a means of focusing on
building relationships with consumers.  The theory of this approach
entails the customization of programs and promotions for individual
consumer groups.  Promotions can include direct incentives to be a
repeat buyer. For example, a company could include a “welcome kit",
which might have an incentive to make a second purchase.  If X
customer hasn’t made a purchase in Y number of days, the company would
follow up with an e-mailed discount offer. This personalized marketing
affords companies greater chance in seeing a customer’s repeat
business, by developing the customers’ sense of familiarity. Companies
are also using things like “web analytics” to retain customers.  The
Marketforce online marketing analytics platform from Coremetrics, used
by Wal-Mart, Columbia House and other companies, is essentially a data
depot that captures data from Web pages about browsing and buying
behavior.  By tracking every single click customers make on every
single session, companies can see things like those products which
customers look at, but don’t buy, and the reasons behind lags in their
becoming customers in the first place.
  
But not all companies are employing these tactics to keep customers. 
In fact, a new study of 50 leading ecommerce sites conducted by
Rubric, Inc. — a provider of emarketing applications — found that most
e-commerce sites are failing to effectively market to their own
customers.  A good number of companies are still employing impersonal
marketing on the Internet, which is typically thought to be an
interactive, personal medium.  Only 16 percent of the ecommerce sites
studied sent a follow-up marketing offers to their newest customers.
Of these, only two were personalized. 47 percent failed to ask
customers if they would like additional information on similar
products and services.
  
Physical [brick-and-mortar] retail outlets share the same requirements
with web-based firms in building the bond of familiarity, but a key
difference in physical shopping vs. cyber shopping is in the area of
error margin.  A study by Boston Consulting Group clearly indicates
that web retailers only have one chance to get it right.  One bad
experience and a customer just may not return. Physical retail stores
can sometimes get away with bad service repeatedly without losing a
customer.  Of the 12,000 people surveyed, 28 percent of all attempted
online purchases failed, and four out of five consumers who made
purchases online experienced at least one failed purchase attempt over
the same period.  Difficulties in finding products, logistical and
delivery problems after the sale contributed to this.  In most cases,
a customer never gets to meet who he or she is transacting with
through the web, so a sense of trust is not there until satisfactorily
proven by the company.  So if something goes wrong, the customer may
not feel he/she has the same level of recourse.  The same customer
going into a physical store has a much greater level of implicit trust
because he or she sees the company physically, interacts with the
store clerks, and has a physical place to return to if something goes
wrong.
  
  
Sources:
  
Study Shows Ecommerce Sites Need Refinement to Retain Customers
Personalization is the Key by Seth Fineberg
Channelseven.com
http://www.channelseven.com/adinsight/surveys_research/1999features/surv_19990706.shtml
  
Online Shoppers to Increase Average Spending to $1,089 in 2002
Association for Interactive Marketing
http://www.interactivehq.org/news/research/
  
Vendors boost Web analytics  by Heather Harreld  (5/5/02)
Info World
http://www.infoworld.com/articles/hn/xml/02/05/05/020505hnanalytics.xml
  
Keep Your Customers Coming Back - Again and Again by Nach Maravilla
Publisher
PowerHomeBiz.com
http://www.powerhomebiz.com/vol71/comingback.htm
  
E-tailers: Only One Chance to Survive  by Martin Lindstrom (4/13/00)
Clickz.com
http://www.clickz.com/brand/brand_mkt/article.php/823101
  
Empirix Rates Online Flower Retailers During Mother's Day Rush 
RealMarket
http://www.realmarket.com/news/empirix072502.html
  
THE NET EFFECT ON RESEARCH
How Can Marketing Researchers Effectively Utilize the Web? By Cara
Parks (11/15/00)
Information Technology Research Paper
http://216.239.51.100/search?q=cache:v3fbFLrn5noC:www.student.richmond.edu/2001/cparks/public_html/IT_Project/IT_Paper.doc+online+%22return+customers%22+%22study+shows%22&hl=en&ie=UTF-8
   
Additional Links:
   
Encourage repeat customers by updating your site frequently
Satori
satoridesign.com/resources/articles/frequentupd.html
  
How to create repeat web site business
Ward's Dealer Business
wdb.wardsauto.com/ar/auto_create_repeat_web
  
Can CRM win and retain loyal, repeat customers?
Infoworld
www.infoworld.com/articles/tc/ xml/01/04/16/010416tcpcp.xml
  
 
Search Strategy:
   
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web "theory +is" "repeat customers"
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If you need any additional information/clarification, please ask
before rating this answer.
 
Thank you,
 
jbf777-ga
GA Researcher

Hi cloudust-ga ,

I was working on the question at one point and gathered some links
that may be helpful in addition to the excellent answer above... which
by the way I think deserves an 5 star rating :-)

Here they are:
Establishing Customer Relationships on the Internet Requires More Than
Technology
http://www.marketing.unsw.edu.au/AMJ/V10_1/Barnes_Cumby.pdf
This study was published in 2002, but is based on data from 1999 and
2000 - ancient history in terms of ecommerce - but the conclusions are
still valid.

"Customers must be made to feel that the online interaction resembles
a personal
interaction. Companies must design into their Internet strategies
aspects that will encourage the development of long-lasting closer
customer relationships, characterised by high levels of emotional
content. The challenge for companies migrating to the Internet is to
preserve the relationship with customers that they have enjoyed in the
offline setting, while achieving the benefits associated with dealing
with customers online."

Trust and Consumers in B2C eCommerce
http://www.deakin.edu.au/mis/research/Working_Papers_2002/2002_05_Corbitt.pdf
"Trust is a critical factor for consumers’ patronage behaviour.
Successful ecommerce web sites are those which could invoke consumers’
trust and lower consumers’ risk perception through marketing
activities and technology improvements. ...Therefore, the importance
of both marketing orientation and technical trustworthiness in
relation to trust on the web is vital."

A report from the Bristol Group at http://www.affininet.com/news.html,
available for download at
http://www.affininet.com/downloads/web_e-business.pdf,
stresses the need to meet customers emotional needs –  not just
provide efficient and cost effective transactions. There will always
be another site that provides a quicker, cheaper product – building
relationships is necessary for online profitability.
“Retailers must give their online customers emotive reasons to stay
with them–understand their needs and  demonstrate that understanding,
provide flexibility and personalization of the online experience, be
responsive when problems arise or questions are asked, provide the
human touch when appropriate, and so on. The sum of the online
experience must be greater than its functional parts.”

Customer Loyalty Key to E-Commerce Profitability 
http://cyberatlas.internet.com/markets/retailing/article/0,1323,6061_331431,00.html
repeats this theme.
"Delighting customers is the clear determinant of e-business success
or failure. Online shoppers want their lives to be made simpler - with
the offline world as their benchmark," said Chris Zook, Head of Bain &
Company's E-Commerce Practice. "For the most part, their needs are
fairly simple: good secure service, fair pricing and timely
fulfillment. The few companies that succeed in these areas have
significant competitive advantages over their competitors and a
business model that, in the long run, is best positioned for long-term
success."

Ten E-Marketing Ideas for Building Customers Online
http://www.clickz.com/tech/lead_edge/article.php/835081
“E-marketers need to understand that building customers online means
understanding what customers want.”

Online Auto Shoppers Tough to Target
http://www.ecrmguide.com/news/article/0,,10382_978781,00.html
has an alternate viewpoint. Based on research on car buying patterns,
Forrester discovered that loyalty was not related to purchases on car
dealership’s sites. This stresses that behavior can be related to the
product.
What Do Online Shoppers Want?
http://www.clickz.com/tech/lead_edge/article.php/833091
In the end, sites that concentrate on the basics of customer focus,
relevance, support, service, fulfillment, and function are the ones
that are going to win... not the ones that try to fight the megamalls.

How Brand Influences Online Buying
http://www.clickz.com/tech/lead_edge/article.php/837121
“People want good prices, to be sure. (Though we can't forget to add
shipping to the mix: Forrester reported in January 2000 that the cost
of shipping is a major part of the decision-making process for 82
percent of online shoppers.) But they also want information on
products and some sort of basis for comparing products before buying.”
This article is loaded with good links to other resources.


Keeping Customers Through Care
http://www.cyberdialogue.com/library/pdfs/pharma_exec.pdf 
“Intelligent” customer care addresses all customer touch points and
becomes possible through a set of linked, integrated, and aggregated
data channels that help marketers target defined customer segments.
Integrated, intelligent customer care programs can go a long way
toward optimizing product use and profits over time. Rudimentary
initiatives, such as mass-marketed compliance programs, do not succeed
through “brute force” alone. Intelligent customer care requires an
integrated offering of programs, content, services, and
personalization, driven by value segmentation.


http://www.cms.livjm.ac.uk/research/snc/Ch1_form.pdf
is a very long discussion of the use of neuralnetworks to predict and
classify behavior. Skip to the end of the paper for good definitions
of "Factors underlying online shopping behaviour" in section 1.4.2.

Search terms used: e commerce internet shopping patronage behavior
customer loyalty

Thanks for the interesting search!

Regards,
bcguide-ga