Importance of building customer relationship in retail industry
Retailers ranging from Outdoor Voices to The Home Depot are making a deeper connection with their customers — and they're using social. Importance of building customer relationship in retail industry. Dr. Md. Tareque Aziz,. Associate Professor of Relationship Marketing, BRAC. Relationship marketing has been studied in several contexts. However, the state of knowledge in the area of long-term customer relationships with retail.
And, can these relationships be defined by their functional and social dimensions, as suggested by Beatty et al. Then, a relationship classification schema, which categorizes customers in terms of the types of salesperson relationships they are most likely to have, is offered.
In addition, a series of propositions related to the model and schema are provided. Because the various constructs included in the model and schema emerged from exploratory work conducted in a fashion department store, our interests here are focused primarily on fashion issues, i. Some driving needs identified may be context specific, but most are likely to be generalizable across broader contexts.
A customer-salesperson relationship exists when there is an ongoing series of interactions between a customer and a salesperson. The parties know each other, trust each other, and the interactions have occurred in the past, are presently occurring, and are expected to occur over an extended period of time in the future, barring unavoidable circumstances. A relationship may vary on such factors as the degree of closeness, the length and frequency of contact, and the amount of commitment, depending on the preferences and situations of the individuals involved.
Next, a relationship classification schema, which depicts relationship types social, functional, and combination social-functional in terms of their connection to the personal need variables, is described. Research propositions are also presented within the discussion.
The customer of interest in this paper is of the third type.
The different personal needs translate into different perceived benefits and lead to the varying types of relationships. Finally, satisfaction with the current relationship may also lead to customers seeking relationships in other settings. Relationships and Personal Needs A relationship classification schema is presented in Figure 1.
Heavy apparel purchasing is not part of the model in terms of the four cells. Instead, a customer must initially be a heavy apparel purchaser HAP to be a potential "relationship customer.
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It is likely that HAPs with different needs will seek different benefits from relationships with salespeople or service providers.
We believe four personal needs drive HAPs to value and engage in relationships, and determine the benefits valued and the corresponding nature of the relationship. These variables are now described.
Many factors have contributed to the rise in the perception of time scarcity among consumers. For example, the increased number of working wives and single parent households has been cited as a possible cause contributing to the perception of time scarcity. Whatever the cause, perceived time shortage is believed to result in perceived role overload ROwhich "occurs when the total prescribed activities of one or more roles are greater than individuals can handle adequately or comfortably" Voydanoff and Kellyp.
Reilly describes RO as "conflict that occurs when the sheer volume of behavior demanded Solomon studied surrogate consumers, or wardrobe consultants, in the apparel area. These individuals serve in roles that are similar to some of the roles fulfilled by sales associates engaging in customer relationships.
Solomon verified that some consumers use a wardrobe consultant primarily because they do not like to shop. Likewise, Forsythe et al. Thus, the surrogate provides customers the functional benefits of engaging or aiding in the search and selection process, which are greatly valued by individuals who do not enjoy shopping. Solomonalso discusses the symbolic benefits that are part of the professional shopper's product offering. Symbolically, a surrogate can offer "such subjective benefits as stylistic guidance, reassurance, or status" Solomon ,p.
These consumers may feel that they lack the expertise to shop wisely for clothing.
How retailers are rethinking the consumer-brand relationship
Therefore, lacking confidence in their shopping capabilities, they consequently turn to a salesperson for guidance and support. It is useful to examine whether variables that affect a person's interpersonal relationships in general also affect a person's relationships with salespeople. One personal need that may affect the nature of a customer-salesperson relationship is sociability.
According to Buss and Plominthe highly sociable person, by definition, seeks relationships. Highly sociable people tend to appreciate friendships and opportunities to engage in relationships. Description of Cell Members. Consumers who perceive that the online retailer is investing resources in meeting their needs should consider the relationship important and should be more likely to continue the relationship.
Commitment has both affective and cognitive components Geyskens et al. Communication, the provision of relevant and timely information to the consumer, is essential in any marketing relationship Berry and Cooper ; Dwyer, Schurr and Oh It plays a dual role. First, it ensures the consumer has information with which to make decisions.
Second, it serves as a vehicle for interaction between exchange partners Dwyer, Schurr and Oh For relationships between online retailers and consumers to flourish, communication must be two-way. Online retailers must provide relevant and timely information, and consumers must be willing to provide personal information for online retailers to use in customizing the shopping experience.
Privacy, as perceived by online consumers, includes the protection of personal information they provide, including credit card security Fram and Grady ; Hoffman, Novak, and Peralta In communication theory, self-disclosure C willingness to reveal personal information to another party C is fundamental to the development of relationships Altman and Taylor ; Taylor and Altman Self-disclosure is predicated on the assumption that personal information will be held in confidence by the recipient.
Consumers believe that if they are willing to share personal information, the retailer is obligated to respect and protect their privacy. If consumers perceive that an online retailer protects their personal information, they should be pleased see Oliverand should be more satisfied with the relationship.
They should also be more trusting of the online retailer, because the perception of privacy reduces the uncertainty associated with self-disclosure. User friendliness implies that the online shopping experience pleases the consumer, thereby increasing satisfaction with the online retailer. User friendliness also implies a more efficient and effective shopping experience, which should build trust and enhance commitment.
The second set, which includes Hypotheses 4 and 5, deals with the effects of satisfaction and trust on commitment. The third set, which includes Hypothesesdeals with the mediating effects of satisfaction and trust.
If communication from the online retailer contains relevant information received in a timely manner, consumers should be pleased. Similarly, if consumers perceive that personal data and credit card information are safe and secure, they should be pleased by the fact that the potential for an unpleasant experience has been reduced. Finally, perceived user-friendliness should increase satisfaction, because consumers enjoy the shopping experience more.
Trust should also be a positive function of perceptions of relational investments. If consumers perceive that communication is predictable and contains useful information, their trust in the online retailer should be higher. The perception that personal information is held in confidence should reduce uncertainty associated with the online shopping experience, thereby increasing trust.
Perceived user-friendliness should build trust, because the shopping experience will be seen as more efficient and effective.
Commitment should also be a positive function of perceived relational investments. Therefore, commitment to continuing the relationship should be higher. If consumers are satisfied with an online retailer, they should find the relationship pleasing and worth continuing. The effect of satisfaction on commitment per se, has not been studied.
Rather, researchers have focused on related variables. For example, in business-to-business marketing, satisfaction has been shown to affect long-term orientation Geyskens et al. Recent conceptual work in business-to-consumer marketing suggests satisfaction should affect loyalty Oliver ; If consumers trust the online retailer, they should find the relationship predictable, efficient and effective.
Importance of building customer relationship in retail industry
This implies that the relationship is worthwhile, so commitment should be higher. Commitment to the online retailer is a positive function of satisfaction. Commitment to the online retailer is a positive function of trust. Both satisfaction and trust should mediate the effect of perceived investments on commitment to the online retailer.CASE STUDY: Tesco
The mediating effect of satisfaction is suggested in recent conceptual work on consumer loyalty Oliver If needs are fulfilled satisfactorily, the consumer should be more committed to the relationship with the online retailer. Trust should also mediate. As a "psychological contract" between the consumer and the online retailer, it captures perceptions that relational investments make the shopping experience more efficient and effective, and therefore, more worthwhile.
Satisfaction will mediate the effect of perceived investments on commitment to the online retailer. Trust will mediate the effect of perceived investments on commitment to the online retailer.
Finally, trust should mediate the effect of satisfaction on commitment to the online retailer. Trust will mediate the effect of satisfaction on commitment to the online retailer. METHOD The survey was mailed to a nationwide sample of 1, online shoppers, whose addresses were purchased from a commercial broker. In addition to the two-page survey questionnaire, subjects received a personalized cover letter explaining the purpose of the survey, and a postage-paid, pre-addressed envelope.
The cover letter explained that the results would be used for educational purposes. Respondents were offered a summary of the results, and given two weeks in which to respond. The questionnaire had three sections. The second section included measures of the major constructs, including relational investments by the online retailer, and the relational outcomes of trust, satisfaction, and commitment.