Consumer Loyalty In Online Retail

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

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TASK 1

1.1 Formulate and Record Possible Research Project Outline Specifications

Research topic:

To identify the factors that affect customer loyalty in online retailing in the UK: A 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 the online retailing segment.
• To analyze different factors that affect consumer loyalty in Ocado.
• To provide different recommendations to maintain consumer loyalty within the Ocado online retailing company.

Research Questions

• What are the factors that affect the loyalty of customers 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 research studies on consumer loyalty in Ocado.

1.3 Undertake a Critical Review of Key References

This is the most important section of any research under which researchers can fill all the prevailing gaps of existing works of literature. Further, this section gives appropriate information about consumer loyalty and the factors that affect them.

Customer Loyalty

It is considered a most important concern in which companies need to maintain their service quality to maintain consumer loyalty. According to Dick and Basu (2004), customer loyalty is both an attitudinal as well as behavioral tendency through which they can favor only one brand over all others. It is highly linked with the satisfaction with product as well as convenience, performance familiarity, and comfort. Loyalty is the only factor that encourages customers to shop more consistently and also feel positive about the shopping experience. In this competitive environment, it is becoming quite difficult for companies to develop several strategies through which they can attract more people. Hsin Chang and Wang (2011) stated that it is the result of consistently positive emotional experience as well as the perceived value of an experience, which includes the products and services. Liu, Guo, and Lee (2011), in their article, define that retaining customers is quite difficult than acquiring new ones. There is consumer experience management, which is the most cost-effective way to drive customer satisfaction and customer retention. With the help of this company, it can gain a higher competitive advantage as well as loyalty (Qureshi 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 organization's success. It is also considered as a main objective for strategic marketing planning. It is the best way to secure the relationship between customers as well as services. Shoham and Makovec (2003) define that loyalty occurs when a customer buys a product or service repeatedly. It 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 to a brand based on their information on that brand. It defines that a company needs to provide right as well as appropriate information to their customers.
Consumer loyalty towards online retailing can be defined as e-loyalty in other languages. According to Dennis et al. (2009), it is a favorable attitude and commitment toward online retailers that results in repeat purchase behavior. It is highly related to the attitude of customers towards an e-commerce website. Loyalty means that they are always purchasing various products from a single website and do not switch to another website. It helps organizations attain a higher competitive advantage by increasing their sales as well as revenues. Further, loyal consumers always spread favorable messages about the services of the company and recommend new customers to the company.
It has been found from the 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 these online services. According to Torres and Kline (2013), trust is the most critical success factor in a successful service relationship. By developing appropriate relationships with customers, the company is expanding its consumer base. At the time of acquiring new customers online, there is a lack of online consumer trust. It is also considered a main barrier to customer participation in e-commerce.

Factors Affecting Customer Loyalty in Online Retail

In the modern era, the concept of online retail has increased to a high extent and companies are adopting this practice to boost their competency. In this context, there are varied factors that affect customer loyalty, and hence same needs to be considered by companies. In this regard, Santouridis and Trivellas (2010) stated that core offering is one of the major factors that involves core and solid benefits that have been attained to customers. Loyalty is not been boosted by card programs and lucrative schemes, but it is boosted by key benefits. Elements of core offering within online retail include website appearance, navigation of web pages, display of required information, actual period of delivery, option for payment, and effective after-sales service. If these elements are missing within the context of online retail, then loyalty also gets hampered. Further, Kheng et al, (2010) commented that satisfaction is a key feature that leads to the attainment of loyalty. A customer can be satisfied by offering products and services as per his/her requirements. Further, necessary communication must be made with them so that they can make buying decisions based on it.
Besides this, Hosseini, Maleki, and Gholamian (2010) found that demographics are another concern within online retail as they can affect the loyalty level of customers. In this context, differences in age, income, gender, race, religion, family background, and other related factors affect the loyalty level. One who is well-versed in e-shopping tends to be loyal to online stores and vice versa. Further, age is the main concern, and it shapes loyalty as well. The majority of customers that range between the age group of 14 and 40 years are loyal customers, and individuals who are above 40 years old are not very involved in online shopping, and hence they are less loyal.

Apart from this, past experiences are another factor that shapes 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 stores meet the expectation level of customers so that they can gain responses from it regularly. Furthermore, Liu, Guo, and Lee (2011) have analyzed that social media is a platform that either boosts loyalty or declines the same. This is so because both positive and negative reviews can be posted by customers over it, and this can affect the buying behavior of customers. Through this, loyalty also gets hampered.

1.4 Produce a Research Project Specification

We asked customers about the factors that affect their satisfaction as well as loyalty levels. On the other hand, secondary data will be gathered by way of the 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. 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 conclusions based on 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 prevail in the online retailing segment?
• What is the different factor that affects the consumer loyalty in Ocado?

2.2 Undertake the Proposed Research Investigation According to the Agreed Specifications and Procedures

In this particular section, different research methods as well as strategies will be taken into consideration. As per the given subject matter, it can be defined that the researcher will incorporate an inductive research approach within this study. Under this approach, data are being accumulated earlier, and then several theories drawn upon it. The present study involves the study of consumer loyalty within online retailing. The inductive approach helps in identifying appropriate information about consumer loyalty. This will be applied as a theory at the end of research in the context of other organizations. Further, the research approach followed here is 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 an in-depth understanding of the researcher's consumer expectations as well as loyalty within 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. To analyze primary data, data will be gathered from customers of Ocado. Consumers can make their purchase experience better if the company provides them with better features within the online retail services. With the help of primary sources, the researcher should be able to identify the factors that affect 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 take place through which different perceptions of consumers will be identified (Merriam, 2009). Further, in this study, a simple random technique will be incorporated, under which a sample size of 50 customers will be selected. For this, random sampling will be used 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 more effectively. In the present case, the Inductive approach is one of the most suitable approaches that help the researcher move from more specific theories to general ones (Jackson, 2010). Measuring the factors that affect loyalty as well as the satisfaction level of customers is very qualitative and it differs from person to person. Due to this, the Inductive research approach is considered to be the most suitable and effective approach through which different theories can be developed to related subject matter.

Research Philosophy

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

Research Design

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

Data Collection

It is the most important section of any research under which a researcher can gather the most effective and appropriate information about the given subject matter. Primary and secondary are the two most common research methods by which researchers 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 experiences about their satisfaction as well as loyalty level. It is the best way to identify all those factors which affect 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, the purposeful sampling technique will be incorporated, which will help the researcher in selecting the best sample. After selecting this sampling technique, a 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 the 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 based on gathered responses. With this respect, thematic as well as graphical representation will take place (Sogunro, 2002). It is the best way through which appropriate conclusions can be drawn by developing the most effective findings.

3.2 Interpret and Analyze the Results in Terms of the Original Research Specification

Theme: The majority of respondents use the services of Ocado.

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

After analyzing the responses of different respondents, it has been found that their website must be of high quality. A single-view website is the only factor that can easily change the mindset of customers. The appearance of a website highly affects purchasing behavior as well as loyalty among customers. The majority of respondents (40) replied affirmatively and stated that website appearance can change their mindset towards the company and its services.
Theme: Most of the customers use the services of the company weekly.

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

Findings:

When different consumers have been asked about several factors affecting their loyalty level, it has been found that core offerings and experience are two factors that affect their satisfaction level. After gathering responses from different respondents, it has been found that most of them (40%) replied that core offerings Picture1, such as website appearance, navigation of web pages, display of required information, actual period of delivery, option for payment, and effective after-sales service, are the major factors. These are the most effective factors that highly affect their overall decision regarding the services of the company. In the case of providing timely services with the effective display of information, customers are highly affected and make their purchase decisions more appropriately. On the other hand, some of the (30%) respondents stated that their experience with the same company highly affected their buying and purchasing

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