New research by Durham University Business School says that if online retailers want to build customer loyalty, they should focus more on the customer experience rather than efficiency when designing their websites.
The researchers say that today’s online customers crave more than convenience and a smooth shopping experience; they seek one that is immersive and interactive.
Professor in Marketing and International Business at Durham University Business School Markus Blut said the study seeks to understand the shifts in online retail and whether customers value an efficient shopping experience or a more immersive and interactive shopping experience.
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, using an analytical model, the researchers divided each website attribute into an efficiency or experience category and tested whether these had built customer loyalty.
They found that, though having an efficient website keeps customers content, an experience-focused website is more directly likely to build customer loyalty among 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 and value and satisfaction with the service. However, this only keeps customers loyal if it continues to 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 customer’s loyalty, as consumers who enjoy shopping with the online retailer will return. This is something that simply focusing on efficiency cannot recreate.
Blut said: “With consumers increasingly likely to suffer online fatigue, it’s becoming harder to grip their attention and truly captivate this audience. 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 must be offering them an immersive experience”.
Though having a basis of good quality service is still important, the researchers highlight that this alone is no longer a differentiator for an online retailer. Companies need to focus on a high level of service and a high level of consumer experience.
This research was conducted alongside colleagues from Sheffield University Management School, Vrije Universiteit Amsterdam, Darla Moore School of Business, Babson College, University of Bath, and Tecnológico de Monterrey. It was published in the Journal of Retailing.
