Impact of Online Shopping on Retail

This assignment delves into the profound impact of online shopping on the retail landscape. It examines various factors influencing consumer behavior in the digital age, including the role of customer experience, the effectiveness of loyalty programs, and the importance of service quality across different retail channels. The document also analyzes the interplay between online and offline shopping experiences and highlights the strategies retailers are adopting to adapt to this evolving environment.

Running head: RETAIL & SERVICE LOGISTICS
Retail & Service Logistics
Name of Student
Name of University
Author Note

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Table of contents
Introduction................................................................................................................................2
Aim and scope............................................................................................................................2
Factors satisfying customers......................................................................................................2
Changes adopted by shopping centres.......................................................................................5
Components of service package.................................................................................................7
Conclusion................................................................................................................................10
Reference..................................................................................................................................11

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Introduction
The purpose of this assignment is to analyse the components required for a proper
service package. The satisfaction of the customers is done by analysing the components that
make the customers happy. In this regard, the quality or price of a product is not the only
factors that drive the happiness of the customers (Ivanauskiene and Volungenaite 2014). The
report is based on identifying these factors and implementing it for increasing the satisfaction
of the customers. The components related to service package is analysed and the changes that
an organisation need to make to mitigate the threat posed from online shopping is also taken
into consideration. In order to understand the concept in a proper manner, the report focuses
on the service package provided by the retail sectors. The report considers the example of
Emporium, a contemporary shopping mall situated in Australia. Emporium is one of the
largest shopping malls situated in Melbourne, Australia that not only provides retail products
but also possess restaurants and food court (Emporiummelbourne.com.au 2017).
Aim and scope
The aim of the report is to analyse the ways by which components of service products
can be used to gain customer satisfaction. One of the biggest issues that the retail sectors face
in the modern world is the quality of service that it provides. The report analyses these issues
and aims to provide solutions for mitigating these issues. The scope of the report is to analyse
the factors that contribute to the satisfaction of the customers. It also provides a diagrammatic
representation of the components involved in the service package.
Factors satisfying customers
According to Bojei et al. (2013), customer satisfaction is an important component for
any business. Without proper customers, a business cannot survive due to lack of profit-

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making opportunities. Hence, organisations, particularly retail companies need to analyse the
requirements of the customers in order to identify ways to satisfy them. This is also valid for
Emporium as it is one of the leading shopping malls in Australia. The main factors that
contribute to the satisfaction of customers as discussed in the below headings.
Proper quality of products- One of the main concerns that remain in the mind of the
customers is the quality of products. The product quality is an important factor as based on it
the loyalty of the customers can be ensured (Lin and Bennett 2014). The quality is an issue
because customers would not want to purchase products repeatedly due to its poor quality.
Without a proper quality of products, marketing or promotion is not going to be enough to
increase the sales and improve profitability. Hence, Emporium needs to ensure that the
quality of the products they sell in terms of retail or food need to be at the highest level. The
quality needs to improve keeping in mind the demands of the customers.
Pocket-friendly prices- According to Varley (2014), the prices of a product need to be
such that all the people can purchase it. The price needs to be settled in a manner so that it
also brings about profitability. Such an important strategy need to be adopted by managers in
order to improve the sales of the products. In the case of Emporium, the prices of the
products and the food provided by the sector need to be at a balanced price. The sector also
possesses restaurants that are frequented by visitors of every social class. Thus, the price of
the goods is an important factor for the retail sector. This can help in increasing the demand
for the products and attract customers.
Information related to the product- Customers expect proper information about a
product before investing their money in purchasing it. This is another aspect of the customers
as less information involves less knowledge about the product. According to He and Yin
(2015), withholding information about a product can lead to legal actions being taken against

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the organisation. In this regard, Emporium needs to ensure that detailed description of a
product is provided in order to reduce any confusion relating to the knowledge of the product.
Mitchell et al. (2015) believe that not only product, information about the organisation is also
crucial in getting the attention of the customers. This can help in improving the brand image
and provide a proper reputation for the organisations.
Friendly atmosphere- While visiting a store to purchase a product it is important that
the customer receives a friendly experience. Friendly nature of the employees in the retail
stores and the helpful attitudes towards the customers contribute to the thought of repeat
purchase of the customers (Cappetta et al. 2015). Emporium needs to ensure that such a
friendly atmosphere is maintained in the sector in every department. This can contribute
along with all other factors that help in the satisfaction of customers. In this regard, a proper
service to the customers can also help in maintaining customer satisfaction. Friendly-attitude
of the support staff is important to attract customers.
Proper after sales service- Oliver (2014) stated that a proper after sales service is
necessary in order to maintain good relations with the customers. This is because the after
sales service helps to obtain feedback from the customers in terms of satisfaction received by
them from using the product. This can help in improving the quality of the products and
ensure that the loyalty of the customers is maintained. Emporium needs to ensure that such an
after sales service is provided after the purchase of goods from the retail department. In order
to ensure the quality of food, the sector can provide feedback forms to the customers before
they depart from the restaurant (Orel and Kara 2014).
Accessibility of the place- This is another important aspect for a customer. Customers
need to understand the easiest ways to approach a place of interest. Retail sectors situated at a
long distance from the residing areas may be difficult to access for the customers. Hence, it is

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important to establish the place at a suitable position. According to Lian and Yen (2014), a
long distance from residence place can also affect the online delivery of products. Thus, this
is an important factor needs to be analysed for the benefit of the customers as well as the
retail stores.
Changes adopted by shopping centres
In the modern world, most people are into online shopping. The reason behind such
an involvement in online shopping is the fact that it provides a wider range of choices at a
reasonable price. Moreover, the fact that such a shopping can be done by staying at a
particular place provides an added advantage to the people. Online shopping also allows
people to choose from a variety of things and get proper after sales service for the purchase of
an item. In this regard, the retail sectors suffer the most as people involved in purchasing
goods usually targets the purchase of clothes, electronic items and foods (Aloysius et al.
2016). Hence, online shopping helps in gaining advantage rather than on foot shopping.
It has been seen that the emergence of various online shopping stores such as Amazon has
resulted in the decline of on-foot shopping. This is not only due to the range of products or
reasonable prices but also for the discounts that the company provides during various
celebrations. This provides an excitement in the minds of the people to engage in online
shopping as the creativity to attract people helps in meeting the demand of the customers.
Nepomuceno et al. (2014) observed that online shopping have certain disadvantages that may
hinder the satisfaction level of the customers. Security threats to the personal information of
the customers always pose a threat while purchasing things from online. However, despite
this threat, the online shopping in Australia has grown considerably in the past year (Wang
and Qu 2017). Physical stores have found it difficult to attract customers and increase the
sales of the products. The retail companies that do not have a proper website for customers to

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purchase online have faced such a situation. It has been seen that almost 10% of the growth
has been witnessed in the online sector in the past one year. At the same time, the growth rate
of physical stores has only been 3%. This signifies the dominance of the online shopping
centres over the retail stores. In this regard, it can be said that the retail shops need to work
alongside shopping centres in order to increase its popularity among the customers (Bansal
and Taylor 2015).
The physical retail sectors have seen a considerable decline in the past 10 years. The
profit margin in these sectors has only been at about 5% while the online retailers have grown
considerably. Due to this, the retail stores have adopted innovation techniques in order to
attract customers to the stores. According to Häikiö and Koivumäki (2016), the retail stores
need to be extra creative in order to attract the customers. This can be done providing gift
vouchers upon visiting the stores, engaging VIP shopping nights to create a lively
atmosphere. It can also introduce competitive events to attract the participation of the people.
This can help to improve the condition of the physical stores and can help in increasing the
profit of the sectors. The collaboration with shopping centres can also help in attracting
customers (Lund and Marinova 2014). This is because the people frequent the shopping
centres during the leisure time. Hence, the promotion of the retail stores can be done by the
collaboration with the shopping malls. Thus, it can be said that such a step can be effective in
reducing the gap that the physical retail sectors have with the online sectors.
In the case of Emporium, the retail shop needs to adopt such techniques in order to
attract customers. However, unlike other retail shops, Emporium holds an added advantage of
providing restaurant service. This is an important strategy as people often visit restaurants
while coming or going from home. This can help the retail shop to attract customers in the
department that sales retail products. Mosteller, Donthu and Eroglu (2014) stated that the
growth of online shopping could be reduced by employing this strategy. Emporium provides

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an authentic experience to the customers if they visit the place. A friendly atmosphere is
always important in order to attract the customers and satisfy the needs. A proper marketing
research is also necessary in order to attract the customers. According to Wright (2014), the
primary analysis that needs to be done is the reason behind the less involvement of on-foot
shoppers. Emporium needs to analyse this data in order to improve itself in the market and
increase the profit of the company through innovation and creativity. The research includes
demography, segmentation of the customers and shopper traffic. Based on this, the
components of service packages can be analysed that can help to improve the falling
standards of the retail sectors.
Components of service package
Combaz et al. (2015) stated that in order to provide proper service to the customers,
every organisation needs to analyse four essential components that can help in attracting the
customers. These components include the physical product, the service product, the service
environment and service delivery. One of the important elements in maintaining the
satisfaction of the customers is the intangible service that is provided. Customers remain
satisfied with the after sales service as the products may be hampered during the purchase
(Cantallops and Salvi 2014). This is an essential criterion particularly after the purchase of an
electronic good. Thus, after every organisation need to follow the four components and
ensure that the satisfaction of the customers can be maintained.
The physical product- According to Dingus, Hu and Krush (2016), the physical
product refers to the deliverables that an organisation provides to the customers. These
products can be verified by physically handling the items. The products that are designed
need to match the needs of the customers. In order to execute a proper physical product, it is
necessary that the marketing managers and the engineers maintain proper communication

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with one another. The common goal of an organisation is to meet the needs of the customers
(Martínez and del Bosque 2013). This can also help to reduce errors and provide the
customers with the exact demand of the customers. Emporium can adopt these tactics and
ensure that the cost of improvement for the products is reduced. This can help in managing
the finances in an effective manner. Emporium also provides restaurant service hence it is
needed that the store manages to provide quality foods to the customers. In this case,
however, the collaboration with the engineers is not required. The marketing managers need
to communicate the survey message to the people responsible for the betterment of the
restaurant.
The service product- The service product is referred to as the performance purchased
by the customers. This includes the interaction with the personnel of the organisation and
learning more about a product. According to Dai, Forsythe and Kwon (2014), the service
product also includes the non-interference of the salesperson while customers are analysing a
product. The customers can seek help for the representatives if they are willing to talk to the
members. Knowledge about a particular product is needed before purchasing so that
customers can ensure that the right product has been purchased. In this regard, the guidance
of the representative is required in order to make the customers satisfied and clarify any
doubt that they may face (Pappas et al. 2014). In the case of Emporium, this service product
needs to be such that the customers remain satisfied with the behaviour of the people. In the
case of the restaurant, the service people can only approach the customers after they are asked
for.
The service environment- The service environment also includes the market
segmentation and the position of an organisation. This is done by putting up advertisements
for the intended customers and re-decorating the ambience of the organisation. However,
Sweeney, Soutar and Mazzarol (2014) stated that the service environment varies with the

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type of services provided in the sectors. The service environment can be made creative by
designing ways to attract the customers. The retail sectors can do so by providing music all
the time so that the customers do not feel monotonous while engaged in shopping. In the case
of Emporium, the sector can make innovations to the ambience of the restaurant. In order to
attract customers, the sector can put up an advertisement for the service that is being provided
at the particular moment. This can help in the increase of customers and improve the falling
standard of retail sectors in the country (Mok, Sparks and Kadampully 2013).
The service delivery- According to Orel and Kara (2014), this is an important aspect
of attracting customers and retaining the loyalty of the customers. The service delivery refers
to the after sales service that is received by the customers after the purchase of the product.
The service that is delivered by the companies needs to satisfy the customers in a way that the
loyalty of the customers can be maintained. Collier and Bienstock (2015) stated that the
service delivery is the result of the planned activities that are executed by the organisations.
In this context, it can be said that Emporium needs to ensure that the after sales service
provided to the customers can help in retaining the satisfaction of the customers. In the case
of the restaurant, feedback of the customers is necessary to understand the viewpoint of the
customers and make the service better.

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Figure: Four components of service package
(Source: Sweeney, Soutar and Mazzarol 2014)
Conclusion
Thus, it can be concluded that in order to improve the fallen standards of the physical
retail store it is necessary to implement tactics that can help in increasing the profitability.
The ways by which the retail sectors can develop a proper service package can be done by
strategically implementing the services based on the type of product sold. Online shopping
has been the most popular form shopping in the modern world. In the case of retail
organisations, it is necessary to re-invent it and develop to be a suitable competitor for the
online purchase. The collaboration with shopping malls can help in developing the product in
a manner so that it satisfies the need of the customers. Thus, the four components of the
service package need to be maintained in order to satisfy customers and ensure the loyalty.

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