Factors Affecting Customer Loyalty in Online Retailing: A Case Study of Ocado

This research paper aims to identify the factors that affect customer loyalty in online retailing, with a case study of Ocado. The study evaluates the current trends in online retailing, analyses the factors that affect customer loyalty in Ocado, and provides recommendations to gain consumer loyalty.

TASK 4.1

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

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. 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.
Each and every online retailer tries to attract customers by satisfying their needs and
making the right product available for its customers.
The present 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.

RESEARCH OBJECTIVES & RESEARCH
QUESTIONS
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 gain
consumer loyalty within the Ocado online retailing company.
Research Questions
• What are the various factors which majorly affects the
loyalty of customer within the online retailing segment?

LITERATURE REVIEW
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 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.
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.

RESEARCH METHODOLOGY
One of the most essential tasks for any researcher is to
develop appropriate plan and procedure for the same. Within
this respect, Inductive approach will be applied along with
incorporating Interpretivism philosophy. With the help of
this research approach researcher is able to conduct more
effective research in a sequential manner. By applying
descriptive research design researcher will able to identify
all those factors which affects the consumer loyalty.
Moreover, data will be collected from both primary as well
as secondary sources. Primary data will be collected through
questionnaire survey from the customers who use online
retail services.

ETHICAL CONSIDERATION AND
LIMITATION
There are certain limitations to this research which might have
affected the research outcomes. In this context, fewer time frames
available for completing its research is one of the main limitation.
Due to this, data need to collected in short period and this has
certainly affected the authenticity of information. Beside this, cost
is another factor that acts as a limitation. It is a constraint that
confined the scope of research as well. In addition to it, there are
ample of information available on customer loyalty and therefore
concept of keywords has used in order to select the most
appropriate information. Due to this procedure, might be key
information have been neglected by researcher.

DATA PRESENTATION
yes No
40
10
Are you using the services
of Ocado
yes No
40
10
Website appearance is the major factor
which attracts customers most towards
the online services of Ocado.
50%
30%
10%
10%
How often you user the
services of Ocado
Weekly Monthly
Within 6 months Yearly
10%
40%
30%
20%
Factors affecting consumer
loyalty
Demographic factors Core offering
Past Experience Social media platform

CONCLUSION
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.

RECOMMENDATIONS
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.
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• 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
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• Forzano, L.B., 2011. Research Methods for the Behavioral Sciences. Cengage
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Thank You

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