Introduction
In 2018, Thailand ecommerce or online shopping become aggressively growing even higher and intense since Thai consumer’s behaviour changed. The recent report from We Are Social and Hootsuite reveals that the number of internet users in Thailand has rapidly increase at 21% compared to the previous year and more hour spent on internet at the average time of 9 hours per day. Meanwhile, the number of Thais online shopper has steadily increase as 12.1 million consumer are expected to make online purchases this year (Statista, 2018). Additionally, this number is forecasted to grow by 15% and reached 13.9 million of online consumer in 2021. Generally, it is projectived every four of five people will shop online within the next 5 years.
According to Ecommerce IQ report, the highest Thais spender in online shopping are the generation Y, average age of 25 -34 years, which is 4.4 million online shoppers. As the consequent, most of the trader and business take this online channel as the opportunity to expand their market even the traditional business as Thai traditional heritage dress and clothing has use this online channels to grow their sale.
By adjusting the business itself with the consumer behaviour, many business have develop their marketing strategies to satisfied the customer by combining both offline and online store to acquire the optimal benefits from this opportunity. In 2017, the revenue in Thailand online fashion industry is £398.6 million which is the second highest purchased product category (Statista, 2017).
This significant number of online shopper has cause the intense of competition in online market. Therefore, customer loyalty is the essential factor that the business need to concerned with as it helps the business to survive in this high competitive market by maintaining and building the loyalty relationship among its consumer.
According to Duffy (1998), most of the companies in every industry are implementing and studying on loyalty strategies in order to create the strong relationship between them and their consumer.
Since the consumer’s behaviour was change, people prefers for online shopping rather than visit the actual store, therefore, the company need to switch from traditional marketing strategy approach to the modern relationship marketing approach to achieve optimal advantages (Donaldson & O’Toole, 2007).
This research conducts in the purpose of investigating the impact of customer loyalty toward the online shopper in the area of Thailand fashion industry. Meanwhile, this research is examining the influence satisfaction, trust, and commitment on customer loyalty in this online era as the changing behaviour of the consumer.
2. Literature Review
This chapter is focusing on the studies and literature reviews that could be useful in supporting the research objectives and research aims which included customer value, customer engagement, and branding that would lead to customer loyalty.
E-commerce
Generally, electronic commerce or ecommerce is a commercial transaction process of buying selling, transaferring, or exchanging the product and service between the organization and customer through online by using the electronic networks and computers as a medium.
Customer Perceived Value
The essential factor that the company in clothing industry need to be concerned with is the customer value as it is the core context that would help the company move beyond its competitors by provided the optimal benefits to the customer. Customer value is the exchange between what the customers obtain from the product and what they have to give in order to own it. Additionally, it is based on assessments of the costs and benefits of a given market offering in a particular customer application.
Customer benefits
The satisfaction of the customer needs and the benefits that they obtain from the purchased product and service that included functional and psychological benefits. There are 4 main benefits in this approach which are product, service, personnel and image benefit.
Customer costs
Customer costs refers to the use of customer resources in order to get the product. Also, it is the customer’s expectation to incur the cost in evaluating, obtaining, using, and disposing of the product or service offered by the market.
Brand Image
The impression of the product or brand in the minds of customer that reflects personality of the brand. Brand image is developed over time through advertising campaigns with a consistent manifestation or themes, and is authenticated through the consumers' direct experience. Consequently, if people perceived positive brand image, it will lead to perceived the value of the brand.
Customer engagement
This refers to how the business and customer engaging with a strong relationship. The company need to encourage its customer to interact with the brand in order to shared the experience that the company created for them as a business or brand. A strong customer engagement strategy could lead to the growth of the brand and loyalty by focus on creating value to the customer and offer something meaningful which beyond the sale pitch.
Satisfaction
Customer satisfaction is significantly lead to customer loyalty as satisfied customer possess stronger repurchase intention and tends to comeback for the firm that meet or exceed their expectation. Furthermore, it is very important that the company should understand their customer’s perception as the degree of a customer’s positive feeling toward the firm could reflected by this level of involvement.
Commitment
The high satisfaction level provides the repeated positive reinforcement of the customer which creating commitment and loyalty. Customer commitment is defined as the customer’s desire to maintain and continue their relationship with the firm which the relationship is benefit for both parties in long term. Commitment, the most important attitudinal measure, is a significant indicator of loyalty, as it represents an emotional or psychological attachment to a brand within a product class.
Trust
Trust is the key in forming the transactional relationship (Reichheld, 1994). In the context of online, online customer are exposed to more uncertainties and risk as it is not directly and physically observing the product or having a face to face talking with the shop personnel. Therefore, it is essential for creating loyalty in online service as this perceived as high level risk transaction because it required sensitive personal information to make the purchase such as credit card number.
Customer loyalty
The customer loyalty will occured when the customer consistently hold positive emotional experience, satisfied on physical attribute, and perceived value of experience with the product or service. Additionally, these people choose to buy product or service from particular company that they satisfied and feel comfortable with, rather than buying the product made by the other companies or brands. Furthermore, customer loyalty benefits to the company as it is less expensive to retain existing customer than finding the new ones. Loyal customers are more likely to generate positive word of mouth as they are satisfied with past service experience and this creates a potential viral marketing without paying for the advertising cost.
3. Conceptual Framework
4. Justification
Business Justification
Normally, ecommerce report in Thailand shown just sales volume and product categories, but it is still lack of specific research about the factors that influencing the online customer loyalty. Therefore, this research has conduct in the purpose of supporting the online business for further strategy development in retaining the customer.
Personal justification
According to the fashion industry in Thailand, there are many brands that offer online shopping to support the current trend of customer purchasing behaviour. Therefore, it is interesting to study about the growing of ecommerce and how it impact the customer loyalty. Also, what are the key factors that influencing consumers loyalty toward online shopping in Thailand. Moreover, it can be applying in the future career and it is an opportunity to gain a new information as a knowledge.
5. Research Aims and Objectives
To examine the influence of customer satisfaction, trust, and commitment as primary factor for customer loyalty in the area of fashion ecommerce in Thailand.
To explore the keys factors that creating the value in customer minds and engagement with customer via online platform.
To assess the outcomes of changing in customer behaviour that rather visit online store than the physical store and how that outcomes impact the customer loyalty.
To explore the effective online marketing strategy in order to retain existing customer.
6. Research Methodology
6.1 Research Strategy and method
Descriptive Research
In this study, the descriptive research will be applied as the study making in the purposes of describe and explain the customer behaviour, factors influencing customer loyalty, and effective online marketing strategy.
Quantitative Research
The data will be collected in the quantitative research method to statistically generate outcomes of the hypotheses. Moreover, the study will collect data from a large sample in a standardized form of survey, then analyzes and interpret the data by using statistical techniques.
Data Source
Primary research: Survey
Survey allows the researcher to quickly gather the large and significant information from the target population and relatively low cost (Powell & Connaway, 2010). Additionally, it helps to identify the heys influence factors that drive customer loyalty and obtain depth understanding of customer’s behaviour toward online shopping in clothing.
Secondary research: Thailand ecommerce annual report
The annual report of Thailand ecommerce will be included as a secondary data which help in supporting the credibility and reliability in this research. Also, the data could be useful in explaining their usage of digital platform which reflects current customer behaviour toward online shopping.
6.2 Sampling Group
The target population in this study has segmented into 3 criterias as following:
Geographic segmentation:
Thai residents who live in Bangkok as it is the primary marketing of ecommerce in Thailand (Thailand National Statistical Office, 2015).
Demographic segmentation:
According to Ecommerce IQ report, the highest online spender in Thailand is the generation Y, average age of 25 – 34 years, which is 4.4 million online shoppers from both male and female.
Psychographic segmentation:
People who are more likely to purchase their fashion stuff and clothing from online store.
6.3 Sampling Size
To appropriately determine the sample size, the sample size formula (Krejcie & Morgan, 1970) has been used to calculate the possible sample size in the quantitative research. By assuming the confident level at 95%, with the number of target population at 4,400,000. With the margin of error at 5%, this could lead to an estimated sample size of 385 respondents.
6.4 Sampling Technique
This research will be conduct by the non-probability sampling technique in which the process of gathering the samples does not give the equal chances of being selected. Additionally, this study also applied convenience sampling technique as the sample are picked only on the basis of convenience in terms of availability, reach and accessibility. Nevertheless, the sample should be able to give the optimal information about those subject under the investigation which could be useful and meet the purposes of this study. In addition, the 385 questionnaire will be distribute through online to reduce the financial and time cost. Furthermore, the pilot test of 10 questionnaire will be tested to improve and develop before launching the full scale.
6.5 Data Collection and Analysis
The data will be collected from online questionnaire distributed. The survey data will be coding into numeric value and processing into statistically computer program, SPSS, that allow the researcher to analyse and interpret data into the meaning. In addition, SPSS could generate the findings between 2 or more variables which could be useful to get the optimal answer. Moreover, it shows the correlation and regression analysis when finding the positive and negative relationship between 2 variables.
6.6 Limitation
By using the convenience sampling technique, the samples might trying to finish the questionnaire by not carefully read and understand the question. Thus, the survey questions should keep short and easy to understand which lead to an uncover of some issue that need to examine for the ecommerce.