Tailoring Online Retail Strategies to Increase Customer Satisfaction and Loyalty

This paper examines how online retailers can combine their strategies on differentiation and market scope (segmentation) to increase customer satisfaction and loyalty. Drawing on a sample of UK grocery e-buyers, the authors classified e-shoppers as either goal-oriented or experiential, and empirically assessed the impact of a number of possible differentiation strategies on the satisfaction and loyalty of each shopper segment. The results show that differentiation based on customisation, product assortment and website design are more effective when directed at the experiential shopper. On the other hand, differentiation based on customer care, convenience and value for money are more successful when focused on the goal-oriented shopper. The authors also found that satisfaction is more likely to generate loyalty for the goal-oriented segment rather than for the experiential shopper.