Investigating Consumer Choices: In-Store vs. Online Shopping at Tesco

This dissertation explores the factors influencing consumer choices between in-store and online shopping within the UK retail sector, focusing on Tesco. It examines factors affecting in-store shopping, such as convenience, variety, customer treatment, and store ambiance, as well as factors influencing online shopping decisions, including marketing campaigns, economic conditions, personal preferences, and peer influence. The study also identifies challenges faced by customers during both online and offline shopping experiences at Tesco. The research aims to provide insights for Tesco to improve customer satisfaction, retention, and overall performance by addressing these factors and challenges effectively. Desklib provides access to similar dissertations and study resources for students.

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.

Return policy: It is one of the vital factors which gives customer a choice to return
unwanted purchase which does not fulfil their requirements. It is determined that without a return
policy, the customer’s behaviour towards shopping is impacted as they are being emphasis to put
high faith in commerce business that is sometimes complex to attain because of falsely described
products and deception. It is determined that most of the companies who offer online provide an
effective and appropriate return policy to customer associated with time which further give
customer a positive mind set to but online instead of offline.
Time: It is one of the main concerns for most of the people or community when they prefer
online shopping. It is determined that most of the individuals compare the time spent on online
shopping and physical shopping and believe that they save a lot of time as they did not require to
leave a place. In the present, time plays an important role as everyone is looking to save their
time and prefer to spend in the work. Online shopping assist to save the time of customers and
ensure quality shopping as well. In context to Tesco, it offers products online and ensure on-time
delivery to its customers which is one of the major reasons that it has high customer base level
and repeat purchase as well. It is important for respective organisation to enhance its online
presence to achieve competitive edge at marketplace.
E-service quality: Electronic service quality is referred as an extension of website to
facilitate purchasing, shopping as well as distribution in an efficient and effective manner. It is
determined that E-service associated to customer perception on the outcome of the services is
high and effective as compared to offline shopping. It is analysed that it helps customers to know
the viewpoints and feedback of other customers on their chosen product which further help them
in better decision. Along with this, it also develops trust and positive mind-set of customers
towards the brand that has positive impact on the performance of an organisation. The service
quality which is provided on online site consist of experiences during as well as after the
purchasing and interaction procedure by online store. Furthermore, the indicators of e-service
quality consist of website functionality, responsiveness & fulfilment by company, information
quality, customer relationship and so on. All these indicators affect customers towards online
shopping and better purchase decision making.
Apart from this, there are also other factors that influence customers towards online
shopping such as security, easiness, website quality and many more. It is important for an

organisation to ensure all these factors so that they can cover large are and increase its customer
base level as well as profitability in an effective manner.
Challenges faced by the customers during online and offline shopping within Tesco
As per the viewpoint of Darji, (2018), it is stated that online shopping has changed the
overall way and manner of shopping but there is lot of issues which is faced by customers while
shopping online. It is important for companies to ensure that all the issues of customers must be
considered and resolved as it help them to retain customers fir longer time and maintain
performance in an effective manner. Along with this, it is determined that most of the people are
nowadays relying mainly on online shopping as it helps them to save time, cost, convenience,
quality and many more. Many of the individuals are relying on online sales, discount, schemes
that is provided by companies (Tesco Company’s E-Commerce Implementation and Challenges,
2021). The increase in number of online offerings and e-commerce websites, the issues faced by
customers at the time of purchasing is also increased. The issues faced by customers while doing
shopping online is given below:
Product quality: One of the common issues that is faced by customers due to online
shopping is that some products does not guarantee quality of product. Along with this, it is
analysed that e-commerce websites are acting as issue for sellers to sell its offerings as
fraudulent sellers are getting registered and is selling low-quality products in the fake name of
original products. Sometimes the seller refuses to exchange or replace the faulty products and did
not give refund to customers due to which customer bear loss and did not repeat purchase from
that brand.
Logistics-related issues: It is another issue that is faced within online shopping by
customers. It is stated that some of the products are damaged or lost while in-transit and
sometimes the tracking system is also unable to locate the product accurately (Most Common
Problems faced by Consumers while Shopping Online, 2018). These products are sometimes not
get delivered on time and customers must wait for days to receive their ordered products. The
same issues are faced by customers when it comes to return the offerings.
Ambiguous website policies: It is analysed that many of the shopping websites have no
website policies which is unclear as well as confusing for the user. In addition to this,
inappropriate data leave customers in issue of return of products or refund of money. Moreover,
some of the websites are not clear in context of guarantee and warranty of products which has

raised question in the mind of customers, and they did not prefer it convenient to but the
products. Inappropriate website policies and information develop an issue for the customers and
provide them bad experience as well.
Payment issue: It is determined that there are lot of online shopping issues faced by
customers nowadays and among them one of the issues is online payment. Although, there are
many payments methods available such as debit card payments, net-banking, cash on deliver but
payment failure take place due to payment gateway error, website’s server error, technical
glitches that sometimes deduct the payment of customer’s card or account but is not received by
website. This has arisen issues and to refund the amount customers must wait for 7 to 15 days.
This has developed issues and the customers did not also take any action towards it.
According to Patel, (2022) it is analysed that there are many issues that is faced by
customer while shopping offline or physically. One of the issues is high waiting time for billing
which sometimes frustrate and exhaust customers due to which they did not prefer to repeat
purchase. along with this, it also develops negative mind-set towards brand and decline the
customer base level of company. Another issue is lack of real time engagement due to which
customers sometimes are not able to take appropriate decision. It is determined that customers
need instant assistance and prefer face-to-face conversation to get appropriate solution but due to
lack of staff and ineffective knowledge, they are not getting right solution from the store. Rude
and ineffective communication of customer service staff is the issue that is faced by customer at
the time of offline shopping. It is analysed that when customers reach for support and enquiry,
they are already worried and if customer service staff reply rudely then it develops negative
mind-set for brand. Lack of unified customer view is also the issue that is faced by customer at
the time of offline shopping (Key Customer Service Problems, 2022). The improper alignment
among customer journey and customer service outcome as inconsistent service that frustrate the
customers and due to this they shift to another brand. Apart from this, there are also other issues
associated to offline shopping that is slow response time, offering a wrong product, ineffective
after sales support, offering wring restaurant and so on.
Best way for Tesco through which challenges of customers can minimized
As per the viewpoint of Patel, (2022), in context to Tesco, there are various customer
service challenges which are faced by the organisation in order to enhance customer service.
There are various strategies which are used by the company in order to solve various issues.

With the help of acquiring more customers it helps in solving various issues. With the help of
constant quality check and using quality raw materials will help in enhancing the quality of the
products and services. With the help of effective transportation and assigning efficient and
effective employees in the organisation it helps in solving logistics related issues. In addition to
that, using the right payment methods and online methods will help in solving the payment issue
and will attract more and more customers. Moreover, the organisation can cultivate customer
loyalty through acknowledging and offering proper support to the service problems of the
customers with the help of using useful solutions that can help in impressing the consumers.
Furthermore, satisfied customers helps the organisation in increasing the customer loyalty. In
addition to that it is very important to resolve the problems of customer in a quick manner and
also having deep understanding about how the employees feel and instantly apologizing for any
mistakes made with a genuine apology[10 Key Customer Service Problems (and How to Resolve
Them)].
In context to Tesco, it is very important for the managers and leaders to listen to the
consumers very carefully and showing genuine empathy towards the customers. It is also very
important to follow up with the customers, assessing the situation, delivering the solution,
offering a solution and providing option whenever possible. It is very important for the
organisation to understand the needs and expectations of the customer as it helps in finding out
the preferences, expectations, needs and preference of the customer. In context to Tesco, the
leaders and managers need to face a lot of challenges such as not providing rewards or discounts,
service multiple consumers at same time, having no solution the problem of customer and being
time pressed. For a organisation to run successfully, it is very important to provide customers
with various benefits such as rewards, offers, discounts, coupons etc in order to attract more and
more customers and also dealing with one individual customer at a time and always focusing on
solving issues in relation to the problems of the customers and providing them instant solutions.
All these strategies will help the organisation in dealing with the customer problems and running
the operations of the company in an effective and efficient manner and also will result in
generating more profits and revenue (Analysis Of Trends, Challenges And Best Practices In
Contemporary Retailing, 2018). With the help of implementation of all these strategies, it will
help in retaining old customers, attracting new customers and also enhancing the image of the
brand. This will also help in building trust among consumers and solving their queries in speedy