E-loyalty definition:
The online loyalty may be defined as the a deeply held intension to repurchase a preferred product or services consistently from an e-vendor in the future, despite of the presence of factors or circumstance that may include switching behaviour. Oliver (1999).According to the Sreenivasan et al, (2002), E-loyalty is defined as the customer’s favourable attitude towards the e-retailer that results in repeated buying behaviour.
Influencing customer E-loyalty factors
In this part the different factors for the online loyalty is discussed and the factors such as e-quality, e-satisfaction and e-loyalty will be analysed.
E-satisfaction:-
According to Oliver (1999) is the summary psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with a consumer’s prior feelings about the consumer experience.” A dissatisfied customer will be looking for the alternatives and more likely to acquired by the competitor than a satisfied customer. Also dissatisfied customer will be in resistive nature in the retailers loyalty programme and their negative involvement in the programmes will also influence the other customers to probe the negatives on the services (Sreenivasan et al 2003).
E-Quality:-
quality is measure from the end user analysis of assurance, responsiveness, tangibility, empathy and reliability (Parasuraman et al 1999). E-quality dimensions are occasionally considered to be causing e-loyalty directly (Sreenivasan et al, 2002). Also a large study on the e-loyalty is also confirmed tha quality dimensions are directly related to the online loyalty. Satisfaction is considered as the mediator of the quality and the loyalty, yet there is no agreement on the exact number of quality dimensions that the online users evaluates when using an e- service.(sreenivasan et al, 2002). According to the Ribbink et al, 2004, five commonly used quality dimensions are as follows
- Ease of use
- Website design
- Customisation
- Assurance
- Responsiveness
E-Trust:-
it is defined as the degree of confidence customers have in online exchanges or in the online exchange channel (Ribbink et al, 2004).trust is consistantly related to thevulnurability of the user because , without the vulnerability of the trustor upon the trustee the trust become irrelevant (Singh and Sirdeshmukh 2000) A cording to Ha(2004), the factors affecting e-trust are basically security, privacy, word of mouth, good online experience , quality of information and brand name.
Moderating role of inertia:-
According to Campbell (1997), inertia as a state where “repeat purchases occur on the basis of situational cues rather than on strong partner commitment.” According to Beatty and Smith (1987), around 40% to 60% of customers visit the same store for purchasing out of habit. In a like way, considerably most of the customers keep the bookmark facility to remember the online web page and they often visit those pages rather than searching a new provider. These cutomers visit the web page out of routine rather than not by the evaluating the perceived benefits of the business deals. When a customer has a high level of inertia the sensitivity of e-loyalty to e-satisfaction is likely to be lower and when the inertia of a customer is low, the impact of e-satisfaction on e-loyalty is seems to be higher.
Moderating Role of Convenience Motivation:-
the driving factors for the different users vary depending up on the intention of the consumers. Some customers are motivated to save money where as some other customers prime motive is to save time .Jarvenpaa and Todd (1997) found that the convenience was perceived as one of the major benefits of shopping over the internet. Comparing the internet shoppers and conventional shoppers the former was more convenience seeking than the latter (Donthu and Garcia 1999). A resurch conducted by the Burkey 1997 found that internet shoppers appreciate the ability to shop from anywhere while they are in other activities such as in office, cooking etc., customers which are more convenience oriented are less likely to replace the service that already they have and hence these group of customers are more likely to show higher levels of loyalty.For customers who are motivated somewhat by convenience more by other factors such as price seeking or information seeking, satisfaction will not have as much of an impact on loyalty because they are constantly exploring alternative service providers. However, the relationship between e-satisfaction and e-loyalty is expected to be stronger for customers with a high convenience orientation relative to customers with low convenience orientation (Anderson and sreenivasan 2003).
Moderating role of purchase size:-
in the past researchers established a relationship between the spending and the customer loyalty. Customers who are spending more money will be involving more in the purchase than the less spending customers. This is due to the increased financial risks involved in the transaction. Therefore it is expected that the heavy spending customers will b more loyal than the normal spending one.higher spending customers are more likely to be involved personally in the purchasing decision as it includes the more financial risks for the customer (Kim, Scott and Crompton 1997). The connection between e-satisfaction and e-loyalty is likely to be stronger for consumers who are heavy spenders. Conversely, because low spenders are expected to be less involved, the effect of e-satisfaction on e-loyalty is expected to be lower for them than for high-spending customers.
Moderating role of trust:-
Morgan and Hunt (1994) define trust as the “confidence in the exchange partner’s reliability and integrity.” In a similar vein, Doney and Cannon (1997) defined trust as “the perceived credibility and benevolence of a target.” One of the main reasons for the importance of trust or confidence in an online business is the perceived level of risk associated with online purchasing. According to Medintz (1998), customer concerns about security, privacy, and protection against business scams are very high and have created a market for rating agencies and seals. Providing credit card information to an online business that has no physical location increases the perception of risk for certain customers (Shannon, 1998). In the online commerce framework, the customers will not be loyal if they do not trust the service even if they are satisfied with the service offered. Therefore it is found that the increased level of e-trust increases the e-loyalty among customers.
Moderating role of perceived value:-
Zeithaml (1988) defines value as “the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given.” The importance of the perceived value emerges from the comparison of the other service provider over the internet. The low search cost of the internet has led the many customers to compare the prices and evaluate the benefits of the products or services that competitors are offering. Researchers are also established a positive relationship between the intention to purchase/ re-purchase and the online loyalty. When a customer is perceiving the low value in their business deal, they will be trying to gain more value by switching to other competitors resulting in low loyalty. The relationship between the customers and their existing e-retailer will be strong when the customer feels that they are getting higher overall value for their money comparing to other competitors (Anderson, Rolph, Srini, and Sreenivasan 2003).
Technology acceptance model.
the technology acceptance model is specific to the information system usage. The technology acceptance model was basically developed for understanding the adoption of the information technology on the job or in the work place. The TAM has been widely used in explaining the technology adoption including the WWW. (Chen Et al 2003). However Chen et al 2003 pointed out some limitation of this model because it doesn’t explain the social influences on the technology acceptance. Later a third factor enjoyment of technology, was introduced in this model to broaden the studies.
The TAM is evolved through two constraints such as Perceived ease of use and perceived usefulness of the technology. According to the Davis (1989) perceived use is the degree to which a person believes that a particular system would improve his or her job performance. While the PEOU is the degree to which a person believes that using a particular system would be free of efforts. PEOU and PU reveal the user easiness of and the task-value of the new technology respectively.
As shown in the figure1(@@@@@@@@), the behavioural intension to use is influenced by the attitude towards using and the perceived usefulness. And users attitude is influenced by the perceived ease of use and the perceived usefulness. The external variables depicts the design and support features of the system. The fundamental idea reflecting this model is the more the ease of usefulness of the system, the more it is perceived to be.
A study has shown that an individual’s perceived usefulness of online shopping does influence adoption of that shopping environment. Therefore it is presumed that if an online environment is offering a high degree of perceived usefulness, the online users are expected to adopt those retail environments.
Koufaris and Hampton Sosa (2004) stated that the usefulness and easiness of understanding the information on websites reduces the asymmetric information, processes information behaviour and it lifts the degree of online trust and positively influences the purchase intentions.
A number of studies on the perceived usefulness and perceived ease of use has lead to the system use. The suggestion on this model has been made for extending this model by adding the social factors and psychological origins of perceived usefulness.
MOTIVES TO BUY ONLINE.
Motives to buy online has been the area of research for many years, it is found that fundamentally two classes of motives are there functional and non functional.
Functional motives pertaining to the motives are as follows, one of the prompting causes to shop online is the convenience factor (Jarvenpaa and Todd, 1997). Lim and Dubinsky (2004) explain that the convenience was found to be the key aspect behind the home shopping. The convenience has been defined in terms of time and effort , both physical and mental, or in terms of the location convenience was stated by Wolfinbarger and Gilly (2001). According to Darrian(1987), Kau et al.(2003) there are five types of conveniences 1. Reduction in shopping time,2. Timing flexibility, 3.saving of physical efforts,4. Saving of aggravation, 5. The opportunity to engage in impulse buying or directly responding to an advertisement. The study also took some important constraints like parking, queuing and time required for shopping , weather the shopping is nearer to the home, store variety and the transportation .
The most of the internet shoppers are attracted by the price factor. Majority of the consumers shop online to get some sort of price benefits when comparing to the physical shopping. The online consumers expected to get a reward in terms of price for taking the risk factor involved in online shopping (Jayawardhena et al.2003). a study among the US consumers suggested that price, fun factor, and convenience are the key drivers of the online shopping. Based on these factors, a study by Brown et al. (2003) suggests that the two largest segments of the online shoppers are recreational and price oriented shoppers respectively. As a result they advised online retailers not to develop marketing strategies purely based on the convenience factor.
A study based on the non- functional motives by the Childers et al. (2001) found that the enjoyment is a consistent and strong predictor of attitude towards interactive shopping. This empirical study was based among online grocery customers. It is found that the non-functional motives can vary depending on the goal, thus the related non-functional aspects in online shopping could play a role as critical as functional aspects. at different moment the motives may vary and consumers are sometimes driven by the functional benefits while in other occasions its by entertainment motives. Also it is found that the functional motives are revealed in patterns exhibited when the consumers seek product information or the post product services, make price comparisons and engage in online purchases.
A detailed study on the online buying behaviour has been conducted by Wolfinbarger and Gilly (2001) reveals that the users can be categorised as the goal oriented shoppers and experiential shoppers.
The author shows some characteristics that are used to define both groups. For the goal oriented shoppers they include the following characteristics.
1. Convenience and accessibility: the internet allows consumers a good accessibility as a result of the technology. And it allows the users to shop anytime regardless of the time of the physical stores. It also provides the convenience to shop from the home literally avoiding the driving time to and fro to the shop. Another findings suggests that majority of the shoppers enjoy their shopping as a results of increased freedom and purchase control in the online purchases.
2. Selection: the online environment allows a wider selection and range of products than traditional stores. In traditional stores physical space constraints to display all the items is limited. The users can even find the items before required any travel to long distances, such as collection special apparel sizes.
3.Information availability:online shoppers can get information very easily than before . Before it required a lot of effort was difficult to obtain.
4.Lack of human errors : in the online environment consumers do not interact with the sales persons or any human involvement rather it is doing through the mediated environment, some online buyers appreciate this lack of human involvement , because the anonymity can be veiled and they can avoid the embarrassment produced in some of the physical stores.
On the other side the wolfinbarger and Gilly (2001) found that experimental shoppers shows the desire to have fun, and they would like to be entertained and to be active in the online stores. The experienced buyers are reckoned to buy for three reasons auctions, bargain hunting and the involvement or participation with the ongoing product classes. The authors concluded that the non functional motives are emerging on the internet and should be equally relevant to marketers for two reasons. Firstly they can draw the interest of a person towards a store or website and secondly non-functional motives can be a source of sustainable competitive advantage. If they help improve the value of the functional motives.
A recent study related to the online loyalty based on TESCO UK and NECTER by Jennifer Rowly (2005) found that the retailers are shifting the loyalty schemes. Whereas the rewards focus which has been at the core of early implementation and research on loyalty schemes concerns itself with the actual value offered to the customer through the scheme’s rewards, new models of loyalty schemes are more concerned with developing perceptions of value through brand associations and customised interactions with loyalty scheme members. The focus has now turned in to change the customer’s behaviour, to seeking to change customer attitudes. This is consistent with O’Malley’s (1998) assertion that the real opportunity for loyalty schemes is in the conversion of spurious loyalty into sustainable loyalty, or to put this another way to convert relationships based on convenience to those based on commitment.
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Perceived risk in online environment.
The studies on perceived risk have history in consumer behaviour literature. Significant changes must occur in the online retail sector in order to encourage more customers to shop online. For this to take place, the online customers should recognise that they could get a better deal on online when comparing to other traditional methods of buying (Keeney 1999). According to (Alba et al. 1997) there are four factors that might affect the customer’s decision online they are vast selection, product comparison, reliability and screening. First the internet as a technology enables the customers to have wide variety of products and services and the one of the main advantage is that it allows comparing different products and allows giving greater options to substitute the product. The reliability in the sense, it is subjected to the ratings of online users and reviews that are normally open to the users. Also the quality and price comparison helps customers to have good services than in the offline .and more over it allows the customers to shop from their homes at anytime removing the hassles of road traffics and weather (Szymanski and Hise, 2000).
However , there are also a number of factors in which the customers uncertain about the online shopping. In a number of ways the online shopping shares the characteristics of the traditional shopping, it also shares some of the disadvantages of the conventional shopping methods such as the product details are limited in the online and the customers have to rely on the limited information and the pictures shown on the computer screens to check the physical goods. Moreover, there is bound to be much uncertainty regarding system security, reliability, standards, and some communication protocols (Turban et al., 1999). All these factors increases the perceived risk of the online shopping so that the majority of the online customers are still not participated at least the one shopping online.
In order to analyse the perceived risk of the online shopping, the Tan (1999) examined the price and additional values of physical and online shopping. The results showed that the perceived risk of the online shopping is slightly higher than the perceived risk of the conventional buying. However this type of perceived risk did not describe which type of perceived risk has most affect on the consumers online shopping. With respect to the specific perceived risk, the Bhatnagar et. Al (2000) emphasised two types of the perceived risk normally occur in online purchase, they are product category risk and the financial risk. The product category risk relates to the performance of the products such as quality. Therefore it is argued that the product category risk is high with the technologically complex products or the price of the product. Whereas, the financial risk involves both the tangible and intangible assets of the buyer. this means consumers are quite worried, not only about losing certain amounts of money, but also about losing private information required in the transaction (Szymanski and Hise, 2000).
MODELS OF E-LOYALTY AND E-SATISFACTION MODELS
There are a number of models available on the e-loyalty and satisfaction. Here few models are analysed and different models will be compared
Sreenivasan’s Model
Sreenivasan et. al (2000) identifies seven loyalty factors which prompts the online loyalty. They are , customisation, contact interactivity, cultivation, care, community, choice and character. These seven factors
Customisation:-
customisation is the way of altering the product, services and transactional modes towards the individual’s requirements. Also the customisation can be viewed in a way that the web site understands the individual requirement and providing shopping experiences according to such understandings. There are different reasons why the customisation is expected to affect the e-loyalty. Customisation increases the probability that customers will find something that they wish to buy (Sreenivasan et al, 2002).
Contact interactivity:-
contact interactivity pertains to the dynamic interactions between the customers and the website while they are online. Also the interactivity is also defined as the availability and effectiveness of the customer support tool on a website, and the degree to which two way communications with the customers is facilitated. Contact interactivity is expected to have a major impact on customer loyalty for multiple reasons (Sreenivasan et al 2002). According to Alba et al. (1997), interactivity enables a search process that can quickly locate a desired product or service, thereby replacing dependence on detailed customer memory. By eliminating the use of the customers memory through the interaction the e- retailers can increase the perceived value of the customers in the business transactions. Also the interactivity can dramatically increases the information delivered to the customers online than in the conventional shopping such as product reviews and recommendations from the other customers (Watson et al 1998). Finally the level of navigational control dramatically increases the interactivity and the freedom f choice of the customers experienced (Hoffman and Novak, 1996).
Care:-
care is operationally defined as the extent to which a customer is kept informed about the availability of preferred products and the status of orders, and the level of efforts expended to minimize disruptions in providing desired services (Sreenivasan et al, 2002). Several researchers have established the negative impact of breakdowns in service on customers’ repeat purchase behaviour (e.g., Bitner, Booms, & Tetreault, 1990; Boulding, Kalra, Staelin, & Zeithml, 1993; Kelley, Hoffman, & Davis,1993; Rust & Zahorik, 1993). Therefore the level of care in a company to minimise the disruptions in customer service will help to gain the customer loyalty.
Cultivation:
Cultivation is the extent to which an e-retailer provides relevant information and incentives to its customers in order to extend the breadth and depth of their purchases over time Berger (1998). Also, cultivation is operationally defined as the frequency of desired information and cross-selling offers that an e-retailer provides to customers. By actively cross selling its products, a firm can provide customers with useful information that would be cumbersome to obtain otherwise. For example, Amazon.com reaches out to its customers with offers on books related to their past purchases whenever there is a discount sale on items of that are similar to items previously purchased by them. An additional benefit of such cycles of stimuli and responses is that the retailer’s knowledge base regarding the customer is continuously enhanced, lessening the customer’s incentive to defect to another seller who has to build such knowledge from scratch. Further, with such initiatives, an e-retailer can proactively diminish the likelihood of additional search by customers (Sreenivasan et al , 2002)
Community:-
A virtual community can be described as an online social entity comprised of existing and potential customers that is organized and maintained by an e-retailer to facilitate the exchange of opinions and information regarding offered products and services. This virtual community may be operating by the retailers or by the potential consumers. There are several reasons why a community could potentially affect customer loyalty. By facilitating this informational exchange among customers through the community, an e-retailer can further increase e-loyalty among its customers. In particular, some customers may remain loyal because they value the input of other community members, and others may be loyal because they enjoy the process of providing such input to the community (Sreenivasan et al 2002)
Choice:-
Compared with the physical stores the online retailer can offer more product categories and a greater options within a given range of products or services. The physical store has so many constraints such as floor space and its availability depending on the physical locations, where as the online retailers doesn’t have such problems. Also they do alliances with the similar providers to provide more verity to the customers. To illustrate, an e-retailer normally keeps the limited products as the inventories and forms alliances with the manufacturers so that they can ship the products to the customers of the e- retailers from their own reducing expensive inventories. However, the customer
Has seamless access to the entire range of products carried by the alliance from the e-retailer’s website. The e-retailer that offers greater choice can emerge as the dominant, top-of-mind destination for one-stop shopping, thereby engendering e-loyalty (Sreenivasan et al 2002).
Character:-
Creative web site design can help an e-retailer build a positive reputation and categorization for itself in the mindsets of the consumers. Character can be defined as an overall image or personality that the e-retailer projects to consumers through the use of inputs such as text, style, graphics, colours, logos, and slogans or themes on the website. Charechter is particularly important because web sites can be rather impersonal and boring to deal with in the absence of the person-to-person interaction that pervades conventional brick-and-mortar marketplaces. Beyond general presentation and image, websites can use unique characters or personalities to enhance site recognition and recall. (Sreenivasan et al 2002).
Model of Ribbink
According to Ribbink et al 2004, which investigate the role of customer evaluations of electronic service and e-loyalty in explaining the customer loyalty to the online retailers. More specifically a mediating role of e-trust and e-quality was modelled.
Moreover the prime aspect of the current study was to investigate the role of the customer evaluations of electronic service and e- trust in explaining customer loyalty to online retailers. To be more specific, a mediating role of e- trust between e- quality and e- loyalty was modelled. The e- trust is very difficult to control directly in the management perspective, since it evolve from the multiple interaction between the different e- service providers, brand values and technology used. In an online environment the assurance dimension of the service quality can easily be controlled by the e- tailor with the robust quality control agencies such as VeriSign label. Therefore the companies can increase the e- loyalty by improving the assurance dimension of the web site (Ribbink et al 2004). The Ribbinks’s model is given below
Model of Anderson
In the current technological outburst, many customers are expecting more from the e- tailors in terms of the products and after sales services. So, many companies increasingly eager to nurture, understand and in keeping their profitable existing customers. in particular there is a strong and growing interest in pushing beyond the technological factors of conducting an online business to a better understanding of the behavioural dimensions. Typically the e- satisfaction is considered to be the natural antecedent to the e- loyalty (Anderson and Sreenivasan, 2003).
This research reveals that the impact of e-satisfaction on e-loyalty can be significantly moderated by individual level variables (inertia, convenience motivation, and purchase size) and company level variables (trust and perceived value) (Anderson and Sreenivasan, 2003).
In fact, many customers evaluate the range of benefits to be obtained from a particular deal versus the perceived cost of that transaction to come out at an overall perceived value. In the long run, customers may also look at the perceived value of continuing a business relationship with their current provider versus the perceived benefits and costs to switching to another e- retailer. Thus, to remain competitive, an e- retailer must work continuously to enhance the perceived value for customers to discourage the switching to another retailer. Customer expectation may continue to rise during the period, so the no company can sit idle in providing the highest perceived value to the customers. Building trusting relationship is even more difficult challenge as this involves many financial constrains (Anderson and Sreenivasan 2003).
Figure( anderson’s model)
Rodger’s Model
Rodgers suggests that there are different quality dimensions that influence the online loyalty such as information quality, system quality and service quality. (Rodgers et al 2005).
System quality:- system quality service that its measure captures ease of access and interaction with the computer systems (Rodgers et al 2005).
Service quality:- the typical service quality dimensions include five dimensions of end user service such as reliability, assurance, tangibility, empathy, responsiveness (Parasuraman, Berry and Ziethmal 1991).
Information quality:- represents the quality of the information provided by the online service. Its measures include the timeliness, currency, convenience and entertainment of the information (Rodgers et al 2005).
Figure.
Model of Gummerus:-
It’s quite obvious that the trust enhances the satisfaction and trusting an e- tailor means the customer will anticipate in receiving the promised service with a reduced level of risk than the other providers. Since the trust is based on the overall quality of the site, managing all quality factors- need fulfilment, security, responsiveness, and website’s technical functionality- is crucial for the online loyalty ( Gummerus al 2004).
The key findings from the Gummerus are given below,
Need fulfilment:-is the strong object for the trust and satisfaction. This is not astounding because it measures the degree to which the customer’s needs are fulfilled for. Service customisation has often been limited to elaborate the technical systems to produce individualised web pages and personal service. However the present study demonstrates that perceived customisation is more than a result of applying the tools. When customers feel that they are part of the company’s target group and their needs are being fulfilled, their satisfaction will increase. This emphasise the importance of customer orientation and implementation of customer segmentation in customer acquisition and relationship maintenance (Gummerus et al 2004).
Security:- security is in the form of keeping the customers privacy from the others. Keeping the promises regarding the security or private information is related to the satisfaction and companies need to keep their promises regarding their privacy. The unexpected violation or losing the privacy will results in the bad word of mouth among the customers (Gummerus et al 2004).
Assuring security is especially important to services that require the customers to provide their personal data in order to provide the required services. Also customers are extremely cautious in giving their personal details and the e- tailors should also measure the benefits of customisation in collecting the data against the psychological costs to the customers, at least they should be allowed to out (Gummerus et al 2004).
Responsiveness:- a quick response to the services will increases the perceived convenience and diminishes the uncertainty. And it is an important way for the retailers to show they are customer oriented and act compassionately to the customers. Therefore it is key to gain the trust. Understanding the customer requirements and develop the services based on the customer requirements enhances the service satisfaction. (Gummerus et al 2004).
User interface:- the technical functionality of the user interface often predicts the technical reliability of the website and thus the high reliable website increases the trust on the service provider and make the web surfing effortless. Whereas the low functionality probes the mistrust on the service provider. Moreover the finding found that the level of the web site’s usability has not any impact whatsoever on trust, satisfaction and loyalty (Gaummerus et al, 2004).