Customer Relationship Management in Online Grocery
Customer Relationship Management in Online Grocery
Customer Relationship Management in Online Grocery
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Kaur, J Bus Fin Aff 2018, 7:2
Journal of
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DOI: 10.4172/2167-0234.1000339
ISSN: 2167-0234
Abstract
Purpose: This paper investigates into Customer Relationship Management activities done by Online Grocery
Portals that leads to greater Customer satisfaction and how these activities play a major role in increasing value of the
company.
Methodology: The Descriptive and Exploratory research design was used to conduct this research. Descriptive
Research Design will be used for collection of primary data with the help of a structured questionnaire to assess the
importance of CRM in online grocery shopping. The respondents were chosen from the National Capital Region of Delhi
through Non-probability convenience Sampling with the help of a structured questionnaire.
Findings: Though all the Online Grocery stores are working tremendously on increasing Customer satisfaction from
their services, they are still unable to meet the expectations of the customers in an efficient manner. As per our study of
the factors taken in our research project we came to know that all the portals we have studied lack in some or the other
field where they need to work with perseverance to get the adequate results and improve their competency.
Research limitations/implications: Due to lack of time and resources we were unable to conduct study on large
number of online shoppers. The study is limited to only 206 people that is very less a number to implement this study to
understand and view the psychology of the entire population.
Originality/value: This paper creates awareness about factors that have created customer satisfaction from the
online portals studied in the research paper. It will also help the companies in understanding the loop holes that are
responsible for customer satisfaction from the online grocery portals.
Keywords: Customer relationship management; Customer 1990 s. This business model took about 20 years to become effective and
expectations; Customers satisfaction; Brand value; Online grocery efficient. Tesco began to explore the possibility that the Internet may
stores; Brand loyalty be used to improve its core business scope and promote retail stores.
• Convenience In 2011, some startups put forward the idea of purchasing online
grocery in India. All of these startups are striving to create their own
• Service, and image and status in the online market in India. Unfortunately, almost
• Product variety. everyone has failed, mainly because of a lack of customer base and
investment. Only a few survived.
In order to capture the attention of consumers and gain a
competitive advantage, physical stores are mainly concerned about
prices and varieties. Due to the service costs incurred when shopping *Corresponding author: Manpreet Kaur, Amity Business School, Amity University,
online, traditional stores gain an advantage in online stores by way of India, Tel: 9205516484; E-mail: [email protected]
comparative pricing. However, electronic grocery stores are keeping
Received May 02, 2018; Accepted May 31, 2018; Published June 05, 2018
pace with traditional stores in product categories. They are considered
to have a competitive advantage, involving atmosphere, convenience Citation: Kaur M (2018) Customer Relationship Management in Online Grocery
Stores. J Bus Fin Aff 7: 339. doi: 10.4172/2167-0234.1000339
and the other three dimensions of service.
Copyright: © 2018 Kaur M. This is an open-access article distributed under the
History of online grocery in world terms of the Creative Commons Attribution License, which permits unrestricted
use, distribution, and reproduction in any medium, provided the original author and
The foundation of online grocery stores was born in Britain in the source are credited.
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However, the current business has achieved very good results and • You can choose a store collection or home delivery, which
is being accelerated at a very fast pace every day. The biggest reason for makes the service very flexible. You can make choices based on
this increase is consumer habits and lifestyle changes. Nowadays, the your convenience.
daily work of Indian consumers has become more and more busy, so
• You gain diversity and make sure you have a pleasant
there is a need to replace rather than go shopping. Therefore, online
experience to win your loyalty while fulfilling your delivery
portals are such a choice.
store. Therefore, you can get the best variety and quality.
The value of India's food and grocery industry is now 383 billion
• Online shopping can help you get rid of shopping-related
U.S. dollars, and it is expected to reach a height of 1 trillion U.S.
troubles, such as long queues at check-out points, finding
dollars in 2020. Currently bigbasket, Nature's Basket, Grofers, Amazon
parking spaces in shopping malls, spending time and money
Kitchen and Reliance smart are all well-known people in the good
preparing and shopping.
grocery business.
• Product freshness and quality are fully guaranteed.
Expected future growth of Indian grocery stores
• You can get exciting offers when shopping online.
Despite challenges that e-retailers face, they are putting in all efforts
to make online grocery retailing a success story. The retailers are trying Disadvantages of ordering grocery online
to create a brand identity in order to drive revenue and growth in long
• Some websites are poorly designed. In such websites searching
run.
for a particular item becomes a task. This can actually piss of
In 2016, India was considered as the fifth largest market in Asia the searcher and he/she may decide not to go online.
Pacific for E-grocery on an average of US$135 million. The leader in
• Delivery charges maybe higher at peak times.
this race was China, Japan was ranked number second followed by
South Korea. Growth of Indian online grocery market is increasing at • While choosing grocery we often try to choose it personally and
an alarming rate. It is recognised amongst top five countries in Asia we try to find best amongst the choices. Anyone else choosing
Pacific in 2016 in terms of growth (Figure 1). on your behalf doesn’t go well with some people. Thus, goods
may not fit in your own high standards.
Models of online grocery retailing
• Popular offers may sell out before you get your delivery. You
E-grocery is capital intensive because of the need for cold storage
may be provided with a substitute, but this may sometime
to keep grocery items fresh, healthy and long lasting. In online grocery
cause disappointment.
presently three models are widely used namely
1. Inventory model
Customer relationship management
Theoretical framework of CRM: Customer relationship
2. Hyperlocal model
management projects often address two concepts which are almost
3. Mixed model. opposite to each-other: efficiency and effectiveness. In effectiveness
we see whether the company is effective in managing relationship
Advantage of ordering grocery online with the customers, is it successfully maintaining its market share and
• Customers can shop at any time of the day and provide 24/7 is it effectively improving its market penetration and on the other hand
shopping services. This not only helps customers enter the company have to be efficient. This means the company need to make
shopping environment at any time, but also helps him to careful assessment of IT investments and projects. These both activities
manage busy and busy lives. Customers can select items and help in understanding whether the initiatives in conducting CRM activities
make decisions at home, anywhere, anytime. are bringing in return on investment or are just a direct and clear payback.
shop online
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CRM is regarded as an important tool for “delivering revenue providers will make use of that information in giving better
growth through improved customer experiences, retaining and shopping experience.
growing existing customer bases, increasing customer acquisition
5. It is seen that CRM helps in better customer engagement. The
rates. The vision for the CRM initiative is to enable better customer
more the company is involved in CRM activities, the more
understanding, identifying the individual customer’s requirements and
the customers are happy and content by the services that
selling them appropriate products and services. Customer relationship
are provided. This further leads to customer satisfaction and
management is a corporate level initiative, focusing on creating and
loyalty.
maintaining relationships with customers.
CRM Packages: There is a specialised software category that covers Literature Review
a set of applications designed to help businesses in managing their Consumer attitude towards online shopping: - "Value for money"
many business processes like
Customers are users in the electronics market and it is very difficult
• Customer data to influence customers in the current highly competitive environment.
• Customer interaction Nowadays, understanding of the expectations and expectations
of online stores is becoming a challenge for these online business
• Accessing business information companies. Based on the research done by Moorman et al. [1] we
• Automate sales conclude that consumers always seek the value of their money. He will
be willing to buy things from a specific online platform where he gets
• Track leads and contracting value for his communication. If they are well-served by the customer
• Marketing and provide enough value and value for return, money will not hinder
the sales of the company.
• Customer support
A study initiated in Jaipur City found that customer’ attitudes to
• Clients and contacts e-marketing show that gender does not affect customers’ attitudes
towards online shopping and age groups. People between the ages
• Support vendor/ partner relationships
of 18 and 30 prefer to shop online. High-income groups are major
• Employees contributors to the time-saving of e-shopping. Safety and security are
the main concerns of Indian consumers [2].
• Knowledge and training
Grocery e-tailing: "Increase the convenience of shopping"
• Assets or resources
Constantinides stated in his research that grocery shopping is a very
Some of well-known CRM packages in use are: important part of any family's daily, weekly, or monthly purchase. The
• Infusionsoft local kirana store and the local market have undergone a tremendous
transformation, supermarkets and shopping centers are now turning
• HubSpot CRM to online retail. Reddy and Divekar mentioned that grocery retailing is
• Chime difficult to start, but once it starts, it will become a loyal customer. Once
customers begin to be satisfied, it is possible to repeat purchases [3].
• Results CRM
Customer Relationship Management (CRM): An effective tool to
• Free Agent CRM establish a solid relationship with customers:
• Base In the article by Dayan and Arnolds [4], they pointed out that
"effective employee training" is one of the key success factors for
• Prosper Works CRM improving CRM implementation. Employees with superior process
• NetSuite thinking skills are preferred because they can think more thoroughly
and can successfully implement CRM practices.
• Claritysoft
In recent years, CRM began to pay more attention to data mining
• AmoCRM. and software development [5,6]. With limited face-to-face interaction
Necessity of CRM in online grocery business online, the company will look for opportunities to implement a CRM
system.
1. Now customers have greater advantage due to increased
awareness by use of mobile phones and internet connectivity Consumers' expectations are getting higher: "The demand for
for information sharing. smart competitive strategies"
2. Now customers are more accustomed towards discounts and According to Zeithaml et al. [7], customers’ expectations to be
coupons and prefer the online portal with more such offers. "convictions regarding service delivery as a standard for accomplishing
performance." Davidow and Uttal proposed that customer expectations
3. The quality of services provided by the online stores is gaining
are formed by many uncontrollable factors [8]. These factors include
priority in the mind of the customers. Customer gives more
previous experiences with other companies, their advertisements, the
consideration to portals giving good after services.
psychological status of customers when providing services, customer
4. Also consumers have increased giving their feedback on background and value, and purchases. In addition, Zeithaml et al.
quality, quantity and services and they expect that service pointed out that customer service expectations are based on complex
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considerations, including their own pre-purchase beliefs and others' inclined towards online shopping. Also, we need to know what
opinions [7]. part these online grocery stores are playing in attracting customers
towards online shopping [15]. And what difference are they bringing
Similarly, Jalal and Bin also stated that customer expectations are
in attracting customers to shop from their respective portals to gain a
related to different levels of satisfaction. It may learn from advertising
competitive edge.
and word-of-mouth communication based on previous product
experiences. Santos added that before the next purchase, expectations Objectives of the study
can be seen as a pre-consume attitude; it may involve experience. The
customer expectation is what the customer wants from the service. • To study the factors considered important by the customers
Expected diversity of definitions can lead to the conclusion that while choosing an online grocery store [16].
expectations are uncontrollable factors, including past experience, • To study customers’ further expectations in the area of
advertising, customers perception at the time of purchase, background, Customer Relationship Management by online grocery stores.
and attitude and product image.
Research design
In addition, customer expectations include pre-purchase beliefs,
word-of-mouth communication, personal needs, customer experience, Descriptive Research Design and Exploratory Design have been
and other personal attitudes. Different customers have different used for the research. Exploratory research is used to study the
expectations based on the customer's understanding of the product or existing available research work on this subject and gain insights
service [9]. and understanding of how online grocery stores maintains healthy
relationship with customers which will help us define objective and
Click-Brick Health Alternatives “Online Grocery Shopping scope of this research project [17]. Descriptive Research Design was
Reduces the Purchase of By-Products” used for collection of primary data with the help of a structured
In a survey conducted by Nielson, the customer’s intention to questionnaire to assess the importance of CRM in online grocery
shop online for food and beverages increased by 44% compared shopping.
with 2010 online shopping and beverage intent rate [10] - this helps Sampling technique: Non-probability Convenience Sampling
us to understand that it takes a lot of time to be better understand Technique. Customers were randomly selected from local markets
online portals and their potential impacts and understand consumer [18]. Hostel students, working professionals and ladies were considered
understanding of these portals and the relevance of research in the while choosing the sample.
sector. Many studies have proven that if customers buy groceries
online, it will limit the purchase of malware. Because of direct exposure Sample size: A total of 206 customers constitute the sample needed
to bad habits, it is difficult for people to control their hunger for new to get an accurate understanding of customer relationship management
foods in offline shopping. Marketing actions taken by supermarkets in Online grocery stores and how it attracts and retains consumers [19].
and food producers have enabled consumers to purchase more food Instrument used: The structured disguised questionnaire, for
[11,12]. the above construct has been designed using seven variables [20,21].
Key Characteristics of Typical Online Grocery Stores: “Points of Primary data were collected from a sample of 205 respondents chosen
attractions for the customer” through non-probability sampling from a defined target population
in the geographical spread of National Capital Region of Delhi. The
According to Pollan [11], the characteristics of an online grocery respondents were between 18 and 60 years of age and consisted of
shopping store can be viewed as consisting of three dimensions: 53.1% males and 48.7% females. Profession wise distribution of the
System quality, Information quality and Service quality. These respondents was: 45.7% private job, 25.9% students, 12.3% self-
three dimensions are also an important part of the updated model employed, 9.9% government job and 6.2% were home-makers and
of DeLone and McLean. System quality measures the functionality retired workers [22]. Secondary data were collected from research
of an e-commerce system. It includes "the availability, reliability, journals, reports, white papers and cases previously published on the
responsiveness, flexibility, integration, navigation, accessibility and topic.
timeliness of e-commerce systems" [11,12]. Many previous researchers Tools: The collected data were converted into data matrix using
have found that the availability of the system significantly affects SPSS 23.0 software and factor analysis was employed out the most
performance and customer search strategies [13]. If the customer important factors for Customer relationship management (Tables 1- 7)
frequently experiences system errors or the customer's response to the [23].
customer is too slow. The customer will not be satisfied and will not
trust the retailer. In addition, other aspects of system quality, such as Limitations
website design and security, can also greatly affect customer trust and The sample size is very small i.e., 206 people. This sample size
satisfaction Zeithaml et al. [7]. cannot be used to draw inference about the population of this sample
size. The study was done in a limited time-span. Thus, time becomes
Research Methodology
another constraint. The taste and preference of people will eventually
Research problem change and as this study is based on their taste and preferences, thus, it
cannot be used for future references.
This paper investigates to figure out those attractive features in an
online shopping portal that attract and satisfy customer desires and Discussion of Results
make them stick on to the same portal again in the near future and for
the years to come [14]. • About 90.3% of the total respondents buy grocery online. This
can be due to lack of time that people prefer to buy grocery
Also, we have attempted to understand why people are getting online rather than going to the store.
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Component Initial Eigenvalues Extraction Sums of Squared Loadingsa Rotation Sums of Squared Loadings
Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
1 11.989 63.102 63.102 11.989 63.102 63.102 7.915 41.657 41.657
2 2.833 14.911 78.013 2.833 14.911 78.013 6.908 36.356 78.013
3 0.837 4.405 82.418
4 0.664 3.496 85.913
5 0.45 2.366 88.28
6 0.363 1.911 90.191
7 0.346 1.82 92.011
8 0.256 1.347 93.358
9 0.216 1.135 94.493
10 0.168 0.887 95.38
11 0.154 0.809 96.189
12 0.137 0.723 96.912
13 0.133 0.698 97.61
14 0.114 0.597 98.208
15 0.109 0.574 98.782
16 0.085 0.446 99.228
17 0.06 0.313 99.542
18 0.052 0.273 99.815
19 0.035 0.185 100
a
Extraction Method: Principal Component Analysis.
Table 3: Total variance explained.
Page 6 of 7
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate Sig.
1 0.676 0.457 0.456 0.94219 0.000
Table 6: Regression.
Correlation Overall satisfaction • Consumers in future expect online grocery stores to work on
A Pearson Correlation 0.659 areas like
Sig. (2-tailed) 0.000
1. Surprise gifts
N 198
Augmented Pearson Correlation 0.608 2. Bonus points on referral
service factors Sig. (2-tailed) 0.000
core service 3. Provision of relationship manager
N 198
factors
4. Invitation to movie shows/events.
Table 7: Correlation.
• Out of all respondents 92 were having their monthly income in • Variety of grocery items
the range of 20 k to 29 k. • Prize
• Also 34 respondents were having salary in the range of 30 k to • Quality
39 k. 43 were having salary in range of 40-59 k.
• Return options
• Only 37 people out of the sample chosen were having salary
ranging above 70 k. • Easy
• After factor analysis we got two components after factor • App navigation
analysis namely: • Provision of specific items if not available
Core service factors - which included • Free home delivery.
o Price The factors were reduced into two components after factor analysis
o Quality namely:
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• Also, we can see that 24.3% customers expects surprise gifts, • This study has been conducted at a particular level of awareness
18.4% customers expect bonus points on referral. about Online Grocery stores and their customer relationship
management techniques, which may change over a period of
• Others initiative as per customer expectation can be invitations
time. Therefore, it is imperative that the further studies may
to movie shows and event, provision of relationship manager
be conducted at different levels of awareness about Customer
and bonus point on referral.
relationship management in online grocery stores.
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