Table of Contents1. Introduction..................................................................................................................................1

1.1. Market Situation...................................................................................................................2

1.2. Research Significance and Problem Statement....................................................................3

2. Literature Review and Relevant Theories...................................................................................3

2.1. e-Service Attributes..............................................................................................................4

2.2. Consumers’ Satisfaction.......................................................................................................5

2.4. Behavioral Intentions............................................................................................................5

3. Research Design and Method......................................................................................................6

3.1. Framework and Hypothesis of the study..............................................................................6

3.2. Population and Sampling......................................................................................................7

3.3. Instrument for data collection...............................................................................................7

3.4. Analysis of the data..............................................................................................................7

4. Time Plan.....................................................................................................................................8

References........................................................................................................................................9

Appendix A....................................................................................................................................13

Appendix B....................................................................................................................................14

Appendix C....................................................................................................................................15

1

Consumers’ Behavior towards Online Grocery Shopping: An Investigation of e-retail service context in the UK

1. Introduction In last two decades, diffusion of internet in the retail industry has imposed certain implications

for the e-retail managers and online business practitioners. Retail managers have paid strategic

attention to online channels of the retail market in order to cope up the crucial demands of the

consumer goods particularly in the grocery industry (Hansen, 2005), where consumers have

adapted the habit of online searching and/or buying in their routine shopping (Srinisvan, et al.,

2002). The increasing intensity of online shopping has grabbed the attention of marketing

theorists and e-retail practitioners to go across the conventional web stores (Lee and Lins, 2005)

and come up with the innovative and quality oriented web layouts (Siddiqui et al., 2003) in order

to manipulate the satisfaction level and to gain positive change in the behavioral intentions of the

consumers (Kim and Forsythe, 2010). These innovative and quality oriented web layouts contain

several service attributes such as consumer convenience, safety, enjoyment, low price and so on,

that reciprocally provides online shoppers a holistic virtual shopping environment to fulfill their

ever demanding desires (Kim et al., 2007). The core interest of the current research is to study

the UK online grocery market, by exploring the theoretical dimension of e-retail service quality

that has certain influence on the consumers satisfaction level; and up to what extent this element

of satisfaction in consumers’ mind generate changes in their behavioral intentions.

Consumer perception is a critical element in the behavioral studies, Schifman and Kanuk

in their book consumer behavior (2006) defined this cognitive process through which individual

selects, organizes, and interprets stimuli into a meaningful and coherent picture of the world. The

cognitive process of the consumers evaluates the e-service offerings of the online grocery

retailers and develops certain perceptions against grocery websites. In today’s web oriented

world, shoppers search several products on the internet before buying and among consumers’

goods a very common thing to buy is grocery (Hansen, 2005). It is crucial for the grocery e-

retailers to understand the consumer perception about the websites’ service quality that has

certain impact on the consumers’ satisfaction and, ultimately, on their behavioral intentions. The

usage of internet to search products conveniently and at the cheaper rate is quite common among

2

the consumers (Mintel, 2009), yet a big number of consumers feel reluctant to do grocery

shopping online (Kim and Forsythe, 2009). This research impetus the effect of service quality

attributes on the online grocery shoppers and up to what extent these attributes manipulate the

consumers’ satisfaction and behavioral intentions.

1.1. Market SituationStudy published by Mintel in 2009 averred that UK online retail market has come up with a

significant growth volume in the year 2008 (presenting an accelerated growth of 25%) and after

five years since 2008, market will approach an approximate value of 57.3 billion dollars (with an

estimated surging % of 69.4). Particularly, the UK internet grocery market has shown value of

approximately £3.14 in the year 2008 – which is 27.9 % increased value against the previous

year 2007 (Keynote, 2009a).

Grocery shopping on the internet is a sub branch of the home shopping values.

Purchasing grocery online provides certain advantages to the web shoppers; it incorporates

extensive range of products, easy price comparison, convenient home deliver to save time and

many others. There are four key players in the UK online grocery market – Tesco, ASDA, J

Sainsbury’s and Waitrose – and a fifth warehouse based online operator with the name of Ocado

(a sub-partner distributor of Waitrose) (see Appendix. A). In spite of steady growth in the

grocery market of UK, the sixth major ground grocery retailer Morrisons has not yet stepped in

the online market (Keynote, 2009b). The five above mentioned companies dominates the online

grocery market, contributing 89.2% of the whole market size with the sales figure of £2.8 billion,

which is still too small only 2.8% of the grocery sales in the UK for the year 2008 (Keynote,

2009a) (also see Appendix. B). In contrast to the figures of 2008, keynote report has declared

that market expansion of online grocery retail in UK has a projection of double size in the year

2013. Market situation illustrates that the growth opportunities are there for the e-tailers in the

online grocery competition, but e-retail practitioners and managers have to come up with better

service offerings to manipulate the consumers’ shopping choice. This research has the potential

to come up with certain positive directions for the e-retailers in the UK grocery market.

1.2. Research Significance and Problem StatementMajor players of grocery market are redesigning their conventional websites to meet the

contemporary service trends of the online retail market to cope up the emerging trend of people

shopping styles in the UK. This is significant for the managers (such as brand, store, service and

3

retailer business) and for the marketing theorists to study the in depth importance of the grocery

web-retail attributes to incorporate positive efforts in this particular context. A few studies has

covered the grocery market (such as Hansen, 2005; an online administered questionnaire based

study) or an exploratory study generally covering the online shopping trends of UK from

retailers perspective (Rowley, 2009) has attempted to add literature in this area. Though, from

end consumers’ corner hardly any research has been done yet in the UK online grocery market.

This research will cover the conceptual gap found in the academic literature to help out the

business academicians as well as it will cover the contextual gap to provide new directions to the

e-retail managers of the online grocers by resuming the below defined problem statement:

“To study the relationships between e-Service Attributes, consumers’ satisfaction and behavioral intentions in context of the UK online grocery market”

1.3. Research Objectives

Under the light of the above mentioned introduction and market scenario problem statement, this research will cover the following major objectives

To study the consumers’ shopping behavior in the e-retail area of UK grocery market

To study the relationship between e-Service attributes and Consumers’ satisfaction in the

grocery e-tail market of the UK

To examine the relationship between satisfaction and behavioral intentions from

consumers’ point of view in the online grocery market of the UK

2. Literature Review and Relevant TheoriesThe purpose of literature review is to thoroughly discuss the topic in a particular context of past

studies and to avoid any sort of unawareness to important dimensions and variables that might

have certain influence on the current research (Bryman and Bell, 2007). Since this study is based

on the consumers’ behavior regarding grocery market of online industry in the UK, it will be

worthwhile to deeply go through the earlier literature related to the three main variables, e-

Service Attributes, Consumers’ Satisfaction and Consumers’ Behavioral intentions, mentioned in

the current study.

4

2.1. e-Service AttributesService quality is a sub-marketing concept muscularly linked with the perceptions of the

consumers (Gummensson, 1979). Several well renowned Scandinavian and American

researchers (Grönroos, 1982; Parasuraman et al., 1985) are at the top of the lists who have

contributed in the conceptualization of the term “service” in marketing literature. Since 1985, a

commonly used definition of service quality in marketing literature as well as in practical aspect

is “how customers make comparison between their expectations and perceptions of delivered

services” (Parasuraman et al., 1985). Parasuraman and two of his colleagues Zeithaml and Berry

(1988) retrieved a measurement tool, from the earlier discussed concept of service quality,

named as “SERVQUAL” (including five core service attributes: tangibility, reliability,

responsiveness, empathy and assurance) to measure the real business performance of service

firms. Nevertheless, due to the unbelievable surfacing of e-retail business in the 21st century,

traditional service quality measurement tool “SERVQUAL” has been restated by several

researchers (such as Kaynama and Black, 2000;Yoo and Donthu, 2001; Loiacono et al., 2002;

Wolfinbarger and Gilly, 2003; Webb and Webb, 2004; Parasuraman et al., 2005; and Kim et al.,

2006 ) with their own dissimilar names (such as E-Qual, SITEQUAL, WEBQUAL, eTailQ,

SiteQual, E-S-QUAL and E-A-S-QUAL), respectively. Santos (2003, p.235) refined the concept

of service quality in electronic retailing context as “the consumers’ overall evaluation and

judgment of the excellence and quality of e-service offerings in the virtual marketplace”.

Later on, Kim et al., (2009) examined the e-retail context by using the five key attributes

of e-service quality such as convenience, customization, information, communication and web-

aesthetics, which are all driven through their previous research paper published two years before

(Kim et al, 2007). Their latest US college male and female students based research in e-retail

apparel context has exposed that the quality of e-service attributes have certain positive impact

on the consumers’ satisfaction and behavioral intentions (i.e loyalty).

2.2. Consumers’ Satisfaction Concept of consumers’ satisfaction has been remarkably remained a hotspot of marketing

professors for the last four decades (Ha et al., 2010a). Since the publication of Oliver (1977)

5

article in the ‘Journal of Applied Psychology’, marketing scholars have examined this concept

through different consumer behavior perspectives to create a generalize conceptualization.

However, till the moment researchers are in the controversial debate to agree on a single pet

definition of satisfaction (Roger et al., 1992) due to the subjectivity element linked with the

consumers’ multi-service experiences in this global world. Oliver (1989) cited by Ha et al.,

(2010b) defined satisfaction as ‘an evaluation, affective, or emotional response of the consumer’

(p.1). Though the current study discusses the e-Service attributes, past researchers (such as

Parasuraman et al., 1988; Anderosn et al., 1994) have consensus that perceived service quality,

expectations and disconfirmation directs the consumers toward satisfied/dissatisfied decision

stage.

Particularly, e-Service quality delivered to the customers through several web attributes

has certain influence on customers’ satisfaction, eventually. The positive and negative evaluation

of the e-Service quality attributes leads the customers to build a satisfactory or dissatisfactory

image in his/her mind, which means if the service delivered from web retailer side is evaluated

better in quality then as a result satisfaction should occur at the consumers’ end (Carlson and

O’cass, 2010). Satisfying the customers has always been remained at the priority of the

managerial interests. The available recent papers examining the websites have argued that better

service quality of a firm has a positive influence on the customers’ satisfaction (Cristobal et al.,

2007; Yen and Lu 2008; Lin and Sun, 2009), which is a remarkable indicator for a firm’s

prospect profitability (Kotler, 1991, p.19; Anderson et al., 1994) and illustrates that how a

company has to allocate its resources in the business to achieve the milestones of its long term

growth plans (Anderson and Sullivan, 1993).

2.4. Behavioral IntentionsLiterature of marketing has widely discussed the role of service quality and consumer

satisfaction in several retail business environments. Researchers, in most of these papers, are

keened toward the evaluation of behavioral intentions that prepare consumers to act, ultimately,

to act in the approval/disapproval of the company. Fishbein and Ajzen (1975) defined behavioral

intentions ‘as the customers’ subjective probability of performing a certain behavioral act’.

Most of the marketing papers have revealed that such consumers’ behavioral acts are seems to be

in the market place in the form of word of mouth (Brown et al., 2005); purchase intention

(Cristobel et al., 2007); commitment (Park and Kim, 2003); repurchase intention (Anderson and

6

Sullivan, 1993; Ha et al., 2010a); complaint behavior (Janda et al., 2002) and consumers’

switching intention (Zeithmal et al., 1996). For last one decade, numerous researchers have

examined the consumers’ behavioral intentions in the e-retail context and previous research will

precise the current study to come up with new empirical findings in the services marketing

literature.

Concluding the above mentioned literature, several studies have exposed that

relationships between e-Service quality attributes, consumers’ satisfaction and behavioral

intentions in retail context has occurred. Current study will explore these relationships in online

grocery shopping context and come up with new judgments of consumers in the UK market.

3. Research Design and MethodResearch methodology is based on the philosophical approach to manipulate a compatible

strategy that gives a thorough support in the study (Saunders et al., 2003). Current study has

focused on the online grocery shoppers of the UK to empirically investigate the conceptual

model developed through prior theoretical literature. Hence, application of deductive approach is

satisfactory to fulfill the requirement of current research design (Sekaran, 2004). The adaptation

of deductive approach underpins quantitative self-administered online questionnaire in order to

empirically investigate the problem statement.

3.1. Framework and Hypothesis of the studyTheoretical framework introduced in the current research explores the hypothesized relationships

between the three constructs in the UK online grocery (see Appendix C), based on the previous

research work written in the literature of consumer and services marketing. .

H1: Web appearance and design related e-Service quality attributes have certain impact on consumers’ satisfaction.

H2: Customer service attributes in the online grocery market have certain impact on consumers’ satisfaction.

H3: Convenience related e-Service quality attributes have certain impact on consumers’ satisfaction.

7

H4: Web usefulness and Ease of Use related e-Service quality attributes have significant influence on the consumers’ satisfaction.

H5: Information related e-Service quality attributes have significant influence on consumers’ satisfaction.

H6: Security and Privacy risk related e-Service quality attributes have significant impact on the consumers’ satisfaction.

H7: e-Service quality of online grocery retail has significant influence on consumers’ satisfaction level.

H8: Consumers’ satisfaction towards online grocery retail has certain impact on the consumers’ behavioral intentions.

3.2. Population and Sampling The population includes all those people who are the online shoppers of grocery websites. As the

trend is latest in the market, most of the respondents will be young in their age, per se. In

addition, a convenience sample of 250 male and female online grocery shoppers in the five major

cities of the UK will be selected for the data collection.

3.3. Instrument for data collection An online questionnaire based on several items retrieved through the theoretical literature will be

build in order to deal with the research. Online questionnaire will be uploaded on a URL to

distribute to the subjects so that they can answer conveniently by staying at their homes, offices

etc (Bryman and Bell, 2007 p.474).

3.4. Analysis of the dataIn the first part of this section, socio-demographic analysis of the sample characteristics will be

done to present the gender, age, education, internet usage, monthly expenditure, annual

household income and monthly grocery expense. In the second section, SPSS ‘compute’ option

will be used to calculate the average mean of each construct scale of the e-Service quality

attributes (such as convenience, information, customer service etc), Consumers’ Satisfaction, and

behavioral intentions. The average mean of each dimension will be re-coded in the SPSS to

develop new variables (named as CONV, ESQL, BVNT etc) for further statistical analysis such

as mean, standard deviation and linear correlation. In the third section, linear regression model

will be run on the SPSS to present summary statistical model, ANOVA (analysis of variance), t-

8

statistics and regression coefficients on the main variables of the study in order to test the

developed hypothesis discussed in the framework.

4. Time Plan

Prelimanry Literature Review

Refinement of Research Questions

Development of Theoretical Framework

Development of Research Hypothesis

Pilot Study (including ethical implications)

Pilot Study Analysis & Modifications

Data Collection

Data Analysis and Interpretation

Report Writing

25-Oct-11 12-May-12 28-Nov-12 16-Jun-13 02-Jan-14 21-Jul-14

9

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13

Appendix A

Financial Results for the Leading UK Supermarket

Chains (£m and %), Latest Financial Years

Turnover (£m)

Pre-Tax Profit (£m)

Pre-Tax Profit Margin (%)

Year End

Tesco PLC 54,327.0 2,954.0 5.4 †28/02/09

J Sainsbury PLC

18,911.0 466.0 2.5 21/03/09

ASDA Group Ltd

16,896.4 560.7 3.3 31/12/07

Wm Morrison

Supermarkets PLC

14,528.0 655.0 4.5 01/02/09

Somerfield Ltd

4,221.4 82.6 2.0 26/04/08

Waitrose Ltd 3,737.2 120.3 3.2 26/01/08

† — 53-week period

Note: turnover for Tesco PLC, J Sainsbury PLC and

Wm Morrison Supermarkets PLC excludes VAT; for

Tesco PLC, J Sainsbury PLC and Waitrose Ltd,

turnover equals revenue.

Source: www.myicc.co.uk

14

Appendix B

The Approximate UK Internet Grocery Market as a Percentage of

Retail Sales Through `Predominantly Food Stores' in Great Britain (£m

at rsp and %), Years Ending December 2004-2008

2004 2005 2006 2007 2008

UK Internet grocery

market (£m at rsp)e 1,085 1,375 1,835 2,455 3,140

Retail sales through

food stores (£m at rsp)†

106,493 110,055 114,240118,157

124,835

UK Internet grocery

sales as a % of

retail sales through

food storese 1.0 1.2 1.6 2.1 2.5

rsp — retail selling prices

Source:

https://www.keynote.co.uk/market-intelligence/view/product/2268/e-

commerce%3A-the-internet-grocery-market/chapter/5/supermarkets-

online?highlight=online retail market UK

Appendix C

15

Theoretical Framework of the Study

16