Customer loyalty in Web-based retailing

Van La, K 2005, Customer loyalty in Web-based retailing, Doctor of Philosophy (PhD), Management, RMIT University.

Document type: Thesis
Collection: Theses

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Title Customer loyalty in Web-based retailing
Author(s) Van La, K
Year 2005
Abstract E-commerce is increasingly recognised as an integrated, rather than independent, part of the retail industry. As online competition grows and online marketing activities intensify, the importance of customer loyalty in e-retailing has also taken central stage in marketing research.

This study explores the nature and characteristics of e-loyalty and its direct and indirect antecedents. Drawing from the literature on customer loyalty in the traditional, offline business context, it contends that e-loyalty is determined primarily by the quality of the relationship between an Internet retailer and its customers, and the customers' overall satisfaction with the retailer. Relationship quality, in turn, is influenced by the levels of perceived safety, trust and commitment that customers have in relation to their retailer, while service quality, Web site quality and value perception contribute to overall customer satisfaction in this context. Thus, relationship quality and overall satisfaction mediate the relationship between e-loyalty and its indirect predictors.

To test these relationships, over 500 customers of four Australian Internet retailers were surveyed online. The questionnaire contains 92 indicators that have been either employed in prior research, or newly developed based on existing theory. These indicators were first factor analysed to determine the underlying dimensions of the research constructs. The relationships between these constructs were subsequently tested using structural equation modelling (SEM).

In general, most hypothesised relationships were well supported, suggesting a consistency in the relationships between these constructs across online and offline settings. To this extent, the results indicate that existing offline marketing theories can provide a platform to create a body of knowledge pertinent to Web-based marketing.

The results of the analysis, however, also show that not all hypothesised relationships could be upheld. Also, the findings indicate that the dimensionality of some constructs differs, to varying degrees, from what is reported in prior studies. These suggest that online consumer perception and behaviour are likely to differ, in some way, from those in the offline context, signalling a need for more context-specific research into this domain.

On the whole, the study confirms the existence and benefits of customer loyalty in online retailing. In addition, it identifies four underlying dimensions of e-loyalty. Dimension 1 comprises behaviours commonly cited as the most prominent and beneficial indicators of customer loyalty (such as repurchase behaviour and word-of-mouth communication). Dimension 2 reflects the level of attachment that loyal customers feel towards their retailers. Dimension 3 indicates customer willingness to adjust their consumption patterns in favour of the retailer's range of offerings. The last dimension is related to customer willingness to move beyond a pure buyer-seller relationship, and to engage in partner-like behaviours (e.g., tolerating mistakes and providing feedback).

With regard to relationships between the research constructs, the SEM results confirm that service quality, web site quality, and value perception are major predictors of overall satisfaction, while trust and commitment, but not safety perception, are antecedents of relationship quality. E-loyalty is not found to be significantly affected by overall satisfaction, whereas relationship quality only has a slightly noticeable impact on this construct. The findings thus fail to support the notion that customer satisfaction and relationship quality are two major antecedents of e-loyalty. The results also do not support the speculation that satisfaction and relationship quality are the main mediators of the relationship between e-loyalty and its primary antecedents. On the contrary, e-loyalty is found to be influenced directly by customer commitment, value perception and service quality, and indirectly by Web site quality, safety perception and trust. With online shopping growing in popularity, insights into the dimensionality of e-loyalty, as well as the factors that engender e-loyalty, can provide a useful framework on which appropriate marketing strategies could be developed to enhance the loyalty of online shoppers. To this extent, findings from this research are meaningful not only for marketing academics but, also, for Internet retailers.
Degree Doctor of Philosophy (PhD)
Institution RMIT University
School, Department or Centre Management
Keyword(s) Customer loyalty
Internet retailing
consumer behaviour
consumer attitude
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Created: Mon, 31 Jan 2011, 14:30:26 EST
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