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Technologies Enhancing the Customer Experience in Apparel Retail

A Future Study

Written by S. de Vries, C. Thörnvall

Paper category

Master Thesis

Subject

Business Administration>Management

Year

2018

Abstract

Master Thesis: Customer experience Retailers and researchers generally believe that the importance of a satisfactory customer experience is an important part of establishing a lasting competitive advantage (Stein and Ramaseshan, 2016; Roy et al., 2017). This is particularly important in the apparel industry-the number of in-store customers in this industry is falling sharply (Singh & Swait, 2017). This has led to a decrease in the physical presence of major players such as H&M, Macy's and Abercrombie & Fitch. Therefore, it is clear that the retail industry landscape has undergone a later transformation. Recent studies have shown that customers have begun to look at retail stores from a different perspective. Today's customers use physical stores to collect information while using other channels to obtain information. Actual purchase (Rapp et al., 2015; Heitz-Spahn, 2013). This shows that today's customer experience does not match the needs of contemporary customers. This difference in severity is not economically feasible, so retailers need to reshape the customer experience. Although previous research has emphasized the importance of managing the customer's in-store experience (Sands et al., 2016; Lemon & Verhoef, 2016; Johnston & Kong, 2011), innovation in the physical retail environment is clearly lacking. However, although traditional commerce has been in a downturn, other channels such as e-commerce and mobile commerce have grown significantly in recent years (Wang et al., 2015; KPMG, 2017). Despite this growth, the fashion industry has experienced significant complexity when trying to transform the in-store experience into a virtual world (Blázquez, 2014). This is because clothing can be regarded as a high-context commodity, which usually requires a physical evaluation during the decision-making process (Citrin et al., 2003). Since both online and offline channels are difficult to cope with the continuing digital trend, it is clear that the industry needs a new strategy. Today's customers are more closely connected and tend to use multiple channels throughout the sales process. Retailers need to integrate different channels to provide a seamless and uninterrupted experience (Hossain et al., 2017). According to Blazquez (2014), this problem can be solved by using modern technologies that can bridge the gap between different channels. However, as emphasized by Pantano and Viassone (2014), technological innovation for the retail industry must be consistent with actual customer needs to have an impact. This means truly understanding the customer so that you can provide an enhanced customer experience. 2.1.1 Behavioral loyalty intentions With today's emerging technologies changing the concept of customer shopping behavior, the perceived customer experience is likely to have an impact on customer loyalty in the future (KPMG, 2017). In the past ten years, research on the statistical relationship between loyalty, trust, and satisfaction has received considerable attention, and the relationship between customer experience and loyalty alone, separate from other variables, is rare ( Klaus & Maklan, 2011; 2013). In addition, it shows that the relationship between customer experience and loyalty is stronger than the relationship between customer satisfaction and loyalty. This provides evidence that customer experience has a direct impact on customer loyalty, separate from other variables. Companies that provide a satisfactory customer experience will inevitably gain loyalty (KPMG, 2017). As customers become increasingly disloyal to companies and brands (Heitz-Spahn, 2013), it is clearly a challenge for retailers to successfully design customer experiences that create loyal customers. Therefore, retailers should focus on using emerging technologies to update and enhance the customer experience in order to achieve and maintain long-term customer loyalty (Homburg, Christian, Danjiel Jozic, & Christina Kuehnl, 2015). To make this possible, retailers must adapt to customer needs and create a satisfying customer experience to influence positive responses (Marel & Biedenbach, 2010). Despite the complexity of achieving customer loyalty in today's highly competitive retail industry, there are still huge advantages in addressing three different needs, mainly utilitarian, hedonistic and symbolic needs (Mimouni-Chaabane & Volle, 2010). 2.2 Customer Journey Technological advancements have fundamentally changed the customer journey, that is, the complete shopping experience that leads to purchases. Compared with the traditional linear buying process, today's customers are affected by multiple factors and across multiple channels, causing shoppers to move irregularly between different stages of the entire decision-making process (KPMG, 2017). Research also shows that shoppers use different channels for different purposes, in various combinations and sequences (Singh & Swait, 2017; Frasquet et al., 2015), which puts pressure on companies and needs to identify and understand the influence of customer behavior Key factors and customer experience (Lemon & Verhoef, 2016). In the retail industry, these elements are often referred to as “touch points” and include all interactions between customers and companies (Pantano & Viassone, 2015). In addition, the shopping behavior displayed between customers is expected to evolve simultaneously with the development of technology. Read Less