Design/methodology/approach – A coding guide was developed to obtain information available on 28 fair trade web sites and 28 commercial web sites focusing on company information, product information, distribution channels, customer service, and web site structure/media service. Findings Results revealed several evidences that fair trade organizations presented limited information online, compared with commercial organizations.
Research limitations/implications – Fewer commercial retailers benchmarks in the study sold handicrafts, compared with fair trade organizations. Discrepancies in the proportion of products carried by each organization may exult in limited generalization of the findings across product categories. Practical implications – Through benchmarking against profit-making business leaders, fair trade organizations would be able to evaluate strengths and weaknesses for their current online business operations and explore opportunities and improvement in web site management.
Originality/value This paper provides valuable managerial implications for fair trade organizations focusing on web site operations. Information availability and strategic web site management can attract customers to make purchases on air trade web sites and, in turn, enable organizations to sustain and grow in the competitive marketplace.
Keywords Electronic commerce, Fair trade, Management strategy, Benchmarking paper type Research paper Fair trade organizations (Foot) are alternative trade businesses that engage in socially responsible practices in developing countries such as paying fair wages in the local context, providing healthy and safe working conditions, being environment-friendly, offering technical training and education for workers, and contributing to local and community development (International Federation for Alternative Trade, 2003).
Foot work directly with producers and artisans in developing countries and help them earn and maintain sustainable income from selling apparel, textiles, crafts, and grocery products. Foot currently operate traditional retail channels, mail-order catalogs, and/or internet stores to market products (Fair Trade Federation, 2005). The main business goal for Foot is to provide a source of income for the manufacturers and artisans in the developing countries, unlike traditional commercial businesses whose main aim is to maximize organizational profits (Benjamin and
Journal of Fashion Marketing and Management Volvo. 10 No. 4, 2006 up. 491-507 q Emerald Group Publishing Limited 1361-2026 DOI 10. 1108/13612020610702009 JEFF 10,4 492 Freedman, 1989: Brown, 1993). According to the Fair Trade Trends Report (Fair Trade Federation, 2003), sales in the fair trade market place increased from $183 million to $251 million with 37 percent growth rate during 2002, whereas the conventional businesses experienced sales decline (Strops, 2003).
The press reported that consumers have been interested in socially responsible or ethical businesses and supportive for such businesses. Thus, sausages in the advertisements and promotions that articulate how the organizations engage in socially responsible practices have been attractive to these socially responsible consumers (Emblem, 1993; Greenfield, 1991; McCormick and Elevations, 1993).
With a growing awareness of fair trade and socially responsible businesses among consumers and industry professionals, there has been a strong need for Foot to work toward understanding their customers, investigating customer interests, and satisfying customer expectations with a good quality of merchandise in order to develop and/or retain sufficient market demand ND in turn, support producers and artisans in developing countries. According to Kim et al. (1 999), customers who shopped from Foot were likely to be socially responsible and seek unique styles with rich embellishment on apparel. Sat research in Foot also showed that those who purchased apparel products from Foot perceived similar product and service quality as they did from conventional retailers (Abraham-Murals and Literal, 1995; Dickson and Literal, 1997). However, it is ambiguous whether Foot have satisfied customers’ diverse product and service needs. For this reason, some ajar Foot such as Pueblo to People failed to sustain in the competitive market and finally went out of business in 1997 (Literal and Dickson, 1999) In the last few years, apparel specialty retailers have achieved greater success via the online channel.
The main reason for the success of online retailing was because it provided the consumers with a safe and comfortable shopping atmosphere (Love, 2004). Thus, one way to provide better value and services for consumers who shop from Foot may be an extension or integration of diverse selling channels. Integration of an online channel and traditional retail Hansel can provide numerous benefits to customers: time saving, comparison shopping, easy and convenient access to the Store, etc.
A recent research showed that about 54 percent of fair trade consumers made general product purchases online, which was considerably higher than 39 percent of US consumers on the national average (ANTI, 2004). In addition, over 72 percent of fair trade consumers used the internet for information search or communications, which also was higher than 66 percent of US consumers on the national average (Literal et al. , 2004). An online retail channel and its integration with the existing retail channel may provide great strength for Foot to compete with commercial retail businesses.
Although the consumers of Foot have a stronger tendency toward buying online (Literal et al. , 2004), it was observed that most Foot have recently begun operating their online selling channels, and suffer from a lack of knowledge in web management proficiency to compete with mainstream commercial online retailers. Hence, there is a scope for improvement in order for them to remain competitive in the market. Several business leaders have achieved superior marketing reference levels through benchmarking.
Benchmarking is a technique through which businesses constantly compare and measure their performances with outstanding performers. Benchmarking provides competitive advantages to businesses (Boone and Kurt, 1999). Therefore, this study was designed to provide competitive e-tailing strategies for Foot using a benchmarking approach. The benchmarking will guide Foot constantly to compare and measure their performance with outstanding performers, achieve the best business outcomes, and in turn, advantage producers and artisans in developing countries.
Based on the literature (e. G. Park and Stole, 2002), we integrated the following classification of information load on the web site that can influence customer shopping experiences and purchase decisions in the specific context of Foot: company information, product information, distribution channels, customer service, and web site quality. Conceptual background Company information Building trust and loyalty has been one of the major e-tailing emphases (Lee, 2002; Liana and Alai, 2002; Liebermann and Stashes, 2002; McKnight et al. , 2002; Such and Han, 2002).
Several people are not willing to shop online due to a lack of trust in online businesses (Hoffman et al. 1999). Consumers often feel more comfortable with buying from the web sites that are well-known and sell familiar brand names (Brand, 2001 Park and Stole (2005) found that company or brand familiarity affected online purchase decisions. Those who browsed well-known web sites perceived less risk of purchasing products and exhibited greater purchase intentions on the web site, as compared to those who browsed unfamiliar web sites.
One way to build a reputation or trust is to provide detailed company information or mission statement online that may be helpful to judge product and service quality and in turn, increase nonuser confidence in decision making (e. G. Park and Stole, 2005; Toe, 2002). Public release on company profiles, mission statements, or history on the web site often enable organizations to communicate with customers, employees, and investors and promote company establishment, objectives, accomplishments, and commitment to the community and society (Bart and Abate, 1998; German and Cooper, 1990).
Consumers tend to trust a business when mission statements or company profiles are clearly presented online. In particular, mission statements are even more important for Foot that are social-driven and ethical (Bart, 2001 reduce information A number of researchers (e. G. Easel, 1984; Davis, 1987; Engel et al. , 1978) have found that consumers search for product information to examine and compare with alternatives in their decision-making process. In the information search process, shoppers tend to associate a set of information cues (e. G. Rice, country of origin, care instructions) with product quality (Cox, 1967). Park and Stole (2002) suggested that sensory and experiential product information such as fabric construction and fabric hand may be important for judging product quality on the web site. Similarly, Griffin and O’Neal (1992) found that when shopping for clothing information on fiber content, fabric hand, and price were significantly considered to judge product quality. Product dimensions and weights are other vital product descriptions for handicrafts (Tamil et al. 2003). When customers cannot experience a product directly, absence Of product information may often result in greater amount of perceived risk due to unpredictable consequences and uncertainties about product quality (Simpson and Lanker, 1993). Previous research has shown that lack of information about apparel products (e. . How fashionable a new product is, if the product is a good gift for someone) could 493 JP-MM 494 perceived risk, and, in turn, decrease purchase intention (Simpson and Lanker, 1993).
Therefore, product information has been found to be an important attribute when making purchase decisions for apparel and textile products (e. G. Smallwood and Wiener, 1987). The more information an e-taller can provide on the web site, the more interested a consumer would be in making a purchase. Rich and sensory- oriented product information on the web site can substitute tactile experiences (e. . Touching, feeling) for apparel purchase (Park and Stole, 2002).
Because touching and feeling are the important decisive factors for purchasing apparel and textile products, absence of such experiences need to be compensated with a realistic presentation of products being offered online. Visual display functions such as enlargement, product appearance on a body form, and multiple product views can positively influence purchase decisions (Then and Delano, 1999). In particular, a three-dimensional view Of the product can create positive moods, reduce perceived risk, and in turn, increase purchase intention from the web site (Park et al. , 2005).
Customer service information Several studies have showed the importance of customer service in e- shopping. Then and Delano (1999) found that internet shoppers tended to examine carefully the information about security, return policies, and multiple ways to contact the customer service department, when purchasing apparel from the internet. According to Bruising/Goldberg Research, 75 percent of the internet shoppers considered credit-card security as one of the important purchase decision criteria (Chain Store Age, 1999). Toe (2002) mound that shoppers avoided buying on the internet due to security concerns.
Information on buying, return, and exchange policies can increase confidence in purchase decisions (Weber and Rowel, 1999). When easy return policies and money back guarantee are available, consumers are likely to perceive less frustrations for making an online transaction without actually touching and feeling a product. Such information details may enhance the credibility of the seller (Constantine, 2004). In fact, Constantine (2004) reported that a complicated and unclear ordering process for online transactions was a major season for loss of sales for online retailers.
Because direct communications and interactions with a customer service representative who handles all purchase and product-related inquiries including returns and security of transactions can Increase confidence in purchase decisions and reduce perceived risk, contact information may be used as a important decision making tool for shoppers (Then and Delano, 1999). In addition, information on “frequently asked questions” can help shoppers efficiently handle the inquiries alone on the web site even without making direct contacts with sales representatives (Toe, 2002).
Information regarding estimation of shipping and handling period and merchandise availability may be useful to predict timing for receipt of merchandise and consumption. Because fashion products are very time sensitive, they may require immediate consumption and gratification after purchase (Spoolers, 1981). However, immediate gratification of a purchased product is delayed when buying online due to shipping and handling in the distribution. Knowing exactly when the product will arrive helps reduce false expectations.
Consumers also can plan and presume a product use as well as consumption time (Meyer, 2001 Before completing he entire order process by including product selection and transaction, internet shoppers can be informed of merchandise availability (e. G. Quantities available, merchandise in stock or back ordered) (Park and Stole, 2002). Distribution channels Multi-channel retailing is an innovative distribution strategy that several retailers currently implement to serve a market in an effective manner.
Through multi-channel integrations, retailers sell their products through different shopping mediums such as retail stores, catalogs, internet, wireless channels, and television shopping programs (Stone et al. , 2002). According to Clark (1 997), the click and mortar firms sell their products through both online and offline channels (e. G. Target, Wall-Mart, Gap), whereas some firms operate the online selling site as well as their traditional print catalogs. Others may integrate catalogs, online, and offline selling channels simultaneously (e. . Lands’ End, Crew etc. ). Retailers who sought a traditional single distribution channel approach with only a brick and mortar store or a catalog- only operation began to operate the interactive multiple stores using the internet for several benefits (Haddock, 2000). Multinational retailers such as he Gap and Nikkei who employed the internet selling channel as well as a traditional retail channel had twice as many shoppers on their web sites, as compared to those who only operated a single internet channel (Aaron, 1999).
In addition, multi;channel retailers spent less for marketing and web site management for advertising their online presence, as compared to multi- channel retailers. Multi-channel retailers also spent less on advertising and promotion for their online presence, but still gained a larger market share than the internet-based retailers (Gaffe, 2000). According to Literal et al. 2004), fair trade customers may look for new and unique shopping experiences and are likely to be interested in using the internet technology.
Fair trade customers tend to seek new and unique shopping experiences (Ray, 1997; Ray and Anderson, 2000). This indicated that fair trade consumers may look for multiple shopping alternatives to enhance shopping experience. Web site structure and media service Web site appearance, structure, and maintenance can influence consumer shopping experience, transaction process, and service evaluation (e. G. Kim et al. , 2003). Manning et al. (1998) found that 50 percent of the internet hoppers left the web site when product search was difficult.
Zoon Research Inc. (2000) also reported that poor web site quality resulted in a loss of sales because shoppers did not complete the transaction process. According to Kim et al. (2003), search engine and product Category index could facilitate the shopping process more efficiently and enable shoppers to obtain the relevant information immediately. When the products on a web site are organized under distinguished categories in a systematic manner, shopping ease or efficiency can be increased (Batty and Lee, 1995).
The interesting media eaters such as links to special events and games can evoke a positive revisit intention to the web site. Method Sample Our main interest was to compare the information available online between Foot and successful commercial retailers (Cars) who sell apparel, accessories, textile products, or handicrafts and provide strategic web site managerial implications for F TOSS. We first 495 JUMP 496 searched fair trade web sites via search engines on the Fair Trade Federation (vow. vow. Predetermination. Com) and the International Fair Trade Association (www. Fat. Org). We finally obtained a total of 28 fair trade web sites that sold t least one product category among apparel, accessories, textile products, and handicrafts online. A total of 28 successful commercial web sites who sold apparel or textile products online were selected from the top 300 retail web sites published by Internet Retailer (2004). In order to achieve statistical power, the equal number of web sites from two types of businesses (fair trade business vs. commercial retail business) was loaded for comparative analysis (Aaron and Aaron, 1 997) (see Table l).
Instrument A coding guide was developed to obtain information available on the fair read web sites based on five information classifications developed in this study: (1) company information; (2) product information; (3) distribution channels; (4) customer service; and (5) web site structure and media service. The same coding guide was applied to both Foot and Cars. Product categories being sold (e. G. , apparel, textile, and handicrafts) and business classifications (e. G. Epically store, department store, and mass merchandiser) were included in the coding guide to identify the nature of the business (Burns and Bryant, 2001 Based on the literature (e. G. Lee, 2002), three items of company information (company profile, the number of years that the company has served a market, company mission) were developed by researchers. To obtain product and customer service information, a coding instrument developed by Park and Stole (2002) was modified and expanded to meet the needs of our study.
A total of 20 items (e. G. Fiber content, product quality, suggested retail price, availability of personalization) were included to assess the availability of product information. For customer service information, 18 items such as shipping and handling charges, return policies, and customer loyalty programs were assessed. Then and Delano (1999) found that customers tended to seek information for alternative shopping channels such as catalogs or retail stores when they shop on the internet.