Online retailers should focus more on the experience of customer’s using their website, as opposed to efficiency if they want to build customer loyalty, according to new research.
According to the researchers, today’s online customer craves more than just convenience and a smooth shopping experience; they seek one that is also immersive and interactive.
Conducted by Markus Blut, Professor in Marketing and International Business at the School, alongside colleagues from Sheffield University Management School, Vrije Universiteit Amsterdam, Darla Moore School of Business, Babson College, University of Bath and Tecnológico de Monterrey, the study seeks to understand the shifts in online retail, and whether customers valued an efficient shopping experience, or a more immersive and interactive shopping experience.
To do so, the researchers analysed a database that taps into more than 20 years of website attribute effects, covering almost 120,000 consumers over 25 different countries.
Then, by using an analytical model, the researchers divided each website attribute into either an efficiency or experience category and tested whether these had built customer loyalty.
The researchers found that, though having an efficient website keeps customers content, it is an experience-focused website that is more directly likely to build customer loyalty within consumers. Some differences exist depending on the offered product and country culture; experience-focused websites are relatively more impactful for services (vs. products) and in country cultures with long-term (vs. short-term) orientation and high (vs. low) self-indulgence.
The researchers say that efficiency helps to build trust with consumers, as well as value and satisfaction with the service, but this only keeps customers loyal if it continues to always be the case – it does not breed loyal customers.
However, providing an immersive experience on the website is more likely to have an immediate, direct impact on the loyalty of the customer, as consumers who enjoy shopping with the online retailer will come back again. This is something that simply focusing on efficiency cannot recreate.
“With consumers more and more likely to be suffering online fatigue, it’s becoming harder to grip their attention and truly captivate this audience,” says Professor Blut.
“Online retailers like Amazon have certainly had success by offering a good, efficient service, but this is something smaller online retailers will not be able to compete with. If they want to secure a loyal following, they have to be offering them an immersive experience”.
Though having a basis of good quality service is still important, the researchers highlight that this alone is not a differentiator for an online retailer anymore. Companies need to focus on both a high-level of service, but also a high-level experience for consumers too.
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