The hidden value of sporadic customers in e-retailing - an empirical investigation

Abstract

Purpose - To analyze empirically the transaction profitability derived from sporadic and frequent customers in the e-retailing sector of minor home appliances in Brazil. Design/methodology/approach - A company's database was analyzed quantitatively to assess the transaction profitability derived from sporadic and frequent customers purchasing via the firm's digital channel, namely its web site. Besides, qualitative evidence was also collected from interviews with the main professionals involved in marketing and e-commerce in the firm and through analysis of the company's web site and e-mail communications with customers. Findings - The commercial transaction profitability associated with sporadic customers can be higher than that derived from frequent purchasers. Research limitations/implications - The study concentrated on a single company within a specific industry (minor home appliance e-retailing) based in a specific country, namely Brazil. Practical implications - The benefits of web consumer retention would only seem to be advantageous for digital companies that are client-centric, which can interact with these consumers. Furthermore, the mere fact of using transactional practices, low differentiation between products and the emphasis on promotion of price on the web would seem to increase sensitivity to price on the part of the consumers, particularly those who make purchases more frequently. Originality/value - To enable practitioners and academics to grasp fully the real value of frequent and sporadic clients, in order to allow digital companies to develop coherent strategies for them.