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Research on consumer behaviour online.

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Consumer Loyalty In Online Retail

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Introduction

Consumers are considered as a most important part of any organization. It is quite essential for companies to motivate their workers in order to perform well. This is the best way through which they can provide high quality services to all their customers. Within the area of online retailing there are several factors which affect the buying decisions of customers such as visibility of website, price, quality of services, delivery etc (Torres and Kline, 2013). These are some of the most common ways which highly affects the loyalty of customers. Before several decades a retail store is the only shop from where consumers buy several products on daily basis. This is not the case anymore. Nowadays, people are highly attracted towards the online shopping as they can buy everything from here on a short time period. With having several positive factors there are some negative factors which highly affect the decisions of customers (Christodoulides and de, Chernatony, 2010). Each and every online retailer tries to attract customers through the best of marketing practices, by satisfying their needs and making the right product available for its customers. It also helps in making right product choice for their customers and motivating them to go through the making of appropriate purchase decision.

The present marketing research is based on the case study of Ocado Company which is British online supermarkets and has been voted as best online supermarkets of UK. The main aim of this study is to evaluate all those factors which affect the consumer loyalty within the online retailing segment which affects the customer loyalty. According to Heinonen (2010) being a loyal customer, consumer always expect quality services from company. Due to this factor, company should take several steps by which all their workers feels motivated and give advanced services to their customers.

TASK 1

1.1 Formulate and record possible research project outline specifications

Research topic:
To identify the factors that affects the customer loyalty in online retailing in the UK: Case study of Ocado

Research objectives

  • To identify the importance of consumer loyalty within the online retailing segment Ocado.
  • To evaluate the current trends prevailing in online retailing segment.
  • To analyse different factor that affects the consumer loyalty in Ocado.
  • To provide different recommendations in order to maintain consumer loyalty within the Ocado online retailing company.

Research Questions

  • What are the factors which affects the loyalty of customer within the online retailing segment?

1.2 Identify the factors that contribute to the process of research project selection

  • To increase subject knowledge in the area of consumer loyalty.
  • Personal interest in the topic.
  • Lack of researcher studies on consumer loyalty in Ocado.

1.3 Undertake a critical review of key references

This is the most important sections of any research under which researcher can fill all the prevailing gaps of existing literatures. Further, this section gives appropriate information about the consumer loyalty as well as factors which affects them.

Customer loyalty

It is considered as a most important concern in which companies need to maintain their service quality in order to maintain consumer loyalty. According to (Dick and Basu, 2004) customer loyalty is both attitudinal as well as behavioural tendency through which they can favour only one brand over all others. It is highly linked with the satisfaction with product as well as convenience, performance and familiarity and comfort. Loyalty is the only factor which encourages customers to shop more consistently and also feel positive about shopping experience. In this competitive environment it is becoming quite difficult for companies to develop several strategies through which they can attract more number of people. Hsin Chang and Wang (2011) stated that it is the result of consistently positive emotional experience as well as perceived value of an experience which includes the products and services. Liu, Guo and Lee (2011) in his article defines that retaining customer is quite difficult than acquiring new one. There is a consumer experience management which is the most cost effective way to drive customer satisfaction and customer retention. With the help of this company can gain higher competitive advantage as well as loyalty (Qureshi and et.al, 2009).

Importance of consumer loyalty within the online retailing segment

According to Bai, Law and Wen (2008) customer loyalty plays a critical role in an organizations success. It is also considered as a main objective for strategic marketing planning. It is the best way which secures the relationship between customers as well as services. Shoham and Makovec (2003) defines that loyalty occurs when a customer buy a product or service repeatedly. It clearly determines that there is a huge scope and source due to which customers are attracted towards a single company or source. Moreover, clients are loyal towards a brand based on their information on that brand. It defines that company needs to provide right as well as appropriate information to their customers.
Consumer loyalty towards the online retailing can be defined as a e-loyalty in other language. According to Dennis and et.al, (2009) it is favourable attitude and commitment towards the online retailer that results in repeat purchase behaviour. It is highly related with the attitude of customers towards an e-commerce website. Loyalty defines that they are always purchasing various products from a single website and do not switch to another website. It helps organizations in attaining higher competitive advantage by increasing their sales as well as revenues. Further, loyal consumers always spread favourable messages about the services of company and recommend new customers to the company.
It is being founded from past several studies that there is a huge importance of customer loyalty within the online retailing segment. Due to technological advancements as well as several other negative impacts of online services such as data theft, hacking etc. customers are not able to trust on these online services. According to Torres and Kline (2013) trust is the most critical success factor in successful service relationship. By developing appropriate relationship with customers company is able to expand their consumer base. At the time of acquiring new customers online, there is a lack of online consumer trust. It is also considered as a main barrier of customer participation in e-commerce.

Factors affecting customer Loyalty in Online Retail

In the modern era, concept of online retail has been increased up to high extent and companies are adopting this practice for boosting their competency. In this context, there are varied factors that affect the customer loyalty and hence same need to be considered by companies. In this regard, Santouridis and Trivellas, (2010) stated that core offering is one of the major factors which involves core and solid benefits that been attained to customers. Loyalty is not been boosted from card programs and lucrative schemes, but it is boosted from key benefits. Elements of core offering within online retail includes website appearance, navigation of web pages, display of required information, actual time span of delivery, option for payment and effectual after sales service. If these elements are missing within the context of online retail then loyalty also get hampered. Further, Kheng and et.al, (2010) commented that satisfaction is a key feature that leads to attainment of loyalty. A customer can be satisfied by offering products and services as per his/her requirements. Further, necessary and essential communication must be made with them so that they can take buying decision based upon it.
Beside this, Hosseini, Maleki and Gholamian, (2010) found that demographics are anotherconcern within online retail as it can affect the loyalty level of customer. In this context, differences in the age, income, gender, race, religion, family background and other related affects the loyalty level. One who is well versed with e-shopping, then he/she tends to be loyal to online stores and vice versa. Further, age is main concern and it shapes loyally as well. Majority of customers that ranges between the age group of 14 to 40 years are loyal customer and individuals that are above 40 years are not much involved into online shopping and hence they are less loyal.

Apart from it, past experiences is another factor that shapes the loyalty as stated by Siddiqi (2011). In case of having past experiences and it was not appropriate with online shopping, then that customer refrains themselves from e-shopping and vice versa. Hence, it is required that online store must meet with the expectation level of customers so that they can gain response from it on regular basis. Furthermore, Liu, Guo and Lee, (2011) has analysed that social media is a platform that either boost the loyalty or decline the same. This is so because, both positive and negative reviews can be post by customers over it and this can affect the buying behaviour of customers. Through this, loyalty also gets hampered.

1.4 Produce a research project specification

We asked from customers about the factors that affects their satisfaction as well as loyalty level. On the other hand, secondary data will be gathered by the way of internet as well as various other sources such as online articles, magazines etc. In this regard, data will be gathered from 50 customers of Ocado who are using all their online supermarket services. In order to analyze the data, qualitative measures will be incorporated under which thematic analysis as well as graphical representation will be done. With the help of developing various themes appropriate discussion over the same can be done. It helps in attaining all the research objectives and developing appropriate conclusion on the basis of these findings.

TASK 2

2.1 Match resources efficiently to the research question or hypothesis

Research Questions

  • What is the importance of consumer loyalty within the online retailing segment Ocado?
  • What current trends prevailing in online retailing segment?
  • What is the different factor that affects the consumer loyalty in Ocado?

2.2 Undertake the proposed research investigation in accordance with the agreed specification and procedures

Under this particular section different research methods as well as strategies will be taken into consideration. As per the given subject matter, it can be define that researcher will incorporate inductive research approach within this study. Under this approach, data are being accumulated earlier and then several theories drawn upon it. Since, the present study involves study of consumer loyalty within the online retailing. Inductive approach helps in identifying appropriate information about the consumer loyalty. This will be applied as a theory in the end of research in a context of other organization. Further, the research approach followed here qualitative as theoretical aspects related to the topic have been studied (Sam and Daniel, 2011). Further, this study covers the descriptive research design which helps in gaining in-depth understanding of the researcher about the consumer expectation as well as loyalty within the online retailing.

2.3 Record and collate relevant data where appropriate

In this scenario, the whole data is being gathered by the primary as well as secondary sources. In order to analyse primary data, data will be gathered from customers of Ocado. Consumers can make their purchase experience better if company provides them better features within the online retailing services. With the help of primary sources, researcher should able to identify the factors which affects the shopping experience of customers as well as loyalty. Further, customers can easily share their knowledge and experience regarding online retailing. For this, a questionnaire survey will takes place through which different perception of consumers will be identified (Merriam, 2009). Further, in this study, simple random technique will be incorporated under which sample size of 50 customers will be selected. For this, random sampling will be used in order to select the sample of customers. In addition to this, systematic random sampling will be employed to select the sample of customers.

TASK 3

3.1 Use appropriate research evaluation techniques

Research Approach

Inductive and deductive are two major research approaches under which research can be carried out in a more effective manner. In the present case, Inductive approach is one of the most suitable approaches which help the researcher in moving from more specific theories to general one (Jackson, 2010). Measuring the factors which affects the loyalty as well as satisfaction level of customers is very qualitative in nature and it differ from people to people. Due to this, Inductive research approach is considered to be the most suitable and effective approaches through which different theories can be developed to related subject matter.

Research Philosophy

With the help of selecting most appropriate research philosophy researcher can develop most appropriate knowledge about the given subject matter. Interpretivism and positivism are two most common types of philosophies through which required information can be attained in an effective manner (Sam and Daniel, 2011). As per the nature of this study, Interpretivism philosophy will be used so that researcher can easily highlight all the important facts and figures about the customer loyalty towards the online retailing segment.

Research Design

It can also be defined as a blueprint of report which guides the researcher about all those ways which helps in order to making the study more and more appropriate. In order to make this research much better, descriptive research design will be used so that proper insights about the subject matter can be gained in effective manner (Creswell, 2013).

Data Collection

It is the most important sections of any research under which researcher can gather most effective and appropriate information about the given subject matter. Primary and secondary are two most common research methods by which researcher can collect required information (Forzano, 2011). In the present study, data has been collected from both primary and secondary data. Under the primary data, data will be gathered from the 50 customers of Ocado who can share their experience about their satisfaction as well as loyalty level. It is the best way to identify all those factors which affects the customer loyalty towards the company. On the other hand, secondary data in the report will be collected from different books, journals, etc (Goddard and Melville, 2004).

Sampling

As per the given report, Purposive sampling technique will be incorporated which help the researcher in selecting the best sample. After selecting this sampling technique, sample size of 50 customers of Ocado Company will be used (Diment, 2012). It helps in gathering their views about the online retailing services of Ocado.

Data Analysis

This particular section is very important as it helps in selecting most appropriate technique so that appropriate outcomes can be presented. In the present scenario, all the data will be analyzed in terms of qualitative research type. Under this, different themes and graphs will be developed on the basis of gathered responses. With this respect, thematic as well as graphical representation will takes place (Sogunro, 2002). It is the best way through which appropriate conclusion can be drawn by developing most effective findings.

3.2 Interpret and analyze the results in terms of the original research specification

Theme: Majority of respondents uses the services of Ocado.

Research results - Ocado

At the time of gathering responses of different respondents it has been identified that most of them uses the services of Ocado. It has been identified that they are loyal towards the company due to their effective and high quality services. As per the graphical representation it has been identified that 80% respondents are using the services of Ocado.
Theme: Website appearance is the major factor which attracts customers most towards the online services of Ocado.

Website appearance is a major factor that attracts customers.

After analyzing the responses of different respondents it has been founded that there website must be of high quality. For a single view website is the only factor can easily change the mindset of customers. Appearance of website highly affects the purchasing behaviour as well as loyalty among customers. Majority of respondents (40) replied in affirmative manner and stated that website appearance can change their mindset towards company and its services.
Theme: Most of the customers use the services of company weekly.

How often does a user use the services

Ocado is the online retailing company and customers are repeatedly purchasing the products and services of different fields such as households etc. Majority of respondents (50%) replied that they weekly purchase the products from online retail services of Ocado. On the other hand, (30%) of them purchase products on monthly basis.
Theme: Core offerings and past experience are the major factors affecting customer loyalty towards online retailing.

Factors affecting consumer loyalty

Findings:

When different consumers have been asked about the several factors affecting their loyalty level it has been founded that core offering and past experience are two factors which affects their satisfaction level. After gathering responses from different respondents it has been founded that most of them (40%) replied that core offerings Picture1such as website appearance, navigation of web pages, display of required information, actual time span of delivery, option for payment and effectual after sales service are the major factors. These are the most effective factors which highly affects their overall decision regarding the services of company. In case of providing timely services with affective display of information customers are highly affected and made their purchase decisions more appropriately. On the other hand, some of them (30%) respondents stated that their past experience with the same company highly affects their burying and purchasing decisions.

3.3 Make recommendations and justify areas for further consideration

Based on the above study, it has been found that a main factor that affects customer loyalty within online retail is core offering and past experiences. Since, core offering includes the main products and services which make it crucial for retail companies to focus upon it so that more of customers can be satisfied. This factor is crucial as it helps in satisfying the actual needs of customers. Further, it is also concluded that core offering is the main factor that helps company in boosting its competency in the market and aids in attracting large number of customers towards it. In this context, company must focus on core benefits and offer appropriate delivery services, payment option, website navigation display of required information and other related. Through this, overall loyalty of customers can be increased and this certainly makes an impact over the growth of the business. Apart from this, company must offer sound after sales service so that they can satisfy the needs of customers. Through this, more of customers lead to repeat purchase and hence these will results into high loyalty. Through this, company is able to attain the business objectives as well.

Considering the conclusion, it is required that online retailers must update their website on regular basis and make it more interactive with customers so that their ultimate needs can be met. In this context feedback and reviews can be taken by them with the help of survey. This will help in identifying the loopholes and same can be rectified. In addition to it, company must make contact with different suppliers so that product can be delivered to customers in fewer time frames. Through this, loyalty gets increased and customers tend to become loyal towards companies. In addition to it, company can even offer option for fast delivery and discounts on regular basis so that more of customers get shifted towards it.

References

  • Bai, B., Law, R. and Wen, I., 2008. The impact of website quality on customer satisfaction and purchase intentions: Evidence from Chinese online visitors. International Journal of Hospitality Management.27(3). pp. 391-402.
  • Christodoulides, G. and de, Chernatony, L., 2010. “Consumer-based brand Equity Conceptualisation and Measurement”, International Journal of Market Research, Vol. 52 No. 1, pp. 43-66.
  • Creswell, J. W., 2013. Qualitative, Quantitative, and Mixed Methods Approaches. 4th ed. SAGE Publications, Inc.
  • Dennis, C. and et.al., 2009. E-consumer behaviour. European Journal of Marketing. 43(9/10). pp.1121 – 1139.
  • Dick, S. A. and Basu, K., 2004. Customer Loyalty: Toward an Integrated Conceptual Framework. Journal of the Academy of Marketing Science. 22(2).pp. 99-113.
  • Diment, K., 2012. Qualitative Research in Accounting & Management. Q methodology: is it useful for accounting research. 9(1) pp.66 – 88.
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