The volume of Internet sales is growing, and not only in Russia – but worldwide. Even during periods of financial and economic instability, when the economy and traditional retail trade are on the verge of recession, online retail does not stop growing. This torrid growth goes hand in hand with fierce competition among hundreds of thousands of online providers. The winners are those who are better able to attract clients, and win them over – turning them into loyal regulars. Marketing specialists world over are working to develop new tools to help increase levels of customer trust and loyalty to online shops, including by increasing the emotional satisfaction experienced by people when shopping online.
As part of the project ‘Research into the Connections Between Client Satisfaction and Business Results in Companies working in the Online Retail Trade’ supported by the HSE’s the Client Satisfaction and Loyalty Research and Study Group in 2014,Elena Panteleeva and Flora Shamiryan looked at what has a greater impact on building consumer loyalty for online shops, how the online-salesperson should behave in order to ensure the customer returns to make further purchases. The results of this research were presented at the HSE conference on ‘Modern Management: Problems, Hypotheses, Research.’
The impact of consumer experience and its various components on client loyalty to Internet shops was assessed via a case study involving online shop N, specializing in the sale of electrical and consumer goods, Shamiryan said. In the first phase, comparable research results regarding consumer experience on client loyalty to Internet shops were analyzed. The second phase saw in-depth interviews carried out with 13 marketing specialists. The third phase involved an emailed survey to customers of shop N (using a mail-out to the client base that includes over 33,000 people.)
‘The client’s emotional and rational evaluation of all direct and indirect contact with the firm, impacting their consumer behavior and choice of online store, the search for and selection of goods, the placing, confirming and executing of an order, and post-sales service, was assessed,’ Shamiryan said.
Before getting deeper into the relationship between salespeople and purchasers, the researchers focused on understanding how clients view online retail overall. Most purchases (81%) are carried out by men aged 21 to 40 (73%), who are educated (65% with a higher education) and well off (over 30% of respondents said they have an income over 60,000 rubles per month).
When the research was carried out most were already loyal clients of the online shop and said that they plan to make purchases there in the future.
An analysis of each stage of the interaction between a client and the online shop has showed that all transactions a customer makes when buying goods online impacts their consumer experience: searching for and selecting goods, making the order, confirming it, its execution, and after-sales service.
Experience has a positive impact on loyalty, with this impact being greater on emotional loyalty than behavioral loyalty. So, if a client likes the salesperson’s service, he/she will view that Internet shop positively, but that does not mean he/she will make another purchase there.
The researchers established that the most important factors in predicting online shops’ marketing effectiveness are: competitiveness, call center, site usability (navigation, design, extent and quality of information) and receiving the goods – with competitiveness being key. Competitiveness covers fair prices for goods, the opportunity to get discounts, payment and delivery terms, extent and usefulness of reviews on the site.
Convenience and low prices are, for customers, key to ensuring sales success in online retail. The likelihood of making future purchases is significantly higher if interacting with the online store is cheap and easy for the consumer, the research authors stress.
For 37% of the consumers ‘lower prices than in other shops’ was the main criteria in selecting an online retailer. Another 17% were led by other customers’ reviews, and 9% chose shops because they have low delivery charges.
Other key success factors identified by Panteleeva and Shamiryan include speed and ease of returning goods, extensive range, and speed of delivery. After-sales service did not have a significant impact on the likelihood of a customer making future purchases.