Factors Affecting Consumer Choice Between In-Store and Online Shopping: A Study on Tesco

Dissertation

EXECUTIVE SUMMARY
Customers are one of the integral part of an organisational growth and success at
marketplace. and there are many factors which impact on their buying behaviour. In addition to
this, most of the people are now shifted towards online shopping due to many aspects such as
time, convenience, quality and so on. There are many issues faced by customers because at the
time of online and offline shopping that is high waiting time in queue, not getting deliver on
time, Product quality, logistics-related issues, ambiguous website policies, payment issues and
many more. It is important for organisations to make ensure meeting of customer requirements
as it has positive impact on the purchase decision of customers.

Contents
Topic: To investigate the factor affect consumer choice between in store shopping and online
shopping within UK retail sector: A study on Tesco.......................................................................3
INTRODUCTION...........................................................................................................................3
Research background...................................................................................................................3
Significance of the research.........................................................................................................3
Research aim and objectives........................................................................................................4
Research Questions......................................................................................................................4
Rationale for the research............................................................................................................4
Outline of research methodology.................................................................................................5
LITERATURE REVIEW................................................................................................................5
Factor that affect store shopping within retail sector...................................................................5
Factor that affect on customer decision making towards online shopping..................................6
Challenges faced by the customers during online and offline shopping within Tesco...............6
Best way for Tesco through which challenges of customers can minimized..............................6
REFERENCES................................................................................................................................7

Topic: To investigate the factor affect consumer decision making between in
store shopping and online shopping within UK retail sector: A study on
Tesco.
INTRODUCTION
Research background
Customers are the asset and one of the main reasons for an organisational growth and
success (Sharma, 2020). It is important for a company to analyse the customer choice and
requirements and provide them offerings so that they can feel satisfied and remain loyal for
longer time. The shopping experience of customers is changing due to changing in market trends
and preferences. In addition to this, it also include the aspect that is time and convenience as
well. In the present time, most of the customers are shifting towards online shopping instead of
store and offline shopping (Stouthuysen and et. al., 2018). It is vital for companies to focus on
the choices of customer as it help them to fulfil the requirements of customer and improve brand
image as well. The present study will focus on the factors affect consumer choice between in
store shopping and online shopping.
For the present study, Tesco is taken into consideration. It is a British multinational
grocery as well as general merchandise retailer which was founded in year 1919 and head office
in England, UK. It has around 7000 shops worldwide that directly shows the company has high
market share and growth (Tesco, 2022). In addition to this, it has both offline and online store
that help in covering large market size and customer base level. The present study will help
TESCO to gain knowledge about the factor affect consumer choice between in store shopping
and online shopping within UK retail sector. This further help to consider factors while offering
due to which it can gain various advantages such as customer satisfaction, customer retention,
improvement in performance and profitability and many more.
Significance of the research
In the present time, it is important for an organisation to provide an effective and quality
service to customer which help them to retain customers for longer run and maintain its
performance level as well. Along with this, focus on customer choice assist organisation to retain
them for longer time period and develop loyal customer base in an effective manner. In addition

to this, most of the customers are shifting towards online shopping and prefer to buy products
from those retail stores which provide them quality, convenience, and variety as well (Naeem,
2020). The present study helps to investigate the factors which affect consumer choice between
in store shopping and online shopping. This assists respective organisation to consider these
factors while offering goods and services at market that leads to improvement in performance,
profitability, and brand image of company. Moreover, it also assists in retaining customer loyalty
which is significant to attain competitive advantage at marketplace.
Research aim and objectives
“To determine the different factors that affect the customer decision making between in
store and online shopping within Tesco.
Objectives:
 To determine the factor that effect on customer decision making towards store shopping
within retail sector
 To assess various factor that effect on customer decision making towards online
shopping.
 To ascertain the challenges faced by the customers during online and offline shopping
within Tesco.
 To recommend the best way for Tesco through which challenges of customers can
minimized.
Rationale for the research
One of the main reasons to conduct this study is to gain knowledge about factors which
impact the choice of customer in store shopping and online shopping. Along with this, the
present study assists to various stakeholders that is organisation, researcher, and students. In
context to researcher, it helps in gaining understanding about factors impact on customer
decision while store shopping and online shopping (Factors that affect online shopping, 2018).
Along with this, it helps to know about challenges faced by customer at the time of offline and
online shopping. In context to Tesco, it assists company to develop effective strategies to resolve
issue faced by customer while shopping which will further help improvement of customer base
level and retention as well. It helps researcher to learn and improve skills that is data analysis,

data collection, data interpretation, time management and many more. In the last, it will also
assist researcher to conduct future studies in more effective and timely manner.
LITERATURE REVIEW
In this section, the literature review is conducted on the basis of developed research
objectives. The main objective here is to gain in-depth knowledge about topic from various
sources that is books, Journals, online polls and many more. The literature review based on
research objectives is given below:
Factor that affects store shopping within retail sector
As per the viewpoint of Juneja, (2021) It is determined that the taste and preferences of
customers towards the shopping is changing as per the market trends and convenience. To fulfil
requirements of customer and help meet with their needs, it is important for companies of retail
industry to undertake the factors which impact customer towards store shopping as it assists them
to develop strategies and ensure customer satisfaction. The factors which impact customers
towards store shopping within retail sector is given below:
Convenience: It is considered as one of the main factors that directly impact on the decision of
customer to buy product from the store. It is analyzed that if the store is nearby to the customers
or within their area then they prefer to visit stores. It is important for an organization to open
their stores within the area where there is high population. This help in attracting large number of
customers, increasing footfall which has positive influence on sales and profitability of company.
Variety: Another fact that impact on store shopping within the retail sector is different variety of
products offered by an organization. It is determined that if a retail store offers various varieties
and fulfil number of customer requirements at one place then customer prefer to shopping from
that specific retail store as it saves their time and is also convenient. Tesco has big stores that
offer multiple products which help in attracting customers and provide them ease which further
leads towards repeat purchase and achievement of objectives as well.
As per the view point of Travis (2021), there are also other factors that affects store
shopping within retail sector and is given below:
Customer treatment: It is analyzed that providing effective and good treatment of customers is
an effective way to attract and pull customers towards the store. It is vital for retailers and its
associated staff members to treat the customers properly. It is important to greet customers and

assist then within their shopping as it helps them to gain positive customer feedback and ensure
repeat purchase by customers. It is analyzed that if the customers are treated proper at the store
and their requirements is fulfilled properly, them they prefer for the repeat purchase which leads
to increase in performance and profitability of an organization.
Ambience of the store: It is analyzed that the ambience of the store plays an important role in
acquiring and attracting new and existing customer towards retail stores. It is determined that
customers did not prefer to buy products from the store which is not clean and is not managed
properly (Factors That Affect the Retail Industry Nowadays, 2021). The stores of Tesco are
properly managed and ventilated as it helps in making customers buying enjoyable and effective.
Apart from this, it also assists in improving customer base level and increase footfall of customer
towards the retail stores. It is determined that the ambience of store help in attracting large
number of customers in an effective manner that leads to increase in customer base level,
profitability and brand image of respective company.
Factor that effects on customer decision making towards online shopping
According to Valentin Radu, 2019, understanding, analysing, and keeping track of
consumer behaviour is critical for business. As per his views, there are many things that could
affect the behaviour of customers, but most occurring factors influencing consumer behaviour
can be explained without any difficulty. Marketing campaign influences shopping decision of a
customer which should be done correctly with right message to persuade customers to exchange
brands or opt for expensive alternatives. Author adds that marketing campaigns such as
Facebook advertisements as e-commerce can be used as reminders for product or services that
need to be brought regularly but may not be necessary for affecting customers. According to the
customer a good marketing message can influence impulse purchases (Valentin Radu, 2019).
Another factor that is identified is economic conditions, mainly for expensive items like houses,
vehicles, etc. plays important role. Accordingly, it's explained that if customer's decision-making
process is longer for expensive purchases and it can be influenced by more personal factors at the
same time. According to the author, another factor that can be established is personal preferences
that affects the buying decision of customer mainly due to certain reasons such as likings,
dislikes, priorities, morals, ethics, and values. It is said that advertisements can affect behaviour
but lastly, consumer's choices are greatly influenced by their preference. For this an example of
vegan person on whom the impact of advertisements related to burger joints would be of no

value as the person would not eat meat. Another reason that the author explains is group
influence, or peer pressure that impacts consumer shopping decision. It had been elaborated with
relation to family members, classmates, immediate relative, etc. who plays role in our decisions.
Social psychology impacts consumer behaviour such as fast food over homemade meals, etc.
Moreover, it had been stated that the factor such as purchasing power is a crucial determinant of
influencing customer's behaviour to do shopping for a particular product. The product might be
excellent, the marketing could best on point, but if the person doesn't have the money that would
restrain them to buy expensive things. It is analysed that segmenting customers based on their
buying capacity will help marketers determine eligible customers and achieve better results.
According to Micam(2020), It is analysed that there are various factors which impact
directly or indirectly on the consumer decision towards online shopping. Along with this, it is
complex for organisations to judge the psychological aspect of customers while they are buying
any product. It is determined that the purchasing behaviour is also impacted through shopping
orientation, channel knowledge, demographics and so on. But there are different factors which
lend higher transaction rates and is having high impact into online shopping behaviour. It is
important for an organisation to consider all the factors which impact on the decision making of
customers at the time of online shopping so that better offerings is provided to them in an
appropriate way. Moreover, it also help to increase in number of sales and profitability level in
an appropriate way. The factors which impact on the consumer decision making towards online
shopping is given below:
Convenience: It is one of the effective and best aspect of online shopping and is also the
main reason of online shopping by most of the customers. It is analysed that it saves time of
customers throughout the day and is provide door-to-door delivery to customers. It is analysed
that customers also have wide range of choices to select and compare which they cannot at the
time of offline shopping. Instead of going out and give high time, individuals are having one
click option and doing things that they want (Analysis of the Factors Impacting the Online
Shopping Decision-Making Process, 2020 ). Companies such as Tesco, it is important for them
to ensure that all its offering is available to customers online as it assist in attracting large
number of customers and help them to improve its sales as well as profitability level. For
example, Tesco provide door-to-door service to customers in order to provide convenience to
customers.