Electronic Loyalty vs. In-Store Customer Loyalty

E-Loyalty v Traditional In-Store Customer Loyalty: Has the maturity of online retailing influenced customer loyalty online in favour of offline retailing?

Literature Review

Introduction

The purpose of this literature review is to explore the current literature based on customer loyalty towards online stores, also known as ‘e-loyalty’, in comparison to the traditional in-store ‘offline’ method. Relevant literature will be evaluated and concluded based on whether online retailers have taken over the traditional shopping method and consumer’s loyalty is now referred to as e-loyalty, based on the favour of online shopping. This literature will look at secondary research information based on online versus offline customer loyalty and the advantages and disadvantages of both, including the drastic growth of e-loyalty and how it compares to traditional customer loyalty.

Customer Loyalty Definition

“Traditionally, customer loyalty has been defined as a behavioural measure. These measures include proportion of purchase (Cunningham, 1966), probability of purchase (Farley, 1964; Massey, Montgomery, & Morrison, 1970), probability of product repurchase (Lipstein, 1959; Kuehn, 1962), purchase frequency (Brody & Cunningham, 1968), repeat purchase behavior (Brown, 1952), purchase sequence (Kahn, Kalwani, & Morrison, 1986), and multiple aspects of purchase behavior (Ehrenberg, 1988; DuWors & Haines, 1990)” (Kumara et al., 2004) While Khan (2013) defines customer loyalty as “the intention of repurchasing goods, stating that this is the goal of industry and loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service consistently in the future, thereby causing repetitive same-brand or same-brand set purchasing” (Khan, M, 2013). This suggests Khan (2013) proposes customer loyalty can be defined as a commitment to a brand or retailer where a consumer continuously repurchases from that specific brand. This can be based on numerous qualities and experiences which influence repetitive buying behaviour. There are many reasons why customer loyalty is important, including effective forecasting for the retailer when based on regular customers. Figure 1 shows the positive economic effects of customer loyalty online produced by Schrodter (2003) (Heinemann et al., 2010).

E-Loyalty Definition

Schefter and Reichheld (2000) define e-loyalty being all about quality customer support, on-time delivery, compelling product presentations, convenient and reasonably priced shipping and handling, and clear and trustworthy privacy policies (Shankar et al., 2001) while Srinivasan (2002) defines e-loyalty as a customer’s favorable attitude toward the e-retailer that results in repeat buying behaviour (Srinivasan et al., 2002).

Consumer Behaviour

Consumer behaviour can be defined as the behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs (Schiffman et al.