Integration of Retail Multi-channel and Customer Loyalty

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Integration of Retail Multi-channel and Customer Loyalty

Introduction

Research Background

Sehgal Vikram, (2010), Forrester Research Online Retail Forecast •  The e-commerce has changed the retailing market dramatically. •  The online retail sales grows faster than all retail sales, and the

population of online shoppers increases sharply.

•  The competition among the traditional retailers is getting more serious. Since the multi-national retailers expand all over the world, the competition among them is not just limited in their domestic markets

Jesse W.J. Weltevredena, Ron A. Boschmab (2008) •  Most tradition retailers have implemented the Internet strategy to start their

on-line shopping business. •  The multi-channel strategies give companies an opportunity to obtain

additional revenue from their existing customers who purchase from their other channels.

Research Background: On-line VS Off-line Grewal, Iyer, and Levy (2004) •  Online shopping involves no travel, product carrying or restrictions on

shopping hours, offering greater accessibility, convenience and time saving. But online shopping does not permit physical examination of the products, interpersonal communication or instant gratification, and often incurs shipping and handling costs.

•  In contrast, offline shopping allows physical examination of the products, interpersonal communication and instant gratification, but involves high travel costs and search costs, and often has restrictions on shopping hours, especially in countries with strong labor laws.

Tobias Kollmann, Andreas Kuckertz, Ina Kayser (2012) •  A higher convenience orientation, a lower risk aversion, and a lower service

orientation were statistically significant shopping motives to purchase a product through the online channel.

Jesse W.J. Weltevreden, Ron A. Boschma (2007) •  Traditional retailer has a well-established brand identity and a network of

physical stores on which they could draw to establish their presence online. They have advantages over virtual retailers when adopting multi-channel strategy.

Constraints for expanding to multichannel •  Consumer access to Internet •  Operation difficulties of integration •  Costs of multichannel offering

Challenges in crafting multichannel strategies: •  Organizational Structure •  Data Integration

Opportunities for Synergies Across Multichannel •  Cross-channel customer communication and promotions •  Leveraging cross-channel information and marketing research from each other •  Cross-channel price comparisons •  Digitization •  Shared common physical assets and operations.

Research Objective

•  Consumer Analytics •  Evaluation and Performance Metrics

The relationship between retail multi-channel integration and its performance The relationship between performance of firm and customer loyalty

Research Model

Retail multichannel integration capability

Customer Loyalty

Retail cross-channel Operation Competence

Evaluation of multichannel integration

Supply Chain Integration

Organization Structure

Cross-channel Human Resource Capability

H1

H2

H3

H4

H5a

H6

H7

H5b

IT-using Retail Multichannel Integration Capability

Jesse W.J. Weltevreden, Ron A. Boschma (2007) •  Synergy multichannel strategy: there are strong linkages between the

website and the physical outlets

Nada R. Sanders (2007) •  Firm use of information technologies has a direct and positive impact on

organizational performance. The use of IT impacts performance both directly and indirectly, mediated by inter and intra-organizational collaboration.

IT-using retail multichannel integration capability: a firm’s ability to use IT in integrating their cross-functional channel resources and operations in their service delivery system. (Lih-Bin Ol. etc, 2012)

Several multichannel integration aspects are identified: •  Integrated promotion •  Integrated transaction information management •  Integrated product and pricing information management •  Integrated information access •  Integrated order fulfillment •  Integrated customer service

Supply Chain Integration Sarv Devaraj, Lee Krajewski, Jerry C. Wei, (2007) •  Through adoption of e-business strategy, technologies might support customer

integration and supplier integration in the supply chain, which in turn might positively impact operating performance.

Nada R. Sanders, (2007) Companies use IT to integrate its supply chain, and result in comprehensive set organizational benefits. •  Integrated inventory management •  Integrated supplier management •  Integrated delivery management

H1: A higher level of integration across multiple retail channels with the use of IT has positive impact on its supply chain integration.

Retail multichannel integration capability Supply Chain Integration

H1

Retail Cross-channel Operation Competence Retail cross-channel operation competence: the ability of a retailer to offer service through its multiple channels.

Agatz et al., 2008; Barnes et al., 2004 •  As a result of channel integration, firms can provide more personalized information

and differentiated services as well as a greater range of products through multichannel.

H2: A higher degree of integration across multiple retail channels with the use of IT will increase the ability of retail firms to improve their current operations and enhance its ability to provide new service cross the multi-channel.

H3: The integration of retail’s supply chain has positive impact on its cross-channel operation competence.



Supply Chain Integration H1

H2

H3

Cross-channel HR capability & Organization structure

H5a/b： The effects of IT-using retail channel integration on cross-channel operation competence and supply chain integration will be moderated by retail’s organization structure.

H4: The effects of IT-using retail channel integration on cross-channel operation competence will be enhanced by a higher level of cross-channel human resource capability.

Cross-channel human resource capability: a firm’s ability to build talented staff that can operate effectively in supporting channel integration activities.

Organization Structure: a framework in which a firm’s different sectors are organized. •  Centralization •  Decentralization



Supply Chain Integration Organization Structure


H1

H2

H3

H4

H5a H5b

Customer Perceived Service & Customer Loyalty

Kumar & Venkatesan, 2005; Neslin & Shankar, (2009) •  Customers who shop across multiple channels from a firm are more loyal

and more active than other customers.

Shuiqing Yang , Yaobin Lu , Ling Zhao, Sumeet Gupta, (2011) •  Customers’ perceived service quality of an offline channel will have a

positive impact on their perceived service quality of the firm’s online channel.

•  Customers’ perceived entitativity between the offline channel and the extended online channel has a positive impact on their perceived service quality of the extended online channel.

•  Customers’ perceived service quality of the extended online channel will have a positive influence on their intention to use extended online channel, which means their loyalty to the multichannel.

H7: a higher level of customers’ evaluation of multichannel integration will increase customer loyalty to the retailer.

H6: the retail cross-channel operation competence will impact customers’ evaluation of retail multichannel integration positively.


Customer Loyalty


Evaluation of multichannel integration

Supply Chain Integration

Organization Structure


H1

H2

H3

H4

H5a

H6

H7

H5b

Customer Perceived Service & Customer Loyalty

Research Method

Data Collection Context: Retail firm with both physical store(s) and an online shopping website Survey & Interview 1.  Several Retail firms’ employees and managers 2.  Customer using multichannel retailers •  Integration capability •  Supply Chain Integration •  Firm Competence •  Customer Evaluation of Integration •  Customer Loyalty

Discussion

Integration of Retail Multi-channel and Customer Loyalty

Documents

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