Evaluating Factors Affecting Customer Loyalty in Ocado Online Retail

This research report investigates the factors influencing customer loyalty within the online retailing sector, using Ocado, a British online supermarket, as a case study. The study aims to identify the importance of consumer loyalty, evaluate current trends in online retailing, analyze factors affecting consumer loyalty in Ocado, and provide recommendations for enhancing loyalty. It uses an inductive approach and interpretivism philosophy, employing a descriptive research design. Data is collected from primary sources through questionnaire surveys of Ocado customers and secondary sources such as online articles and magazines. The analysis incorporates qualitative measures, including thematic analysis and graphical representation, to address the research objectives and draw conclusions about the key factors impacting customer satisfaction and loyalty in the online retail environment.

Research Project

TABLE OF CONTENTS
INTRODUCTION.................................................................................................................................1
Research Aim & Objective................................................................................................................1
Research objectives...........................................................................................................................1
Research Questions...........................................................................................................................2
Critical review of key references.......................................................................................................2
Customer loyalty............................................................................................................................2
Importance of consumer loyalty within the online retailing segment.............................................2
Factors affecting customer Loyalty in Online Retail.....................................................................3
Plan and Procedure............................................................................................................................5
Matching of resources....................................................................................................................6
Questionnaire survey.........................................................................................................................7
Research Limitation...........................................................................................................................8
Use appropriate research evaluation techniques................................................................................8
Research Approach........................................................................................................................8
Research Philosophy.....................................................................................................................8
Research Design............................................................................................................................8
Data Collection.............................................................................................................................8
Sampling........................................................................................................................................9
Data Analysis................................................................................................................................9
Interpretation and analysis of data.....................................................................................................9
Conclusion.......................................................................................................................................13
Recommendation.............................................................................................................................13
REFERENCES....................................................................................................................................14

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 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 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 Aim & Objective
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 gain consumer loyalty within the
Ocado online retailing company.
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Research Questions
What are the various factors which majorly affects the loyalty of customer within the
online retailing segment?
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.
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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
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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.
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Plan and Procedure
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. In this way, it can be stated that with the help of questionnaire survey
different questions will be 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.
However to complete this research, following plan will be followed:
Activity/Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Drafting of research proposal
Defining aims and objectives
of research
Carrying out literature review
Research methodology
Primary data collection
Analysis of data and
interpretation
Conclusion
Recommendations
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Submission to tutor
Changes Based On responses
Final Submission
Matching of resources
In order to analyze the aim of this report, different objectives have been formed that
will be evaluated appropriately:
 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.
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Questionnaire survey
1. Name
2. Age
3. Gender
4. Are you using online retailing services of Ocado?
o Yes
o No
5. How often you use the online services of company?
o Weekly
o Monthly
o Within 6 months
o Yearly
6. According to you what are the major factors which affects your loyalty as well as
satisfaction factor towards the company?
o Demographic factors
o Core offering
o Past Experience
o Social media platform
7. Does website appearance attract you towards the online services of company? Does it
change your mind set about purchasing?
o Yes
o No
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Research 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.
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).
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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.
Interpretation and analysis of data
Theme: Majority of respondents uses the services of Ocado.
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yes No
40
10
Are you using the services of 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.
yes No
40
10
Website appearance is the major factor which
attracts customers most towards the online
services of Ocado.
After analysing 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
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