TOWARD ACHIEVING CUSTOMER SATISFACTION IN ONLINE GROCERY SHOPPING

By | February 9, 2018
INTRODUCTION

 

The advance of the Internet technology has enabled businesses to easily reach consumers in dis- persed geographical locations. Despite some concerns with security issues, the use of online shop- ping has been increasing in the last few years (Australian Retailers Association 2000, Park et al. 1998, Morgan 1998). An Internet business application that has received much attention in the last few years is online grocery shopping (Morganosky and Cude 2000; MSNBC News 2004). Con- sumers can purchase grocery products anywhere, any time, and the products can then be deliv- ered to or picked up by the purchasers (Ellis 2003). Despite the failure of the first few online grocers around the world—Webvan, Publix Super Markets, and ShopLink, to name a few—online grocery shopping is projected to experience a significant growth in the next few years (Allen and Fjermestad 2001, MSNBC News 2004, Anonymous 2001).

Online grocery shopping has many potential benefits to consumers, particularly in terms of convenience and time saving (Park et al. 1998, Anderson et al. 2000, Barnett and Alexander 2003). Convenience and time saving have become important issues for consumers in grocery shopping, since there have been more women participating in the labor force, more dual-in- come and thus higher-income households, and more single-parent and elderly households with

 

various resource constraints (Park et al. 1998; Turner 2001). Thus, online grocery shopping enables consumers to avoid typical problems of traditional shopping such as searching for a parking space, looking for products on frequently changing store shelves, failing to obtain assistance from the staff, particularly in specialty departments, and standing in a long checkout line (Anderston 2001; Pastore 2001). Retailers will also reap significant benefits, since online grocery shopping will lead to more efficient use of personnel, simplification of building infra- structure, lower costs, and more rapid gain in profitability (Pastore 2001; Australia Retailers Association 2000; Slonae 2000). In addition, through the establishment of long-term relation- ships with customers, there is an opportunity for online retailers to enjoy a stable cash flow (Allen and Fjermestad 2001). Therefore, online grocery shopping has been an attractive retail channel in many regions, notably the United States, United Kingdom, Europe, and Australia (Schuster and Sporn 1998; Morgan 2000; Morganosky and Cude 2000; Ellis 2003; MSNBC

News 2004).

While it may look easy for supermarkets or other grocers to offer online grocery shopping service facilitated by the Internet, many factors need to be addressed carefully for successful operation of an online business (Anderson et al. 2000; Van der Heijden 2000). Besides issues related to business models, value proposition, and organizational set-up, one of the most impor- tant factors is the overall design of the Web site as the primary interface with the consumer in online shopping. Consumers need to feel comfortable and confident with the online systems, from getting the information about the products, ordering, paying, tracking to receiving the prod- ucts (Barnett and Alexander 2003; Freeman 2003). Nevertheless, in general, few Internet mer- chants have ever tried to assess their Web sites from a consumer perspective to reveal weaknesses and initiate improvements. This may contribute to some failures reported in the literature (see, for example, Mahajan and Srinivasan 2002; Helft 2001; and Bulkeley 2004). It is therefore crucial for supermarkets or any grocers wishing to offer a successful online service to recognize the importance of the overall design of Web sites that facilitate online grocery shopping. Poorly designed Web sites may help account for the slow uptake of online grocery shopping in many regions (Schuster and Sporn 1998; Kutz 1998; Kurnia and Chen 2003; Kurnia 2003). Given the fact that grocery products, particularly fresh items such as fruit and vegetables, have attributes that can be discovered only through the senses, online grocers face many challenges in achieving a desirable level of customer satisfaction (Cho et al. 2003).

Despite the failures of early online grocers in the late 1990s, there has been a significant growth in the online grocery industry, particularly in the last two years. Various online retailers have been established around the world, including Australia and Switzerland. Although only six online grocers were assessed in this study, Alexander and Barnett (2004) identified 40 online grocers across Australia. In the United States, many online retailers such as Safeway Inc., Albertsons Inc., Peapod LLC (Chicago and the East Coast), and Freshdirect.com (New York) have experi- enced a tremendous growth in their online business with an increasing number of customers and are expanding their business coverage (MSNBC 2004). This indicates that the market for online grocery shopping exists and that it has the potential to grow.

Although it is believed that online grocery shopping will not take over the overall market, as it will make up only a very small percentage of the overall business, the annual growth expected from online shopping is significant for retailers (MSNBC 2004). In order to survive and grow, it is crucial for online grocers to increase customer satisfaction with online grocery shopping, since customer satisfaction will lead to increased customer loyalty and the ability to attract new cus- tomers (Cho et al. 2002). This is consistent with the view that the commercial environment has shifted from a transaction-based to a relationship-based economy (Romano and Fjermestad 2003).

 

Therefore, online grocers also need to manage their relationships with customers, which they can do in each phase of the business transaction.

In this chapter, we demonstrate the usefulness of evaluating online grocers’ Web sites based on the perception of consumers in order to identify their strengths and weaknesses. Various online grocers’ Web sites in Australia and Switzerland were assessed using the Extended Web Assess- ment Method (EWAM) tool. The current tool was developed at the University of Applied Sci- ences Basel in Switzerland and is now widely used in research, teaching, and consulting (Schubert 2003). Since the assessment was based on consumers’ expectations, and on strengths and weak- nesses identified in each phase of the market transaction, it can be used by online grocers to design strategies that can improve customer relationship management. Our objective is to assist practitioners to develop better online shops in the grocery sector in order to promote the growth of online grocery shopping through increased customer satisfaction (Cho et al. 2002). Using the framework proposed by Allen and Fjermestad (2001), we systematically discuss some lessons learned from this study in terms of product, place, price, and promotion.

In the next section, we provide a basic description of the EWAM tool, including the theoretical background and data collection and analysis procedures. We then describe the Web assessment conducted in this study and present selected findings. Finally, we present a comparative analysis, discuss some lessons learned, and draw conclusions.

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