An analysis of operations‐oriented drivers of customer loyalty for two service channels

Abstract

PurposeThis study examines customers of grocers who provide both online and traditional in‐store options to determine if there are substantial differences in customer's perceptions of service quality, product quality, product range, and sacrifices made when using a specific channel. By better understanding customer preferences, firms can appropriately match strategy and market expectations.Design/methodology/approachData were gathered from 271 traditional in‐store customers and 1,720 online customers from three grocers. Survey results from these two groups was analyzed using regression analysis consisting of independent variables measuring the sacrifices of using a given channel, and the quality of service, products and product range and dependent variables of behavioral intentions and percent of business given to the grocer.FindingsOnline customers have a higher level of satisfaction with their service encounters, but lower levels with the tangible aspects of product quality, range of products available and channel usage sacrifices. They also spend a larger portion of their grocery “wallet” with the grocer and are less price sensitive than their in‐store counterparts.Practical implicationsOnline customers place a premium on convenience and will spend more with firms that meet this need. Given the very low profit margins in this industry, the ability to draw and retain these customers is vitally important.Originality/valueThis study presents one of the first direct comparisons of customers who use two different channels from the same grocery provider to examine customer perceptions for improved strategic service and product delivery.