retail is detail1445367/fulltext02.pdf · retail is detail customers’ attraction to physical...
TRANSCRIPT
RETAIL IS DETAILCustomers’ Attraction to Physical Retail Stores Within Consumer Electronics
Tina Mohammadi
Business and Economics, master's level
2020
Luleå University of Technology
Department of Business Administration, Technology and Social Sciences
RETAIL
IS
DETAIL
- Customers’ Attraction to Physical Retail Stores Within Consumer Electronics
____________________________________________________________________________________
Tina Mohammadi
Business and Economics, master's level 2020
Department of Business Administration, Technology and Social Sciences
ACKNOWLEDGEMENTS ——————————————————————————————————————————
This master thesis represents the final project of the master program in business and
economics. The author would like to thank everyone who have contributed to the progress
and quality of this thesis. First, a sincere thanks to my supervisor Joseph Vella for supporting
my thesis and providing valuable feedback and helpful guidance.
The author would also like to extend a thank you to all the participants, the consumers for
taking time to participate and answer the questions. Also a big thanks to the head managers
for providing with relevant data, without their insight and expertise this thesis would not have
been possible to perform.
A final thanks goes to all course members who have supported with valuable feedback during
this journey.
Luleå, June 2020
Tina Mohammadi
ABSTRACT ——————————————————————————————————————————
Most companies' desire is to create customer relationships and the working methods have
changed as a result of the increased e-commerce. Because of digitalization, the retailing field
has changed dramatically. Consequently, physical stores are facing competition from online
companies. Previous literature has stated that physical stores now have to focus on what
happens inside the store in order to generate a pleasant experience. The research question
focused on examining how Elgiganten, the largest consumer electronic store in Sweden, use
customer experience and customer value in order to influence store attractiveness. This was
carried out by using a qualitative approach, an exploratory nature and by conducting in-depth
interviews with consumers and the company's head managers. The main findings of this
study suggest that customers can not take advantage of some services when buying through
e-commerce. This ability to provide service is an important part of the handling of
competition from e-commerce. The retailers need to find the right balance between
engagement and emotions in the physical retail environment in order to appeal to the
consumers’ desires of trust & reliability in order to create an attractive experience point. By
means of this, the thesis emphasised the imperative of creating experience in offline retailing.
Keywords: Customer Experience, Customer relationship, E-commerce, Customer service,
Physical stores, Retail industry, Consumer electronics, Elgiganten, CRM
SAMMANFATTNING ——————————————————————————————————————————
Företagens önskan är att skapa kundrelationer och arbetsmetoderna har förändrats till följd av
den ökade e-handeln. På grund av digitaliseringen har detaljhandeln förändrats drastiskt.
Följaktligen står fysiska butiker hotade inför konkurrens i och med e-handelns framväxt. I
litteraturen anges att fysiska butiker måste fokusera på att skapa en upplevelse för kunderna.
Forskningsfrågan fokuserade på att undersöka hur Elgiganten, Sveriges ledande aktör inom
hemelektronik, använder kundupplevelse och kundvärde för att påverka butiks-attraktivitet.
Studien har genomförts genom att använda ett kvalitativt tillvägagångssätt med utforskande
karaktär och genom att fördjupa intervjuer med konsumenter och företagets chefer. De
viktigaste resultaten från denna studie tyder på att kunderna inte kan dra nytta av vissa
tjänster när de handlar online. Denna förmåga att tillhandahålla tjänster är en viktig del av
hanteringen av konkurrensen från e-handeln. De fysiska butikerna måste hitta rätt balans
mellan engagemang och känslor i den fysiska detaljhandelsmiljön för att vädja till
konsumenternas önskemål om förtroende och tillförlitlighet för att skapa en attraktiv
upplevelsepunkt. I och med detta betonade avhandlingen hur viktigt det är att skapa
upplevelser inom detaljhandel.
Nyckelord: Kundupplevelse, Kundrelation, E-handel, Kundtjänst, Fysiska butiker,
Detaljhandel, Konsumentelektronik, Elgiganten, CRM
TABLE OF CONTENT ——————————————————————————————————————————
1. INTRODUCTION 1
1.1 Elgiganten AB 1 1.2 Background 1 1.3 Problem Discussion 3 1.4 Research Purpose 4 1.5 Delimitations 4
2. LITERATURE REVIEW 5 2.1 Customer Shopping Behaviour 5 2.2 Customer Relationship 6 2.3 Customer Relationship Management 7 2.4 Customer Experience 9
2.4.1 In-Store Customer Experience Perspectives 10 2.4.2 In-Store Customer Experience Creation 10 2.4.3 In-Store Customer Experience Challenges 14 2.4.4 Customer Engagement as a Way to Enhance Customer Experience 15
2.5 Customer Satisfaction 16 2.6 Frame of Reference 17
3. METHODOLOGY 20 3.1 Research Purpose 20 3.2 Research Approach 21 3.3 Research Strategy 22 3.4 Data Collection 23 3.5 Sample Selection 24 3.6 Data Analysis 25 3.7 Quality Standards 26
3.7.1 Reliability 26 3.7.2 Validity 27
4. EMPIRICAL DATA 29 4.1 Shopping Behavior 29 4.2 Customer Relationships 30 4.3 Customer Relationship Management 32 4.4 Customer Experience 34 4.5 Customer Satisfaction 35
5. DATA ANALYSIS 37 5.1 Customer Shopping Behaviour 37
5.2 Customer Relationship 37 5.3 Customer Relationship Management 39 5.4 Customer Experience 39 5.5 Customer Satisfaction 41
6. CONCLUSIONS 42 6.1 Conclusions 42 6.2 Theoretical Contributions 45 6.3 Practical Contributions 45 6.4 Limitations & Suggestions for Future Research 47
7. LIST OF REFERENCES 48
Appendix A: Interview Guide for Head Managers
Appendix B: Intervjuguide för Chefer
Appendix C: Interview Guide for Consumers
Appendix D: Intervjuguide för Konsumenter
1. INTRODUCTION ——————————————————————————————————————————
This chapter will introduce the background of e-commerce and its growth and the changes in the
retail landscape within consumer electronics. Moreover, the problematization and purpose of this
paper are stated, as well as the research question that is derived from it. Lastly, an illustration of
intended contribution to the field of research.The chapter continues with a problem discussion along
with the purpose of the study. Finally, delimitations of the research are presented.
1.1 Elgiganten AB
Elgiganten AB are one of Scandinavia’s largest retailer in consumer electronics. The
company started in 1994 and has since then expanded greatly to consists of 117 wholly
owned department stores and 39 franchise stores. Today Elgiganten AB has approximately
3200 employees. The company is wholly owned by the Norwegian company Elkjøp Nordic
AS, which in turn is owned by the British company Dixons Carphone plc. Elgiganten AB
uses three sales channels: physical and online stores and Elgiganten Contact Center.
(Elgiganten AB, 2020)
1.2 Background
Elgiganten is just one of many retailers that tries to survive through the development of
digitalisation. This development of digitalisation is recognised as one of the most impactful
ongoing transformations in today’s world. From a business perspective, especially the retail
industry is affected tremendously. The commerce is constantly changing with people's new
ways of living and consuming. (Hagberg & Jonsson, 2016). According to Arnberg, Bergh,
Nevander & Svensson (2018), there is a shift in retail where consumers tend to shop online
instead of physical stores. As a result, e-commerce is gaining increased sales for each passing
year. Today economic growth takes a large place online, and it has made significant
consequences for traditional physical stores (Mosquera, Olarte-Pascual & Ayensa, 2018).
Digital development continues, which is characterized by the fact that more people carry out
their everyday activities via digital platforms, everything from shopping for food to reading
the morning newspaper (Arnberg et al., 2018). Based on previous facts it is therefore
interesting to study how traditional strategies for companies are affected when the outside
1
world undergoes structural changes. What way do physical stores compete today when their
outside world has changed so fundamentally and how do stores market themselves in a
digitalized world are questions that should be observed. (Rosenström, 2016).
The result for 2019, showed an eventful year for Swedish e-commerce. Total e-commerce
growth for the full year was 13 percent, which means that Swedish e-commerce revenue
amounted to SEK 87 billion in 2019, which was an increase of 10 billion from the previous
year. In 2020, the full-year forecast is that the commerce will grow by over 11 percent and
amount to almost SEK 97 billion. E-commerce will therefore, if nothing unforeseen, probably
reach the milestone of SEK 100 billion in sales in 2021. (PostNord, HUI Research & Svensk
Digital Handel, 2020).
The digitalization of the various industries is changing the way the market works and new
strategies and models are needed to compete in a constantly evolving market (Netemeyer,
Maxham & Lichtenstein, 2010). New technologies are applied in different ways in different
industries and at the same time changing customer needs, which means that companies must
keep up with the development in order not to risk falling behind their competitors (Gupta,
Hanssens, Hardie, Khan, Kumar, Lin & Sriram, 2006). For physical stores, it becomes even
more important than before to manage their customer relationships, and it is primarily
long-term relationships with customers that can help the physical stores survive (Agndal &
Axelsson, 2012). It is also important to create an experience and added value for the customer
where they also receive something more, in addition to the product itself (Heinonen, 2014).
In the past, companies have been focused on mass marketing and enhancing the accessibility
of products and services to their customers. The improvement of the purchasing process and
mass marketing led to a loss of the single view of the customer as they were viewed only as
numbers in a range of others. Nowadays, companies are more focused on creating customer
experience and customer satisfaction by establishing Customer Relationship Management
(CRM) (Chen & Popovich, 2003). The concept is defined as creating and developing
profitable customer relationships by delivering better customer value and satisfaction than
competitors (Kermani, 2011).
2
Customer relationships and how to maintain them properly is a common topic among
researches (Kermani, 2011). One area that does not yet have extensive research is how
companies in the electronics industry work with customer experience to attracts consumers to
the physical stores in order to compete with the e-commerce (Jeansson et al., 2017).
Consumer electronics is an industry that has experienced strong growth in 2019, more
precisely 14 percent in comparison to last year. The fourth quarter developed considerably
and was helped by Apple’s latest smartphone iPhone 11 and, above all, by Black Friday,
which once again became a buying party of consumer electronics products. The online visitor
pressure was sometimes so high that Elgiganten’s e-commerce site was forced to have a
queuing system. (PostNord, HUI Research & Svensk Digital Handel, 2020).
1.3 Problem Discussion
There is no doubt that the increase of e-commerce has affected the physical stores.
E-commerce continues to grow and takes shares of physical commerce, and this should be
perceived as a threat to the physical stores, which raises the question of how the physical
stores work to respond to the development of e-commerce (Jeansson et al., 2017). There are
advantages and disadvantages for consumers to shop in a retail store instead of online
shopping. According to Solomon, Bamossy, Askegaard, & Hogg (2013) there are some
disadvantages of shopping via the internet, for example, the consumers are not able to explore
the product and the shipping and return fees can be expensive. The physical stores must use
the advantages of shopping in physical stores in order not to lose market shares to
e-commerce. They must in some way ensure that customers see some added value in the
business relationship. (Solomon et al., 2013).
Although home electronics is one of them most mature sub industries on the web with an
e-commerce share of 33 percent, it is still a sub industry that has grown relatively quickly.
One explanation for this is the fact-based buying behavior that has characterized consumers.
The trade within consumer electronics distinguished itself in 2019 with the highest consumer
share which, prior to its last purchase, did research on comparison sites (35 percent), through
search engines (38 percent) and research in other online stores (31 percent). As customers'
buying routines and behaviors have migrated online, it is no wonder that even the purchase
itself is more frequently online. It is likely that e-commerce within home electronics will
3
continue to grow online over the coming years. Many technology products are becoming
increasingly complex. They are connected, they communicate with each other and together
they form a whole in the smart home. Research in the future will therefore be even more
important to ensure compatibility and function. Spontaneous purchases in stores become
more difficult, which benefits e-retailers. (PostNord, HUI Research & Svensk Digital Handel,
2020).
The factors and problems mentioned above call for an understanding of how physical stores
work with creating in-store experience in order to get customers repurchase, spread
recommendations, and retain a relationship with their customers. Therefore, a better
understanding is needed in order to rethink the underlying idea of retail stores that will meet
the demands of consumers to ensure the survival of traditional retailers such as Elgiganten.
1.4 Research Purpose
The purpose of this study is to describe how physical electronic stores work with customer
experience in order to meet the increased competition from e-commerce. Referring back to
the stated purpose, this research aims to answer the following research question: How can
in-store customer experience be used to create customer satisfaction and attract consumers
to shop consumer electronics in physical retail stores?
In order to answer the study's research question and achieve the purpose of this study, the
following sub-questions will be explored:
➢ What aspects need to be taken into account when creating customer experience?
➢ How do the retail stores work with customer relations to attract consumers for
re-purchasing?
1.5 Delimitations
This study concerns to describe how the physical stores are working with customer relations
to meet the increased competition from e-commerce and will be delimited to the consumer
electronic industry in the Swedish market. The study will examine Elgiganten AB, the largest
home electronics retailer in Sweden and the focus will be on their store in Lulea.
4
2. LITERATURE REVIEW ——————————————————————————————————————————
This chapter provides the theoretical foundation for the research by exploring the customer
perspective by looking at shopping behaviors and the whole customer experience. Then, the
importance and development of customer experience from the retailer’s side, in particular in regards
to offline shopping and in-store customer experience.
2.1 Customer Shopping Behaviour
Consumers who visit physical stores are often looking for pleasure and entertainment as well
as one sense of solidarity (Hu & Jasper, 2015). Hu and Jasper (2015) mean that physical
stores therefore try to offer customers values that are not only based on money, but also a
type of experience that will lead the customer to make a purchase.
Schmidt & Olsson (2016) states that consumer who does not shop frequently on the internet
must be able to shop safely and reliably in a physical store. In this way, it can lead to
customer satisfaction and the consumer chooses to make a new purchase in the future. If
companies have consumer confidence, they can easily offer more than just sales. (Schmidt &
Olsson, 2016). Shopping in physical stores entails social interaction and can be entertaining
for consumers. It can be a pleasant experience for the consumers whose opportunities to
pleasant experiences are limited. (Hu & Jasper, 2015)
Personal service, the interaction between salesperson and potential customer, is another
activity aimed at increased sales (Kotler & Keller, 2016). Personalized service usually
involves several parts of different kinds, depending on the consumer's wishes. A discussion
about the advantages and disadvantages of the product, features, information, possible
problems, thoughts and product alternatives is held between salesperson and customers.
(Haas & Kenning, 2014) While the purpose of personal service is to generate sales, it is about
meeting the individual customer's needs and wishes through guidance, assistance and
customized service.
5
According to Hu & Jesper (2015), store experience is an important factor for consumers
when they visit a store. Experience is all steps from when customers step into the store until a
purchase is completed, and the customer leaves the store. Online stores work the same way
by having an attractive website that attracts consumers to shop from. For each item placed in
the shopping basket, similar recommendations or suggestions appear. (Hu & Jesper, 2015) At
physical stores, a common exposure is upsell by the cashier. According to Schmidt &
Ohlsson (2016), mass exposure and a smaller queue at the cash registers help the customer to
act more on impulse, because the customer gets a calm feeling and can shop in peace and
quiet. An impulse purchase means that you make a too-quick purchase that you don't really
think about when you buy a certain product. According to Schmidt & Ohlsson (2016) an
impulse purchase requires no special planning. However, the customer gets the impulse
through external factors that stimulate the senses. (Schmidt & Ohlsson (2016)
To understand how to create a unique and meaningful customer experience, it is especially
important for retailers to understand customer behaviour in general and customer motivations
in particular (Puccinelli, Goodstein, Grewal, Price, Raghubir & Stewart, 2009). Shopping
motives are of high interest for retailers as they allow them to segment their customer base
and adapt specific marketing strategies. Besides that, motives can be seen as the roots of
consumers’ shopping behaviour as consumers are guided by goals during the entire shopping
process. This is based on motivation theory which argues for individuals’ gratification and
satisfaction as main motives for consumer shopping behaviour. (Puccinelli et al., 2009).
2.2 Customer Relationship
Peppers and Rogers (2013) argue that building and maintaining customer relationships is
about preventative action. The right things must be done from a business point of view in
order to be proactive and ensure that the customer leaves the store with the products it wants
and needs. (Peppers & Rogers, 2013).
Heinonen (2014) explains that there are three different types of benefits of a good customer
relationship from a customer perspective. One advantage is trust, which is about the customer
having a high level of trust in the company and its staff. The customers feels that they can
trust that the company cares about the customer's best interests. Another advantage is social
6
benefits, which means that the staff recognizes the customer outside the business level and
that the customer has a relationship with those who work at the company. Special treatment is
another advantage which means that the customers receives special offers, better prices and
feel that they have a higher priority than other customers. It is also important to create value
for the customers if the companies are to succeed in retaining them. Companies should
therefore create consumer confidence and trust in order to make the customers return and
make re-purchases (Heinonen, 2014).
Establishing good relationships with consumers is an advantageous way to reduce the worry
that may exist when making a purchase and creating trust with the retailer. In addition,
retailers get to know their consumers, enabling them to create customized offers by
understanding the specific needs of the customer, thus creating competitive advantages
(Grönroos, 2007). CRM is an approach to work with relationship creation with consumers.
The purpose of CRM is to create value for consumers, shareholders and companies. With the
help of IT support and marketing, companies work to create long-term relationships with
their consumers (Payne & Frow 2005).
2.3 Customer Relationship Management
CRM is a concept defined as creating and developing profitable customer relationships by
delivering better customer value and satisfaction than competitors (Kermani, 2011).
According to Buttle and Maklan (2019), CRM is “the core business strategy that integrates
internal processes and functions, and external networks, to create and deliver value to
targeted customers at a profit”. The strategy involves collecting sufficient customer-related
data with the use of information technology. By having customer-related data, companies can
use CRM applications such as customized marketing promotions to maintain deeper customer
relationships and even sell more products (Karjaluoto, Kuusela & Saarijärvi, 2013).
CRM can be seen in the narrow sense as a set of activities directly derived from the customer
database (Karjaluoto, Kuusela & Saarijärvi, 2013). Overall, CRM systems are all about
taking in all possible market information about consumers to understand what they are
looking for (Kermani, 2011). CRM is largely about collecting information in order to get to
7
know their customers better and in more detail able to get one perception of what they want
instead of forcing them something. According to Srisamran and Rachtam (2014), it is
important for companies to have knowledge about their customers, and state that knowledge
of the customer is the key.
CRM as a whole has evolved into its own separate identity in recent years, as a direct result
of companies having to take advantage of customer data when dealing with them customer
relationships of various kinds. Today, CRM systems are being used more and more.
Companies get more specifics the information obtained about consumers than they use any
information they have available, all in order to meet customer needs. The purpose with the
more detailed information collection is that customers can then receive offers and solutions
that are more complete and specified according to their particular needs. (Wang & Feng,
2012)
The technology behind CRM systems does not really have to be so difficult to understand. It
can be as simple things as gathering purchase transactions, visits to websites or information
about customer surveys and the like. This information then goes through the systems that
consist of software and analysis tools that then compile all the aforementioned information
around the customer and is managed within the company to know as much as possible about
the customer. (Wang & Feng, 2012) According to Kermani (2011), the purpose of CRM
systems is to find profitable customers, create long-term customer relationships, reach them
effectively, sell more products to customers and being able to tailor offers to each customer's
profile and wishes.
CRM should not be seen as a fast shortcut to acquiring, building and maintaining customer
relationships, because that is not the idea with the concept. The first and most important step
is to build up in an old-fashioned way faithful customer relationships from the ground up.
First a human relationship before the relationship can build on technique. Wang & Feng,
2012) Kermani (2011) is clear that explain that the technical part of CRM should only be
seen as a support or guide for it human and social aspect where customer satisfaction, loyalty
and customer segmentation are main factors.
8
Furthermore, CRM can be seen in terms of internal and external (Triznova, Maťova,
Dvoracek, & Sadek, 2015). Internal CRM refers to customer centering; technology and
processes; people and culture; as well as the customer. External CRM includes products for
customers; communication with customers; cooperation with customers; as well as customer
experience. However, the internal and external interact, since all external contact with the
customer is affected by internal relations in the organization (Triznova et al., 2015). Building
long-term relationships with employees is therefore important for organizations to be able to
build long-term relationships with customers and create a unique customer experience. In this
case, both employees and customers share the organization's values. This sharing is unique,
intangible, valuable and unusual and costly to imitate for competitors. (Soltani &
Navimipour, 2016).
There are three main forms of CRM; strategic, operational and analytical. Strategic CRM is a
core customer-centric business strategy that aims at winning and keeping profitable
customers. It focuses on delivering extra value to retain customers and the employees are
usually highly motivated to deliver excellent value. It enables unique communications, which
may become quite complex in multi-channel environments. Operational CRM focuses on the
automation of customer-facing processes such as selling, marketing and customer service.
Analytical CRM is the process through which organizations transform customer-related data
into actionable insight for either strategic or tactical purposes. It involves capturing, storing,
processing and interpreting customer-related data to enhance both customer and company
value. (Buttle & Maklan, 2019)
2.4 Customer Experience
Grewal, Levy and Kumar (2009) define customer experience as:
“Customer experience includes every point of contact at which the customer interacts with the
business, product, or service. Customer experience management represents a business strategy designed
to manage the customer experience. It represents a strategy that results in a win–win value exchange
between the retailer and its customers.”
9
The quotation proves that retail customer experience can occur in multiple ways and result in
a win-win situation. It is therefore argued that the success of retailing derives from
understanding the customer.
2.4.1 In-Store Customer Experience Perspectives
Looking at existing literature of in-store customer experience, different perspectives can be
identified. First, similar to the introduction of literature, the customer perspective comprising
shopping motivations, is fundamental to understand in-store experience (Lemon & Verhoef,
2009). Second, it is followed by the importance of understanding the retail perspective which
includes levers to create a valuable store environment by means of store atmosphere, store
design and social dimensions (Grewal, Levy & Kumar, 2009). Especially, Bäckström and
Johansson (2017) argue for the imperative of a positive store atmosphere in order to provide
experience instead of the mere products or services. Moreover, the relevance of store design
as a source of entertainment and inspiration increasingly emerges (Bäckström & Johansson,
2017).
2.4.2 In-Store Customer Experience Creation
To understand how to create a unique and meaningful customer experience, it is important for
retailers to understand customer behaviour in general and customer motivations in particular
(Puccinelli et al., 2009).
As problematised in the introduction, retailers requires to modify their strategies in order to
stay relevant and attract new customers (Calienes, Carmel-Gilfilen, Arch & Portillo, 2016).
Therefore, customer experience creation turns into a key objective of today’s retailers
(Lemon & Verhoef, 2016). Shopping motives are of interest for retailers as they allow them
to segment their customer base and adapt specific marketing strategies. This is based on
motivation theory which argues for individuals’ satisfaction as main motives for consumer
shopping behaviour (Puccinelli et al. 2009).
Lemon and Verhoef (2016) argue that customer experience focuses on how the customer
responds to a company's offer throughout the customer journey. Lemon and Verhoef (2016)
also argue that the concept of customer experience is wide and should not be mistaken for
10
other customer-focused concepts. There are several different concepts in the literature that
can be linked to and that have an impact on customer experience in one way or another.
The conceptual model developed by Lemon & Verhoef (2009) discusses how companies can
use customer experiences and it forms the basis of the study. The conceptual model illustrates
customer experience management strategies which are within the company's control. The
strategies are created by the company and are intended to generate added value (Lemon &
Verhoef, 2009). An example of added value may be physical interaction with store staff
(Mossberg & Sundström, 2011). The conceptual model is based on previous research and is
illustrated in Figure 1.
Figure 1: Conceptualisation of Customer In-Store Experience
Adapted from: Lemon & Verhoef, 2009)
The conceptual model has four main components; social environment, service interface, retail
brand, customer experience dynamics. An additional six components are processed in the
model; retail atmosphere, assortment, price, customer experiences in alternative channels,
situation moderations, consumer moderations. The components of the model will be
described below.
11
Social environment is in the study events created by the company and the store staff. The
staff's behavior can affect the customer experience. Customer experiences are influenced and
influenced by the social environment in the store. For example, there are most likely several
customers in the same store, which can affect each other's experiences of the visit (Verhoef et
al., 2009). Customers can influence each other's experience through the desire to get help
from the store staff. The social environment in the store is therefore important to manage
(Mossberg & Sundström, 2011).
Service interface is within the company's control and relates to the staff, technology,
customer participation in the use of customer experience strategies and personal solutions
according to customer needs (Lemon & Verhoef, 2009).
Brand refers to the interaction between the company and the customer. Branding is important
to consider when creating customer experience strategies, as a customer's expectations of
which brands are found in the store or what experience a specific brand entails affect how the
customer experiences the store visit. How the company and the brand want to be perceived by
the customers, the company will have to take into account the strategy formulation Lemon &
Verhoef, 2009).
Dynamic customer experiences refer to how companies can create dynamic experiences,
which means that the company's customer experience strategies look similar for all
companies' stores. Furthermore, this means that customers receive similar experiences of a
company's store visit, regardless of which store the customer visited (Lemon & Verhoef,
2009).
The store atmosphere is within the company's control and relates to the design of the store. In
previous research, the atmosphere has been studied from the perspective of a sense
marketing, in which the five senses of the person are stimulated for the best possible
customer experience (Mossberg & Sundström, 2011). Design is defined as a work process
aimed at developing solutions towards the customer in a conscious and innovative way. The
12
solutions are designed by functional and aesthetic requirements based on the customer's
needs (Mossberg & Sundström (2011).
Assortment is within the company's control and refers to variation, how unique the
assortment is and the quality of the assortment (Lemon & Verhoef, 2009). The quality of the
assortment has been determined in the study based on how the assortment products
complement each other, which means the goods that complement and strengthen each other
and are likely to bring greater customer value together than individually. A wide range
consists of many different product groups with different price levels. A profile assortment has
products that the customer can expect but also goods that surprise the customer (Schmidt &
Ohlsson, 2016).
Lemon and Verhoef (2009) argue that price is within the company's control and has been
treated on the basis of price variations. The subcomponent also refers to companies' potential
loyalty programs and the impact of the marketing mix. Loyalty programs are also included
because loyal customers account for large parts of the store's sales (Schmidt & Ohlsson,
2016). Relationships with the company's most important customers are significant and
possible to influence through a loyalty program. Since members of a well-established loyalty
program account for about 60 to 80 percent of the store's sales, it is important to reward loyal
customers (Schmidt & Ohlsson, 2016).
Situational moderations refer to the nature of a store. This means if the store is a low-cost
department store, specialty store or everyday shop. Situational moderations also deal with
corporate channels such as physical stores. The moderations also include culture and season,
economic climate and competitive intensity.
Customer moderations treat the customer's purpose of visiting the store. The purpose may be
experience- or task-oriented such as a planned purchase of a specific item. Customer
moderations are individual for each specific customer and would involve extensive analysis
work that is beyond the time frame of the study (Lemon & Verhoef, 2009).
13
Physical stores depict a touch point where retailers have a great stake in shaping customer
experience. This is due to the fact that they can influence a significant part of the shopping
environment. Customers are becoming more demanding which is why the mere satisfaction is
not enough anymore but a unique and memorable experience is needed. The importance of a
positive customer experience is greater and more important than ever for business success.
(Bäckström & Johansson, 2017)
2.4.3 In-Store Customer Experience Challenges
In the physical store, sales and customer service are two key aspects, the store staff plays a
crucial role in the customer's experience of the store visit. Physical stores therefore need to
use both immediate experience and non-immediate experience (Johansson, 2018). In addition
to the immediate experience, for example, staff involvement in the store is an experience in
itself. The customer's satisfaction is often influenced by how the customer experiences the
interaction with the store's staff. The friendliness and expertise of the staff are therefore
important for future store loyalty. Staff service can contribute to a good shopping experience
(Johansson, 2018). The staff represents the company and thus factors that the company wants
to be associated with. The personal response that the customer receives from the store staff is
thus crucial to how the customer experiences the store visit. Relationships between store staff
and customers increase the customer satisfaction of the store visit. (Schmidt & Ohlsson.
2016)
First, there is the personal interaction between the retailer and the customer which can be
reinforced by sensory effects, such as the opportunity to try out products (Rigby, 2011).
Second, physical stores possess the advantage of providing immediate product transaction
(Rigby, 2011). Third, an essential part of the decision to buy is spontaneous and triggered by
cues placed within the store environment. Making use of these advantages answers the
desires of recreational and hedonic shoppers in particular (Rigby, 2011). Nevertheless,
convenience shoppers can be attracted by a smart integration of other channels, too. Apart
from this, the aforesaid virtues can be played in a way to differentiate offline from online and
use physical stores to create entertaining, educational and exciting moments that attract and
inspire consumers and make them stay in the store (Sachdeva & Goel, 2015). According to
14
Sachdeva and Goel (2015), this relates to the matter that offline retail is not about the mere
transaction anymore but about creating a unique experience.
As described before but more specific to offline retailing: “Customer experience is a
manifestation of customers’ perceived cognitive, emotional, sensorial and behavioural value
derived through their interactions with store clues during the entire process of shopping”. In
order to influence the customer’s experience, retailers need to understand which elements of
the store environment lead to a perception of desired in-store experience.
First, similar to our introduction of literature, the customer perspective comprising shopping
motivations, is fundamental to understand in-store experience (Puccinelli et al. 2009). This
entails the generation of utilitarian and hedonic consumer values through achievement of
goals or recreation. Second, it is followed by the importance of understanding the retail
perspective which includes levers to create a valuable store environment by means of store
atmosphere, store design and social dimensions (Grewal et al., 2009). Especially, Bäckström
and Johansson (2017) argue for the imperative of a positive store atmosphere in order to
provide experience instead of the mere products or services. Moreover, the relevance of store
design as a source of entertainment and inspiration increasingly emerges (Bäckström &
Johansson, 2017). Also, the retail perspective includes the social dimension at the point of
sale, referring to the interaction between customers and the service encounter itself.
2.4.4 Customer Engagement as a Way to Enhance Customer Experience
As highlighted before, customer experience is created through interaction and depicts a
product of co-creation. Referring to Lemon and Verhoef (2016), customer engagement is one
of the fundamentals of customer experience. Therefore, the principles of customer
engagement will be illustrated which contribute to the whole experience in order to
strengthen the retailers’ brand perception and to increase footfall.
Over the past decade the term customer engagement has been explored by different
researchers in marketing (Pansari & Kumar, 2017). While there are different terminologies
used to describe this emerging field of research ranging from customer engagement over
customer brand engagement to customer engagement behaviour, first and foremost, the
overall concept encompasses the interaction between a customer and any other party (e.g.
15
company, brand, other customer) at any stage of the customer journey (Lemon & Verhoef,
2016). Therefore, customer engagement builds customer touch points which then can result in
customer experience (Lemon & Verhoef, 2016). Similar to customer experience, customer
engagement goes beyond the mere transaction activity and is motivation driven. Some
researchers even describe customer engagement as a motivational state (Lemon & Verhoef,
2016). That is why its intensity depends on the level of behaviour, attitude and connectedness
between the customer and retailer (Pansari & Kumar, 2017).
Hollebeek (2011) conceptualises the customer-brand relationship as a product of customer
engagement. According to her, positive involvement can lead to engagement in terms of
cognitive, behavioural and emotional activities which in turn impacts the quality of the
relationship between customer and retailer. On the one hand, again, this fosters the
engagement behaviour; on the other hand, it can result in increased loyalty towards the
retailer and its brand (Hollebeek, 2011). Putting this into practice, Kumar (2013) argues for
engaging customers by stimulating customer referrals, evoking customer feedback on
offerings and involving customers in the retailer’s social media presence (Kumar, 2013).
Furthermore, Hollebeek (2011) concept reveals the beneficial aspects of positive customer
engagement as part of customer experience. Thus, retailers operating in today’s challenging
environment need to encourage customers to engage with their brand other than during the
mere transaction (Kumar & Pansari, 2016). Even if initial investments in designing an
engaging store environment are required, it will result in potentially profitable outcomes in
the long term (Lemon & Verhoef, 2009).
2.5 Customer Satisfaction
Customer satisfaction is defined as “a person’s feelings of pleasure or disappointment that
results from comparing a product’s perceived performance or outcome with the person’s
expectations” (Kotler & Keller, 2016). One theory that is used to examine the satisfaction of
customers is the expectations-disconfirmation theory (EDT). The theory implies that a
positive disconfirmation occurs when the perception of customers exceeds the expectations,
which is what a company wants to accomplish. If not, a negative disconfirmation will occur
which leads to dissatisfaction. The EDT was proposed by Oliver (1981) as an explanatory
framework to comprehend the process of expectation disconfirmation. The EDT holds that
16
expectations, together with product or service performance, determine customer satisfaction.
In turn, this effect is mediated by the positive or negative disconfirmation with customers’
expectations through product or service performance. The expectations will either be
negatively disconfirmed whenever the product or service performs below expectations, or
confirmed whenever the product or service performs as expected, or positively disconfirmed
whenever the product or service outperforms expectations. The EDT has been applied to
elucidate user satisfaction as the disconfirmation of preadoption expectations based on post
adoption performance of technological systems. (Liu, F., Lim, E., Li, H., Tan, C. & Cyr, D.,
2020). A higher level of customer satisfaction leads to greater customer loyalty and
word-of-mouth (WOM) recommendations (Yoo, Huang & Kwon, 2015). A highly satisfied
customer is also likely to continue shopping for an extended time as long as the firm produces
new products and the existing products are improved.
2.6 Frame of Reference
The frame of reference builds upon the previous literature presented throughout the chapter
and it illustrates how the central elements of the study are interlinked. The purpose of this
thesis is to examine how store attractiveness can be increased through the surrounding
aspects. Based on the literature presented above, a depiction will be presented of the aspects
of in-store customer experience taking into account from the customer as well as the retailer
perspective. The presented theoretical framework comprising in-store customer experience
revealed the relevance of customer experience in today’s retail world.
17
Figure 3: Relationship between how in-store customer experience can be used to create customer satisfaction
and attract consumers to physical stores. (Own Illustration)
The research questions are related to certain parts. In Figure 3 above, the upper half of the
model is concerned with answering the first research question: What aspects need to be taken
into account when creating customer experience? A closer look on in-store customer
experience enabled to identify key aspects which impact the experience, customer
engagement and emotions. By finding the right balance between engagement and emotions,
the retailer can increase the in-store experience. Moreover, by facilitating interaction with the
staff, the product and the brand overall, engagement can also lead to a more positive
customer experience. The store staff plays a crucial role in the customer's experience of the
store visit. (Johansson, 2018). Social environment is in the study events created by the
company and the store staff. The staff's behavior can affect the customer experience.
Customer experiences are influenced and influenced by the social environment in the store.
For example, there are most likely several customers in the same store, which can affect each
other's experiences of the visit (Lemon & Verhoef, 2009). Furthermore, by combining the
aspects atmosphere, design and senses in an attractive way, the retailer can appeal to the
customer’s emotions and hereby enhance the in-store experience, too.
18
In Figure 3 above, the lower half of the model is concerned with answering the second
research question: How do the retail stores work with customer relations to attract consumers
for re-purchasing? Lemon and Verhoef (2016) consider that customer satisfaction is one of
the components of customer experience. Furthermore, they believe that it is possible to argue
that customer experience is a development of customer satisfaction and that a high customer
satisfaction leads to a good customer experience.
Quality is the totality of features and characteristics of a product or service that bear on its
ability to satisfy stated or implied needs (Kotler & Keller, 2016). It can be stated that
customers who are satisfied with the services they have experienced, are more likely to
establish loyalty which results in repeat purchases and favorable WOM. (Kamrul & Rahman,
2015).
Rahman (2014) argues that customer satisfaction depends on service quality and customers
who are satisfied with the services they have experienced, are more likely to become loyal to
a certain company or brand, resulting in re-purchase intention and WOM to other consumers.
It is therefore important that the customer perception of a certain shopping experience
exceeds the expectations of it and moreover, companies should focus to delight customers by
offering more than the expected performance of a specific product or service that could
surprise customers in a positive way.
19
3. METHODOLOGY ——————————————————————————————————————————
This chapter will present how the methodology is used in the thesis and why each method was chosen
and its relevance. A presentation how data is collected in order to answer the purpose of the thesis
will be given.
3.1 Research Purpose
When conducting a research the first step is to define the research purpose and there are three
different types of research purposes; exploratory, descriptive and explanatory (David &
Sutton, 2016). Either the study is classified into one purpose or a combination of more than
one. According to Saunders, Lewis and Thornhill (2016) exploratory studies tend to have a
broad focus since the aim is to gain insights as the study progress. An alternative to
exploratory studies is descriptive ones which seek to answer questions such as what, when,
where and to whom. As in exploratory studies, the reason for conducting descriptive studies
can be insufficient investigation for a particular topic. In an explanatory method on the other
hand, a descriptive examination is required but is followed by an explanation of underlying
relationships of the situation and causality (David & Sutton, 2016). Since the survival of
physical retail stores has been a hot topic among researchers, this study is exploratory due to
its strive to clarify and shed light on an area of research in a different context. An exploratory
research is characterized by having a purpose that attempts to build an understanding of a
situation without much previous investigation. (David & Sutton, 2016).
This research is exploratory with the aim to gain new knowledge and insight of how
electronic stores attract the consumer to their retail stores. The advantage is that an
exploratory study has the possibility to be flexible and adaptable to changes. Furthermore, a
possibility to change the direction as a result of getting new insights because of the retrieved
data has to be able. The author also emphasize that the flexibility does not implicate an
absence of direction rather that the focus originally is broad but incrementally becomes
narrower as the research develops. (Saunders, Lewis and Thornhill, 2009) An exploratory
study is preferred, since it enabled this thesis to review and analyze concepts in related fields
in order to embrace new findings.
20
3.2 Research Approach
The second step when conducting research is to define the approach of the study. There are
two types of research approaches based on the type of collected data; qualitative and
quantitative. Quantitative studies are characterized by measurement of variables, objectivism
and hypotheses. Such research tends to have high generalizability thus making the
circumstances repeatable. Qualitative studies emphasize words rather than numbers, have a
subjective focus and are examined through research questions. The nature of qualitative
studies implies that a deep understanding of a relatively small selection of people can be
obtained. (David & Sutton, 2016) Since this study aims to provide a deeper understanding of
how physical stores must use the advantages of creating in-store experience in order not to
lose market shares to e-commerce, the research approach was qualitative. Qualitative studies
are mostly adapted in exploratory researches. This thesis does not aim to find numerical
generalizations and therefore, quantitative data is not suitable.
In turn, the research process can be either inductive or deductive or a combination of the two
concepts which implicates considerable differences for the execution of data collection.
Deductive studies is build on existing theory and creates hypotheses that are either approved
or rejected from an empirical review. Inductive studies seek to explain certain phenomenon
by analyzing findings from empirical data. Inductive studies are deliberately more open in
research questions, interviews and in the sample selection process compared to the deductive
counterpart. (David & Sutton, 2016)
The aim of the research is to explore what strategies consumer electronic companies uses to
keep their customers in the physical stores as they compete with the e-commerce.
Furthermore, it aspired to describe how to keep their customer relations and attract them to
the physical retail stores. This thesis had a deductive approach since its findings was based on
existing theories and previous research.
21
3.3 Research Strategy
The strategy of a research aims to provide the author with a plan on how they will proceed in
order to answer the proposed research questions and meet the research objectives (Saunders
et al., 2016). In order to gather the empirical data, interviews was used.
An interview guide contains of a number of questions for the respondents to answer (Bryman
& Bell, 2015). Bryman and Bell (2015) explain that, when structuring an interview guide, it
is important for the researchers to clarify what the researchers need to know in order to
answer the research question. Moreover, it is beneficial to divide the questions into different
topics which all are important to examine in order to answer the research questions.
Therefore, when constructing the interview guide (see Appendix 1), several questions were
designed regarding each concept and all questions were equally important in order to answer
the research question.
According to Bryman and Bell (2015), there are several types of questions that should be
asked since the different questions have different purpose. For instance, introducing questions
which inform the respondent about the topic and follow-up questions which allow the
respondent to elaborate on his/her thoughts. Interviews in a qualitative research can be either
structured or unstructured. According to Saunders et al. (2009) in structured interviews, the
interviewer asks specific predetermined questions. In semi-structured interviews, only, a few
questions are predetermined, and the rest of the questions are not. In unstructured interviews,
none of the questions are predetermined and informal (Saunders et al., 2009).
Since the aim of the thesis is to get a deeper understanding in how the company works with
customer relationships, it was relevant to conduct interviews since this method is associated
with a qualitative study and an explorative study (Bryman & Bell, 2015). In semi-structured
interviews, the respondents have the ability to express themselves more openly since the
interview is adjusted to the specific circumstances that prevail. This means that appropriate
questions can be asked and that the order of them can vary among the occasions. In contrast,
structured interviews are conducted in such a way that the questions must be equal and that
the order must remain the same throughout the entire process. One advantage associated with
22
this approach is the fact that the respondents are able to talk relatively free in order to be able
to elaborate on his/her thoughts and opinions (Denscombe, 2018). Further, semi-structured
interviews allows one to control the interviews and gives the opportunity to direct the
respondents into certain topics in order to gain useful information. The reason for why
deciding to not adapt structured interviews is because that approach would have limited the
respondent to elaborate on his/her thoughts because of the well-structured questions
(Denscombe, 2018).
3.4 Data Collection
Collecting empirical data is the next step after deciding the research strategy. There are two
ways of collecting data; secondary or primary collected data (Saunders et al., 2009).
Secondary data is information that has been collected previously, and primary data is new
information and first-hand research. Primary data has collected information through
interviews, observations, and surveys. (Saunders et al., 2009) Common data collection
methods within the qualitative research approach are various types of interviews,
observations and archive studies. As mentioned, these methods strive to obtain data in the
shape of words rather than numbers (David & Sutton, 2016). As mentioned, primary data
collection has been acquired through interviews in order to fully understand how companies
work with customer experience to maintain customers in physical stores.
Before the interviews took place, the interviewee was contacted in order for the author to
mediate the study’s message and how the interview would be executed to build assurance
(David & Sutton, 2016). The interviewee was also asked for consent for the interview to be
recorded which enabled transcription of the results. During the interviews, the developed
interview guides were followed, as seen in Appendix A and B, with the possibility for asking
supplementary questions to be able to fulfill the purpose of the study. The questions that were
asked during the interviews were unstandardized to partly standardized which entails that the
respondents were asked to discuss a subject or answer questions with the help of guidelines.
Moreover, the interviews were performed in calm environments to ensure that the
participants would not be interrupted during the conversation and to avoid unnecessary
tension (David & Sutton, 2016). Regarding the consumer subgroup, they were stopped
randomly in the store with an approval before the interview took place.
23
3.5 Sample Selection
Sampling techniques are useful when it is not possible to analyze an entire population due to
financial constraints, access issues as well as lack of time (Saunders et al., 2016). Also, it is
often necessary to solely collect data from a subgroup to gain a deeper understanding of a
certain topic. In this study, two populations were of interest. The first one was experts within
the company with different expert areas and the other one was consumers who shop from
their retail stores. For both of these groups, the unit of analysis were the interviewed
individuals since their opinions were the only empirical data that was of importance for this
study. The subgroups of the populations were chosen according to established sample
selection techniques which can be categorized as probability sampling and non-probability
sampling (David & Sutton, 2016). The first mentioned technique implies that all individuals
belonging to a population have an equal chance to be chosen whereas this is not the case for
non-probability sampling where it does not give each in the population equal chance of being
selected (Saunders et al., 2016). For this thesis, it was very important to reach people who
had experience within the company, thereby it was judged to be best suited to start with a
purposive sampling. Purposive sampling allows researchers to select individuals that are most
appropriate for answering the research questions and snowball sampling means that identified
participants can help the researchers find more qualified people through his or her network
(Saunders et al., 2016).
For this thesis, non-probability sampling was used since the respondents must have
knowledge within the field of interest. According to Saunders et al. (2009), this method is
helpful when having limited resources. This is also called judgmental sampling and is a type
of probability sampling method. This way, the researchers can use their own judgment to
select individuals to interview study (Saunders et al., 2009). Since this study has chosen to
look deeper into how Elgiganten work with keeping relationship with customers by creating
in store experience, it is required that the selected individuals for the interview are employees
at the companies and are working with customer relationship. This thesis will interview
employees from the company's management team and the customers who visited the store.
The respondents are working at the company with a minimum of 10 years’ experience.
24
Moreover, consumers with different age, gender and shopping habits were chosen to increase
the study’s transferability and avoid bias due to these factors.
Table 1: General information about consumers, A-H
Respondent Gender Age
A Male 29
B Male 46
C Female 24
D Male 22
E Male 47
F Female 44
G Male 68
H Female 55
Table 1 shows that eight consumers with varying age, gender and shopping habits were
interviewed. The number of participants were judged to provide enough perspectives and
depth for the analysis of the empirical data.
3.6 Data Analysis
After collecting the data, it later needs to be analyzed (Saunders et al., 2009). According to
Yin (2009), it is significant to always return to the research question when analyzing the
collected data. There are three different strategies when analyzing a case study; relying on
theoretical propositions, developing a case description, and examining rival explanations.
The data that was gathered from the interviews were transcribed into text to be able to
identify common opinions, themes and notions. According to Saunders et al. (2016), it is
important to consider not only what is said during the interviews but also in what tone the
participant responds, which is why transcribing can take a lot of time and effort. David and
25
Sutton (2016) discuss that the process of analyzing qualitative data is to great extent involved
with reducing a large amount of text by selection and organization.
Qualitative data can be analyzed through five different phases which are described below.
The process often starts with categorization which allows the researcher to specify categories
and give each of them a name or, with other words, a code. The following activity is called
unitizing which means that the data is divided into the relevant categories and after this
phase, the researcher will identify key themes and patterns in the answers. The fourth phase
of the qualitative analysis is to test the propositions of the developing theory. This means that
the researcher looks for alternative explanations to see whether the identified themes and
patterns are judged accurately. The final step is to draw and verify the conclusions of the
study (David & Sutton, 2016).
The data from the interviews are compared with existing theories and research that are
presented in the frame of reference. The data has further been simplified by deciding what
part is relevant to analysis further and finally, after careful analysis, the conclusion has been
drawn.
3.7 Quality Standards
To decide the credibility of data and findings of a research, the degree of reliability and
validity have been considered. The two concepts can be used to be able to confirm the quality
of the study. (Bryman & Bell, 2015) A study should always try to have a high degree of both
concepts to ensure greater accountability of the provided results, this is not always possible
though. (Saunders et al., 2016)
3.7.1 Reliability
Reliability is concerned by how accurately the study’s measurements have been
accomplished. The purpose of reliability is to minimize the large part of the errors and biases
in the study. (Saunders et al., 2016) Reliability also means that another researcher should be
able to discover same results if the data collection and analysis were conducted in the same
manner as previous studies but with new participants. The goal of the study is therefore to
make less errors and biases (Yin, 2009). Bias is a common term regarding the reliability of a
26
study and is an issue related to the qualitative interview. According to Saunders et al. (2016)
the threats are categorized in four groups which are participant error, participant bias,
researcher error and researcher bias. The first, participant error is concerned with mistakes
that accurses when the same case gives different findings and answers. The second threat
considers biases when the interviewee gives expected answers that are not honest. Research
error means that there are different ways of implementing a study, and therefore, the chosen
applied way must have a clear structure. The last threat relates to the subjectivity of the
person interprets the data. (Saunders et al., 2016)
To ensure high reliability and avoid inconsistency throughout this study, all of the threats
were considered. Firstly, the time of interviews were selected in such a way that the
respondent should not feel stressed or tired. The interview question guide was made in
Swedish and then translated into English and the questions and answers was reviewed
carefully to minimize the risk of being subjective. To be able to maintain a high reliability as
possibly, the interview guide was made with questions that was easy to understand without
attaching the questions to a given answer. Sometimes it can be hard to justify a high degree of
reliability for studies primarily conducted through interviews. This is because it is not
possible to estimate the data in numbers with statistical assurance, meaning that consistency
of results may be hard to achieve. This is where any errors and biases such as stressful
situations or other personal factors could compose as threats for reliability. (Saunders et al.,
2016)
3.7.2 Validity
Validity can be defined as the match between data and reality. The term can be divided in
three general parts; construct validity, external validity and internal validity. Internal validity
is the match with what is being studied while the match towards a greater perspective is
called external validity. (Saunders et al., 2009)
The internal validity indicates whether the study’s results are measuring what the study wants
it to measure (Saunders et al., 2009). To create a high internal validity, a literature study that
is including previous established theories with tested concepts have been created by the
researcher. The study’s validity will therefore be increased and it will make it possible to
27
measure what the researcher intend to. In this study, the interview questions was given an
acceptable cover for the reason of being able to answer the study’s research question. As for
the reason of the respondent’s anonymity, it gave them the opportunity to give their answers a
more detailed explanation. This increase the validity as well, since the consumers had the
possibility of giving their own understanding of their experience with reality (David &
Sutton, 2016).
The external validity constitute in the extent as the results can generalize to other social
environments and situations (Bryman & Bell, 2015). This have been shown to constitute a
more comprehensive difficulty for the qualitative researchers since the studies normally are
made as case studies with a limited sample selection. The challenge of being connecting the
research to other cases and being able to make a generalization was a problem that the
researcher was already aware of in the beginning of the research. The choose of doing a
qualitative approach did come from the fact that the study wanted to go deeper for the reason
of being able to analyze it against previous studies rather than examine broad and only the
surface. The selection of the purposive sampling do also lead to a limitation in the studies
generalization. With this said, the studies external validity is limited and can be consider
relatively low. The studies validity does however not lie in the external type but in the
internal type.
The number of interviews may be a threat to the external validity. This thesis do not strive to
generalize the findings. This thesis is constructed in English and since the interviews are
conducted in Swedish, it may affect the translation and in turn the reliability of the study.
However, the questions as well as the answers have been carefully translated. The reliability
of the interviews have been tested by asking the questions to a independent person. This to
ensure that the questions are understandable.
28
4. EMPIRICAL DATA ——————————————————————————————————————————
This chapter will present the empirical data through interviews with employees at the company with a
higher ranking. Each of the two interviews was on average 30 minutes, and therefore, only the key
points are presented to give the reader an overview of the answers and to facilitate understanding of
the most important sections.
A presentation of what the interviewees stated regarding how consumers experience physical
visits and additionally, how the managers within the company should work with customer
relations in order to create customer experience is provided below.
4.1 Shopping Behavior
The company use e-commerce as a tool themselves. Head sales manager 1 states that
e-commerce is an opportunity for them to this extent that they can sell over the internet. What
could pose a threat is that more stores are being established on the internet, resulting in more
intense competition. Head sales manager 2 states that the company combines its sales
channels by having both physical stores and e-commerce, while at the same time Elgiganten
has the intermediate variant collect at store, which is a feature where you can reserve your
product on the website and then collect it at the store. He claims that since they have the same
prices on the internet as in stores, customers can see an advertisement on the internet and then
enter the store to pick up the product and see its performance. The company can thus use the
internet as a complementary tool for selling in stores.
Head sales manager 3 claims that they offer physical stores a completely different
transparency than online, which means e-commerce and physical commerce can complement
each other. He also believes that e-commerce poses a threat to the physical stores because
customers probably think they can purchase the same products cheaper over the internet.
Head sales manger 1 also believes that older customers will continue to demand physical
stores.
29
The most consumers visit the store minimum two times per month. Consumers have different
purposes when visiting the store and the shopping behaviors differs from person to person.
Consumer A claim that he always has a purpose when visiting the store and discover a need
of purchase when something breaks or when a main product needs new accessories or
components. He usually search information online and then asks the staff to see if they have
any further information or can recommend other alternatives. Consumer B visits the store
without any need of buying products. The most visits are just for examine and experience the
new products. Consumer C agrees with consumer B with the previous statement and claims
that most of the visits often are for the purpose of accompanying a friend or family member.
Consumer D claims that he often has these ”want-desires”. When it comes to something he
needs it is usually about something he finds disturbing in the everyday life and then he asks
himself the question "is there anything that can help me in everyday life?”. Like consumer A,
he search information about the product he needs online and then visits the store for
purchasing. Consumer E argues that he often visit the store when in need of something but
always is curious about new arrival products and claims that he often know exactly what he
wants and needs and does not need any further help. Consumer F agrees and means that he
often visits the store in order to get information about new products since he experience that
the staff within the store often have the knowledge to explain it to him.
Consumer G visits store about once a week and since she is a pensioner she has a lot of spare
time. However, she mentions that she often visit the store in need of the service and support
center. If they recommend any products that she needs she buys it. Consumer H only visits
the store four times per year. She discovers her needs through reflections, friends and
advertisement and only visits the store when in need of something. The purchase process is
often protracted and starts with asking family and friends before visiting the store.
4.2 Customer Relationships
Head sales manager 3 claims that customers who visit a physical store can take part in social
interaction and the staff competence. In addition, many customers enjoy being able to pay at
the store instead of over internet, which can be perceived as insecure. The opportunity to get
a better deal through discussion with the staff in the store is also an advantage that is only
offered in physical shops. Physical stores in the electronics industry will definitely remain in
30
the future, but they will need to work in symbiosis with e-stores. He also believes that if a
company only has one physical store without complementary e-commerce, the store is
doomed to failure.
Head sales manager 1 claims that the personal service becomes stronger in a physical store
where the staff can inspire and influence through recommendations and advice. When
customers visit the store the staff can offer another comprehensive solution. They can more
easily answer customer questions and make sure they have everything they need. When
customers shop over the internet it is not sure that the customer has bought all the necessary
accessories. Head sales manager 2 adds that service is an important element of the physical
store, especially among them who are older. Older people often want more help in the store,
while younger people are often more driven to check out on the internet to find an answer to a
question.
Establishing good relationships and creating trust with consumers is an advantageous way to
reduce the worry that may exist when making a purchase. Consumer A that always despite
the information search online asks the staff to see if they have any further information means
that in order to feel trust the company should be helpful when something goes wrong, for
example when a product breaks down, replace it without hassle. Other than trust he means
that factors that affect his purchase is price, location of the store, past experiences of the
brand. Consumer B who visits the store without any need of buying products and just for
examine and experience the new products claims that if the company wants to gain his trust
he expects knowledge from the staff and quick handling of complaints and reclaims. Factors
that affect it there will be a purchase or not is if the company have the item he is searching for
in stock. Consumer C also agrees with B with the previous statement of factors that affect it
there will be a purchase or not is if the products is in stock.
Consumer D claims that regarding trust, the company could adapt treatment after the
customer. If I ask for help I wish for a professional response without a lot of guesses to
answer. If the store is neat and tidy it also gives a good impression. These are also the factor
that affects the consumer’s purchase. Consumer E means that there is several ways to gain a
customer trust. One way is to make the customers feel special and care about the customer.
31
Even if he ask for a certain products, the staff could recommend other products and make
sure he has all the accessories she needs. Consumer F claims that if he gets correct
information it will increase his trust. Consumer G means that if the company want the
consumers to have their trust the staff needs to be honest and genuine towards their customers
and does not want to be deceived. Consumer H who rarely visits the store claims that it is
important with the after-sales service. To cite her own words ”the deal is not closed just
because the item is sold”, which is important to gain trust. The few times she visits the store
she purchases if they have the item in stock.
4.3 Customer Relationship Management
The strategy involves collecting sufficient customer-related data with the use of information
technology. By having customer-related data, companies can use CRM applications such as
customized offerings to maintain deeper customer relationships.
The CRM & loyalty manager claims that an important element in creating customer
relationships is to create unique offers, which the company is trying to do through their CRM
system. The CRM system consists of, among other things, a customer club where customers
receive emails with offers. In addition to the work with the CRM system is the personal
contact when customers visit the store is an important element of the work with relationships.
CRM & loyalty expert 1 believes that a feature of the work with customer relationships is to
try to build a so-called ambassador customer, which means a customer who wants to come
return and buy from the same seller recurring. Expert 1 also believes that another important
element in the work with customer relations is that the staff should try to recognize the
customers and talk to them and get them to feel unique. Once the relationship is established,
the price picture is not as important to the customer.
CRM & loyalty expert 2 claims that the company has a service center to help all customers
with their problems. In addition, the staff is usually trained to understand the electronics and
thus be able to help customers. Internal training of the staff is an important element of the
service, as is follow-up on individual level.
32
Head sales manager 1 believes that it is not complete easy to put into words how the
company works to establish long-term customer relationships. An important elements of the
work are training courses that ensure that the staff is knowledgeable and service minded. If
the staff possesses this knowledge, customer relationships will build themselves. An example
of how a long-term customer relationship can be started is to offer a customer one better price
for them to come back. When a customer continues to buy from a specific seller, as well as
the prices and supply are competitive, contributes to create long-term customer relationships.
CRM & loyalty expert 1 believes that long-term customer relationships are created if the
company succeeds in meeting the customer's needs. The customer should feeling that it has
got everything it is looking for and that it has not missed anything it may need.
The CRM & loyalty expert 1 states that the company’s CRM system has close links to the
their customer club. Through the customer club, customers can receive digital receipts over
mail, follow-up of purchases and targeted offers to the specific customer. For example, a
customer who bought a smartphone can get offers for cover and wallets or subscriptions.
Through the customer club the company also gets the statistics on what the customers are
looking for. The CRM & loyalty manager believes that they use CRM extensively and
through the CRM systems the staff can keep track of their customers. The database also
records customer data, purchase transactions and statistics as the company can base their
customer offers on. By join the customer club Elgiganten offers some advantages. The
customer has the right to return the products within 50 days instead of 30, customized offers
are sent to each member every month and some offers only applies to the club members.
Consumer A is a member of the loyalty program but the consumer means that he feel like it is
meaningless, and consider it most like spamming. Consumer B agrees with previous
consumer, being a member of the program has not benefited consumer B in any way and has
not experienced any offering customized to the customer. However, consumer C is also a
member and claims that it has benefited while purchasing in the store when a certain price
only concerns club members. Consumer D claims that he is a member of the customer club
and appreciates some of the benefits, especially the opportunity to receive the receipt copy by
email, but other than he does not find the news letters appealing. Consumer E is a member
and claims that the email is not significant but agrees with consumer C that is has benefited
33
while purchasing when some prices only concerns members. Consumer F is unsure if he is a
member or not. Consumer G is also a member and like consumer D appreciates a copy of
receipt by email. Consumer H is not a member.
4.4 Customer Experience
Head sales manager 2 claims that many customers find the volume of products on a website
overwhelming. Sorting through 25 different results for “phone charger” is the opposite of
convenient. One of the reasons customer use the internet to find information is the impatient
for customer to wait on a sales person, head sales manager 3 claims. Head sales manager 2
also believes that services in stores is essential for customers. It is important to analyze and
what customers pay for and try to help them with problems that can occur everyday.
Head sales manager 1 believes that within this industry they have an advantage. Since the
products within consumer electronics often needs to be experienced in a physical way, he
means that the customers automatically visits the store. For example, customers who want to
buy new speakers need to listen to the sound the in the actual store.
The head sales managers all agrees that creating customer experience is about understand and
solve customers challenges, build a positive connection with the customers and ask for and
act on feedback from customers on how to improve.
Regarding how the consumers perceive experience, consumer A visits the store since he
believes it has plenty of space with a good assortment. What he believes is the most
important factor for a good experience is good service when requested. Last time he visited
the store he experienced a good customer experience when the staff helped him utilize a price
match which means that if he wants to buy a product and the price differs in another store, the
customer gets the same price. Why he prefers this store is because he knows he gets better
service. Consumer B visits the store since he believes that the products he need is mostly in
stock. A good experience to him is a good connection between the staff and him as a
customer. He had a good experience last time he visited the store and utilized their price
match. Consumer C agrees with consumer A regarding the reason why visiting the store. She
has a good experience when the purchase is smooth without any hassle.
34
Regarding the in-store experience, consumer D claims that the reason he visits the store is the
product range, since consumer electronics is of his interest. When buying these products he
wants that the store is neat and clean och educated staff. He has recently visited the store and
had a good experience since the product he was looking for was in stock. Regarding customer
experience he means that he has become more aware of how a good experience in the store
feels, which leads to a higher demand when visiting retail stores in general. Consumer E
always interact with the staff in order to get information about new products and means that
when he can discuss the products with someone who has the knowledge is a good experience
to him. Consumer F agrees with consumer C regarding smooth purchases which is a factor
for good experience. Consumer G expects kind and helpful staff. She believes she always
gets the help she needs. Consumer H agrees with the other consumers regarding the good
service when requested.
4.5 Customer Satisfaction
Customer satisfaction is about a person’s feelings derived from a product’s perceived
performance or outcome with the person’s expectations. The company gets customer reviews
everyday. Head sales manager 2 claimt that they have staff working with customer service
one of the tasks is handling feedback from customers. The best way to handle reviews and
feedback is to listen carefully. He means that we do not try to prove our customer wrong,
instead we ask questions and try to resolve issues quickly. Head sales manager 1 adds that the
customer encourages to write review. At the website the customers can write reviews in order
for other customer to see, and in-store they use a thing called “Happy or Not”, where
customer can choose a happy or an unhappy face in order to express their experience, and
also leave a comment. Head sales manager 1 claims that the stores reviews the feedback from
the last open day everyday. In that way the are able to know what to improve for customer
satisfaction.
Consumer A, B, C, D and F often discuss their purchases with other. Especially consumer C,
she always tells what she has purchased to everyone she knows. Consumer A preferably shop
in physical stores, about 90% of all purchases since you can see the thing in real and there is
no waiting in order to get your product. He claims that this is his favorite store and company
in this category. Consumer B claims that half of his purchases is 50 percent online and 50
35
percent offline.If the products are in stock he likes to shop directly in stores, if they are not
in stock, he order them directly online.
Consumer C claims that she always makes her purchases in the store, she does not want to
wait in order to get the product. Consumer D also always makes the purchases in a store. The
only time he makes a purchase online is if the product cannot be purchased in a store near. A
value-adding factor for this consumer is that he can feel safe and secure with the purchase
afterwards. If he has a problem with the product he expects help and if something has gone
wrong, the opportunity to return the item or fair compensation if possible. He also claims that
if he is treated badly he mostly want to visit other stores for future purchases, but if the
product is in stock he will buy it anyway. Overall, shopping in a physical retail store feels
more safe rather than shopping online to this consumer. Partly because if he has decided that
he wants a certain product, he value the time from decision until he gets the product more
than if the same product is cheaper online. His thoughts about the company is overall very
good. To describe with his own words: “There are good customer guarantees and I get the
help I need. If I have had problems after my purchase, I have always received help with
complaints and had products exchanged.”
Consumer E and consumer F had the same opinion about what is value-adding when
shopping in a retail store, they want to experience the products and have them right away.
Consumer G agreed with consumer B and shops both online and offline, depending on if the
products are available in the store. He claims that if the staff informs him about an offer on a
product similar to the one he is purchasing it is value-adding for the satisfaction of the
purchase. Consumer H believes that a value-adding factor is the interact with the staff. If she
has a good conversation with the staff there is a good experience and then she feels satisfied.
All customers received a question with an answer option where the question reads:. Which of
the options do you appreciate most in a store and why? The options were: being able to easily
find the products for making a purchase, environment and experience, interaction with staff.
All of the consumers answered being able to easily find the products for making a purchase
except consumer D who chose environment and experience and consumer H who chose
interaction with the staff.
36
5. DATA ANALYSIS ——————————————————————————————————————————
This chapter presents the analysis of the empirical data. In this section, the results outcome will be
discussed and this will be done with help from the literature review.
Throughout this thesis, the author discovered the importance of an attractive in-store
experience that complies with consumers’ motivations and expectations in order to increase
retailers’ relevance. However, the author also found a variety of different motivations and
expectations as well as aspects of in-store experience, the complexity of creating an appealing
experience became apparent as well. This is in line with previous literature (Lemon &
Verhoef, 2016). The author was also able to gain an insight into the desires of the consumers
which allows for an in-depth understanding of where the motivations and expectations come
from.
5.1 Customer Shopping Behaviour
In the empirical study, it was discussed that the e-commerce is growing and that it is mainly
noticed by the increased number of digital orders. The stores' observation corresponds to
research conducted by Jeansson et al. (2017) who found in their research that e-commerce is
growing. The managers stated in the interview that the company combines its sales channels
by having both physical stores and e-commerce. Since some of the customers tend to search
information online and then visits the physical stores, “collect at store” is a innovative idea.
The physical stores in the electronics industry definitely have a future since the older and also
the younger participating in the interview demands physical stores.
5.2 Customer Relationship
When companies in the electronic industry want to create customer relationships, they do that
little extra for the customer, in order to create a so-called ambassador customer who returns
to shop and become an ambassador for the company. The respondents from a retail
perspective describe the importance of the customer in focus and they clarify that the store's
sales people should observe each customer and do a customer analysis to determine the needs
of the customer and what it is looking for, in order to create relationships with customers.
37
What the respondents describe such as doing the little extra for the customer and focusing on
the customer can be compared with Peppers and Rogers (2013) term as creating added value
for the customer. However, it is interesting that none of the respondents cite the ability to
build trust as an important step behind building customer relations, considering that Peppers
and Rogers (2013) research shows that customer relationships must be based on trust. This is
also in line with Morgan and Hunt (1994) who posited that trust is one of three important
attributes for creating, developing and retaining a customer relationship. That the respondents
at the interviews did not raise confidence as an important one factor behind working with
customer relationships does not necessarily mean trust does not constitute an important factor
in their work with customer relations. The customers wants to feel they can trust the staff.
They want to feel that the staff is honest and genuine and can trust they will get help during
the purchase and after the purchase as well.
To create long-term customer relationships, the interviewed respondents mean the company
must meet the customer's needs and offer the right price and range. Part of creating a long a
customer relationship may also be that the customer may return to a specific sales person, one
kind of relationship with customers that Elgiganten calls ambassador customer. There are
benefits to the customer recognizing the staff and having a relationship to those who work at
the company. Such relationship can mean trust and that the customer feels positively
differentiated. Shopping in physical stores can also be a pleasure for consumers as it entails
social interaction. The personal contact could indicate that physical stores will survive given
that there seems to be a need and interest for physical stores there customers get a personal
contact with a seller.
The managers agreed that it is more difficult to establish relationships with their customers
over the internet. The argument put forward is that the interaction over the internet can
become impersonal, that it is difficult to offer comprehensive solutions and it is difficult to
create feelings and ties to customers over the internet compared to in a store. The importance
of customer relationships are based on a human relationship and not just on technology,
which should speak up that it can be more difficult to create customer relationships online.
The customers can get further help in the store by asking for a certain product but after
38
explaining the need or problem it could suitable with a different solution recommended by
the sales person.
It is especially important to understand the desires of the consumers since these have an
influence on the motivations towards the retailer and thus the ultimate customer experience.
Puccinelli et al. (2009) refer to this as the goals the customer has in mind and desires to
achieve, which influence the whole shopping process. Therefore, experience points should be
created in such a way that they appeal to the consumers’ inner desires which in return will
increase the relevance of the retailer in the customer’s mind and strengthen loyalty.
The price picture is not as important to the customer once the customer relationship has
arisen. Consumers tend to be more price sensitive when shopping online than when buying in
physical stores. The higher price sensitivity of online purchases could be due to that there is
not as strong a relationship with the selling company when buying over the internet as when
buying in stores.
5.3 Customer Relationship Management
The respondents from a retail perspective described that their CRM system is close
connections to the company's customer database. The customer database records customer
data consisting of mail, purchase transactions and other customer information. The purchase
transactions is appreciated by the customers, since they also get a digital receipt copy.
Customers are registered when they become members of the company’s customer club.
Based on the customer database the company can send targeted offers to specific customers.
The managers states that the company’s CRM system has close links to the their customer
club. From what has been said during the interviews the consumers seem to not appreciate
newsletter and offerings by email, as they believe it has not benefited them by email.
However, the customers seem to appreciate the special prices that only concerns members
when they are physically in the store.
5.4 Customer Experience
A good customer experience is about understanding the customer and solve their challenges.
The consumers demand smooth purchases and helpful staff in order to easily ask for help
39
instead of search information on their own and be impatient. Smooth purchases also includes
services regarding the purchased product. Consumers do request services at different levels
and the ability to get help is important.
Since this research focused on offline shopping, some motives that make consumers visit
physical stores were identified. In particular, they are driven by the possibility to receive
personal service and advice when needed. Furthermore, the option to touch, feel and try on
the product in store is a factor that enhances the feeling of control and security throughout the
purchasing process. As mentioned in the collected data, the products within consumer
electronics often needs to be experienced in a physical way. Consumers visits the store for its
product range and a part of the in-store experience is to interact about the products with
someone else and exchange opinions and thoughts. The sales people need to be educated
within new products and keep in mind that the products should be displayed in neat manner
for customers to have a maximum experience.
Apart from this, in today’s fast changing environment consumers are faced with time pressure
and various decisions on a daily basis (Hall & Towers, 2017). In this regard, there is a
motivation to visit an offline store because there can be an urge to make a decision and buy a
product right away to have the feeling of immediate possession. According to Puccinelli et al.
(2009) motivations impact the decisions and behaviour during the purchase. It is argued that
consumers mainly shop for recreational reasons. From this research it became clear that
expectations are directed towards the in-store staff who are at best friendly, competent and
authentic but also discreet. Moreover, in-store technology is expected to work flawlessly and
the staff should be able to use it to increase convenience. The in-store design is expected to
be spacious, tidy and well-structured to convey an enjoyable environment, in fact store design
was named as one of the important elements of in-store experience in existing literature
(Grewal, Levy & Kumar, 2009). This relates to the findings which emphasize the importance
of a consistent store concept, comprising a clear structure, a sensory and experiential
character as well as a modern design.
40
Even though Bäckström and Johansson (2017) point out the challenge of fulfilling the rising
demands of new customers, which are of rational as well as of emotional nature, the
dominance of emotional aspects when shopping offline was identified.
5.5 Customer Satisfaction
Yoo, Huang and Kwon (2015) state that a higher level of customer satisfaction leads to
greater customer loyalty. Therefore, the use and analysis of “Happy or Not” is an important
factor for the company since a highly satisfied customer is also likely to continue shopping
for an extended time (Yoo, Huang & Kwon, 2015). The company cares about their customers
and handle their reviews seriously. They analyze each day’s proceedings to see what they can
find to improve. Customers can read other customers reviews on their website regarding that
specific product.
Consumers share their opinions with other consumers, whether it is a good or bad review.
The customers that are interested in the products often discuss on a deeper level. In order to
feel customer satisfaction it is important for the customer that the stores have products in
stock. Customer expects to be able to make a purchase when they visit the store, and if the
needed products is out of stock it will lead to a dissatisfaction. Consumers do not have the
patience and want to buy the products immediately. The retailer can turn a dissatisfaction to
satisfaction by recommend a similar product they have in stock that fulfills the customers’
needs in the same way. Since the customer satisfaction also depends on service, also the
post-purchase part is essential. If a product breaks or a delivery goes wrong, the opportunity
to return the item or compensation will satisfy the customers.
41
6. CONCLUSIONS ——————————————————————————————————————————
This chapter includes conclusions of the thesis and answers the study’s research questions.
Theoretical and practical contributions will also be discussed and finally, limitations and suggestions
for future research are presented.
6.1 Conclusions
The increased competition between e-commerce and physical stores is starting to become
increasingly evident (Mosquera, Olarte-Pascual & Ayensa, 2018). Retailers are facing major
challenges and have to respond to the consumers’ high demands. Even though customer
experience has gained relevance throughout the last twenty years it is now even more
important for the retailers to differentiate themselves from online stores. (Lemon & Verhoef,
2016). The purpose of this study was to describe how physical companies in the electronics
industry work with customer relationships to meet the increased competition from
e-commerce. To fulfill the purpose was to formulate the research question how Elgiganten
AB work with customer relations and how in-store customer experience be used to create
customer satisfaction and attract consumers to shop consumer electronics in physical retail
stores.
In search of an answer to this research question, two sub questions was considered. The first
aimed to gain in-depth knowledge of the relevant aspects that need to be taken into account
when creating a customer experience. Existing literature was examined and in relation to the
theoretical framework (see section 2.6) important factors were put into context. One
conclusion that has been drawn is that the company have several different working methods
for creating customer relationships and their working methods are changing as a result of the
growing e-commerce. The first research question was answered by analyzing the managers’
strategies for creating customer experience with what the consumers actually believes is a
good experience. The company work with strategies in order to make customers visit them
and have an in-store experience. Consumers visit the store because of a need och because of
the interest in the products. Creating in-store experience means that the retailer need an
attractive store in form of a nice and clean store standard, stocked shelves and uncomplicated
42
working approaches. When being in search of inspiration, a structured store to be more
appealing than a chaotic and overstimulating store. The physical stores offer different types
of service that customers do not can take advantage of when buying through e-commerce.
This ability to provide service is an important part from the customer perspective. It can be
about the personal service and social interaction. In addition, the sales people at the store can
help customers and give advice and recommendations based on customer analysis and
customer's specific needs. This view is also supported by previous research.
Another important element in the companies' work with customer relationships is their work
with customer relationship management (CRM). The company uses CRM systems where
customer information is stored and companies can get a better picture by the individual
customers. Consumer appreciate the benefits from the loyalty program when they physically
are in the store, beyond that the company seems to need a strategy for making the customer
read the news letters.
The fact that customer relationships are strengthened by the physical presence is another
conclusion that has been drawn. Many customers feel that it is important to be able to
physically experience a product before it is purchased at the same time as the customer can
talk to a sales person directly in the store and get the help that is needed. It is also important
that the staff is competent and can offer the right product to each customer. That's why the
company works with the training of its staff so that each employee can have a specific one
area in which they are knowledgeable. One advantage of trained staff is the risk to customers
leaving the store with the wrong product in hand is minimized. Having knowledgeable staff
strengths the understanding of what a customer needs and also makes it possible to find
complete solutions for the customer.
The second research question was answered by analyzing the managers’ strategies with what
the consumers actually believes is important in order feel satisfaction. The managers believe
that customer will re-purchase if they are able to create customer satisfaction depending on
service quality and customers who are satisfied with the services they have experienced. The
consumers feel satisfied when they receive help from salespeople who is committed and cares
about the customer. Therefore, it is important that the customer perception of a certain
43
shopping experience exceeds the expectations of it and moreover, companies should focus to
delight customers by offering more than the expected performance of a specific product or
service that could surprise customers in a positive way. This often results in longer
relationships to customers is created, as customers can experience a sense of security and
confidence to return to get solutions to problems or have their needs met. Physical stores have
realized that just that the competence they have many times in the form of trained staff is
valuable and distinguishes them from e-commerce.
By collecting primary empirical material through in-depth interviews, consumers’ shopping
experiences were identified. Interestingly, desires which influence consumers motivations
and expectations were also identified. The most important aspect is the customer, they need
to be in focus and they also want to feel that they are in focus. It is also important to do a
customer analysis to determine the needs of the customer and if it is possible to offer the
customer any suitable total solution. The customer feels trust and will be able to build an
relationship, which seems to be an value-adding factor for them. This insight among the store
goes in line with the research done emphasized on the value of creating added value for the
customer. Thereby, the author deduced the importance of the emotional side of physical
stores, hence, the need to create an emotional customer experience.
Through exploration of the two sub-questions, the author was able to answer the overall
research question. In summary, it can be noted that the company can work with various
factors for creating relationships between the company and customers. Finding the right
balance between doing customer analytics, build customer relationships, stimulating
customers emotions and responding to their desires, creating customer experience for added
value, will enable retailers to create a meaningful experience that will attract consumers and
thus supports the objective to remain relevant. Therefore, aligning these aspects with the
desires of the consumers, the role of physical stores can be reshaped by leveraging on the
experience character, hence, creating an entertaining and exciting experience point that
appeals to the customers.
44
6.2 Theoretical Contributions
Having collected empirical material and conducted an in-depth analysis, the author was able
to support the importance of in-store customer experience, presented in previous literature. In
more detail, the relevance of emotional experiences in physical stores is highlighted.
Uncovering consumers’ motivations and expectations towards offline shopping and in-store
experience allowed for expansion of knowledge about this generation. In particular, the urge
to buy things on the spot, getting personal service and advice, social interaction as well as the
possibility to touch, feel and try on as motives that drive consumers to physical stores.
Furthermore, illustrate the link between motivations and in-store experience, a better
understanding was given about the gap between customer perspective and retailer perspective
(Bäckström & Johansson, 2017).
The findings of this thesis contribute to previous literature by underlining the important role
of traditional aspects, such as the role of sales people, store design and atmosphere
(Bäckström & Johansson, 2017). These were found to be of importance as these aspects are
able to respond to the aforementioned desires of consumers. The focus must not be on the
mere transaction anymore but is supposed to be on the customers’ emotional experience in
order to build up and strengthen the customer-retailer relationship and increase retailer
loyalty (Smith, 2011). In conclusion, the author emphasized the imperative of rethinking the
role of physical stores and developing traditional selling points into innovative experience
points. This literature has provided wide-ranging descriptions of various aspects that
contribute to creating in-store experiences. However, more empirical investigations into what
roles such aspects have in defining consumers' in-store experiences are still needed. In
general, this study contributes to understanding how companies use customer experiences in
the physical store.
6.3 Practical Contributions
Currently, Elgiganten has high brand awareness in Sweden amongst the consumers.
However, they need to continue to build up the same relationship with new customers as with
the existing ones. In accordance with the findings, retailers should put emphasis on the
creation of the in-store environment in order to enhance the relationship between the
45
customer and the retailer and, increase the emotional involvement for the customer. The store
concept should be appealing and welcoming and designed in a way that induces excitement.
This can be triggered through the store layout and retailers have to take aspects in store into
account such as enabling customers to touch and try on the products because these do not
only generate an elevated perception of quality but can also have an influence on the final
purchasing decision.
For Elgiganten this implies the need for a clear concept. Retailers have to be aware that there
is a wish for a logical and carefully selected product assortment that needs to be presented in
an inspirational way. Moreover, this should be supported by a welcoming, modern but also
cosy store environment that allows for a more adventurous discovery of the products.
Therefore, it is suggested to offer less but with the possibility to touch and feel the products
and thus create a experience and a chance to engage emotionally.
Apart from the store environment, retailers are urged to acknowledge the new role of sales
people. For customers, the staff are not only a source of information but also a source of
inspiration. The author wanted to emphasize the importance of recruiting skilled staff that
personally fit the brand image and authentically represent it, which again underlines the
traditional aspects of great service. As qualified staff in retail is rare, tailored training that
ensures a high degree of knowledge is required to find the type of employees that become
brand ambassadors and help to create a unique experience. Taking into account the findings,
flexibility from the retailer side is required when creating an experience point.
Marketers face daily challenges regarding how companies can use customer experience
strategies in parallel with the development of society (Bäckström & Johansson, 2017). As
previous research demonstrates the importance of creating, delivering and implementing
customer experiences in physical stores, knowledge of how companies use customer
experience strategies and what the strategies look like in practice is important to understand.
Experiences are, as previously mentioned, a known phenomenon, but the understanding of
how retailers relate to customers' experiences of the store visit needs to be improved.
46
6.4 Limitations & Suggestions for Future Research
Apart from the delimitations that were discussed this research has a number of limitations.
First, this research focused on the Swedish market, the findings of the thesis was applicable
to the Swedish market only. A suggestion for future research would be to investigate other
markets by taking into account their unique characteristics. Also this research specifically
exemplified a traditional Swedish retailer, Elgiganten. Therefore, the store experience that is
created at the company can be different from other retailers.
Second, further research could make a more representative comprehensive research with
more participants. These participants could be collected from a wider geographical area, but
also from a wider demographic area. This would fill in the gap of this studies limited
representative population. Due to the increasing relevance of retailing it is also important to
examine at a deeper level the relationship between the online and offline channel in future
research.
Third, the study also provides the basis for future research as a comparative study can be
conducted. Such a study could compare how experiences are used today from both the retail
and customer perspective, different from how they are used in 5 years and what changes have
occurred in the market.
Fourth, the aspects which were identified in the literature review were chosen because these
were found to be the most relevant in regards to the research questions. The identification of
other aspects from the beginning on could have led to different findings. Therefore, future
research could be based on other aspects.
Fifth, the author did not account for the different shopping characteristics between the
interviewees. Future recommendations would be to particularly examine the differences for
instance between males and females, as well as younger and older consumers or new
generations of even younger future customers in regards to in-store experience in the future.
47
7. LIST OF REFERENCES ——————————————————————————————————————————
Agndal, H., & Axelsson, B. (2012). Professionell Marknadsföring (Uppl. 3:2). Lund:
Studentlitteratur AB.
Arnberg, J., Bergh, E., Nevander, O. & Svensson, A. (2018). Det stora detaljhandels skiftet.
HUI Research AB på uppdrag av Svensk handel.
Bryman, A., & Bell, E. (2015) Företagsekonomiska forskningsmetoder. Malmö: Liber
Buttle, F., & Maklan, S. (2019). Customer Relationship Management: Concepts and
Technologies. Routledge.
Bäckström, K. & Johansson, U. (2017). An Exploration of Consumers’ Experiences in
Physical Stores: Comparing Consumers’ and Retailers’ Perspectives in past and present time.
The International Review of Retail, Distribution and Consumer Research, 27 (3), 241-259.
doi: 10.1080/09593969.2017.1314865
Calienes, E., Carmel-Gilfilen, C., Arch, M. & Portillo, M. (2016). Inside the Mind of the
Millennial Shopper: Designing Retail Spaces for a New Generation, Journal of Interior
Design, 41(4), 47-67. https://doi.org/10.1111/joid.12085
Chuang, C., & Hu, F. (2012). A Study of the Relationship Between the Value Perception
Loyalty Intention toward an E-retailer Website. Journal of Internet Banking and Commerce,
17(1), 1-18.
David, M., & Sutton, C. (2016). Samhällsvetenskaplig metod (1st ed.). Lund:
Studentlitteratur AB.
48
Grewal, D., Levy, M. & Kumar, V. (2009). Customer Experience Management in Retailing:
An Organizing Framework. Journal of Retailing, 85(1), 1-14.
doi: 10.1016/j.jretai.2009.01.001
Gupta, S., Hanssens, D., Hardie, B., Kahn, W., Kumar, V., Lin, N., & Sriram, N.R.S. (2006).
Modeling Customer Lifetime Value. Journal of Service Research, 9(2), 139-155.
Grönroos, C. (2007). Service Management and Marketing: Customer Management in Service
Competition (uppl. 3). Chichester: John Wiley & Sons Ltd.
Haas, A. & Kenning, P. (2014). Utilitarian and Hedonic Motivators of Shoppers' Decision to
Consult with Salespeople. Journal of Retailing, 90(3).
Hagberg, J. & Jonsson, A. (2016). Handelns Digitalisering: Undran Inför Framtidens Affärer.
1. uppl. Lund: Studentlitteratur.
Heinonen, K. (2014). Multiple Perspectives On Customer Relationships. Emerald Group
Publishing Limited, 32(6), 450-456. doi: 10.1108/IJBM-06-2014-0086
Hollebeek, L.D. (2011). Exploring customer brand engagement: definition and
themes. Journal of Strategic Marketing, 19(7), 555-573.
Hu, H., & C. Jasper. (2015). The Impact of Consumer Shopping Experience on Consumer
Channel Decision. Academy of Marketing Studies Journal, 19(1), 213-224.
Jeansson, J., Nikou, S., Lundqvist, S., Marcusson, L., Sell, A., & Walden, P. (2017). SME`s
Online Channel Expansion: Value Creating Activities. Electronic markets, 27(1), 49-66.
Johansson, U. (2018). Framtidens Fysiska Butik: Digitalisering, Upplevelser och Hållbarhet.
Lund: Media-Tryck.
49
Kang, B-S., Cho, C-H. & Baek, J-D. (2007). The Effects of Service Quality on Customer
Satisfaction in Case of Dissatisfied Customers. Asian Journal on Quality, 8(1), 27-39.
Kermani, Z. (2011). The Relationship Between the ``Big Five`` Personality Traits and
Customer Satisfaction: A case study of Melli Bank Kerman, Iran. Journal of Business and
Retail Management Research, 6(1), 1-7.
Kotler, P. & Keller, K.L. (2016). Marketing management, 15., uppl., Harlow: Pearson
Lemon, K. & Verhoef, P. (2016). Understanding Customer Experience Throughout the
Customer Journey. Journal of Marketing, 80(6), 69-96. https://doi.org/10.1509/jm.15.0420
Liu, F., Lim, E., Li, H., Tan, C. & Cyr, D. (2020) Disentangling Utilitarian and Hedonic
Consumption Behavior in Online Shopping: An Expectation Disconfirmation Perspective.
Information & Management, 57(3). https://doi.org/10.1016/j.im.2019.103199.
Mossberg, L. & Sundström, M. (2011). Marknadsföringsboken (1:5 uppl.). Lund:
Studentlitteratur.
Mosquera, A., Olarte-Pascual, C. & E. Juaneda Ayensa. (2018). The Role of Technology in
An Omnichannel Physical Store: Assessing the Moderating Effect of Gender. Spanish
Journal of Marketing - ESIC, 22(1), 63-82.
Netemeyer, R. G., Maxham III, J. G., & Lichtenstein, D. R. (2010). Store Manager
Performance and Satisfaction: Effects on Store Employee Performance and Satisfaction,
Store Customer Satisfaction, and Store Customer Spending Growth. Journal Of Applied
Psychology, 95(3), 530-545. doi:10.1037/a0017630
Oliver, R.L., Measurement and Evaluation of Satisfaction Processes in Retail Settings, J.
Retail. 57, 25-48. doi:https://doi.org/10.1023/A.
50
Pansari, A. & Kumar, V. (2017). Customer Engagement: The construct, Antecedents, and
Consequences. Journal of the Academy of Marketing Science, 45(3), 294–311.
Parment, A. (2018). Marknadsföring. Lund: Studentlitteratur.
Payne, A. & Frow, P. (2005). A Strategic Framework for Customer Relationship
Management. Journal of Marketing, 69(4), 167-176.
Peppers, D., & Rogers, M. (2013). Extreme Trust: The New Competitive Advantage.
Strategy & Leadership, 41(6), 31-34. doi: 10.1108/SL-07-2013-0054
PostNord, HUI Research & Svensk Digital Handel. (2020). E-barometern Årsrapport 2019.
PostNord Sverige AB.
http://pages.postnord.com/rs/184-XFT-949/images/e-barometern-arsrapport-2019.pdf
Puccinelli, N.M., Goodstein, R.C., Grewal, D., Price, R., Raghubir, P. & Stewart, D. (2009).
Customer Experience Management in Retailing: Understanding the Buying Process. Journal
of Retailing, vol. 85(1), 15–30.
Rahman, M. (2014). Factors Affecting Customer Satisfaction in Mobile Telecommunication
Industry in Bangladesh. Business, Management and Education, 12(1), 74-93.
Rigby, D. (2011). The Future of Shopping. Harvard Business Review, 89(12), 64–75.
Rosenström, M. (2016). Tar E-handeln över? En Analys Och Prognos För Svensk
Detaljhandel. Stockholm: Handelsanställdas förbund.
https://www.handels.se/globalassets/centralt/media/pressrum/rapporter/2016/2016---tar-e-han
deln-over.pdf
Sachdeva, I., & Goel, S. (2015). Retail Store Environment and Customer Experience: a
paradigm. Journal of Fashion Marketing and Management: An International Journal, 19(3),
51
290-298.
Saarijärvi, H., Karjaluoto, H., & Kuusela, H. (2013). Customer Relationship Management:
The Evolving Role of Customer Data. Marketing Intelligence & Planning, 31(6), 584-600.
Saunders, M., Lewis, P., & (2009). Research Methods for Business Students 5th edition,
England: Pearson Education Limited.
Saunders, M., Lewis, P. & Thornhill, A. (2016). Research Methods for Business Students.
7th ed. Harlow: Pearson Education Limited.
Schmidt, H & Ohlsson, M. (2016). Butiksboken – Om Detaljhandel På Internet Och I Fysisk
Butik. (3 uppl.) Stockholm: Liber.
Solomon, M., Bamossy, G., Askegaard, S., & Hogg, M. (2013). Consumer behaviour: A
European perspective (5.th ed.). Harlow: Pearson Education.
Soltani, Z., Navimipour, N.J. (2016). Customer Relationship Management Mechanisms: A
Systematic Review of the State of the Art Literature and Recommendations for Future
Research. Computers in Human Behavior 61(1), 667-688.
Srisamran, P., & Rachtam, V. (2014). Customer-centric Knowledge Creation For Customer
Relationship Management. The Journal of Applied Business Research, 30(2), 397-408.
Triznova, M., Maťova, H., Dvoracek, J., & Sadek, S. (2015). Customer Relationship
Management Based on Employees and Corporate Culture. Procedia Economics and Finance,
26, 953-959.
Wang, Y. & Feng, H. (2012). Customer Relationship Management Capabilities:
Measurement, Antecedents and Consequences. Emerald Group Publishing Limited, 50(1),
115-129.
52
Yin, K. R. (2009). Case Study Research: Design and Methods. (4th ed.). Los Angeles: SAGE
Publications.
Yoo, S.J., Huang, W.H.D. & Kwon, S. (2015). Gender Still Matters: Employees’ Acceptance
Levels Towards E-learning in the Workplaces of South Korea. Knowledge Management and
E-learning, 7(2), 334-337.
53
Appendix A: Interview Guide for Head Managers
Part A: Background Information
1. Name:
2. Age:
3. Gender:
4. Education:
5. Position:
6. Experience:
Part B: Customer Shopping Behavior
7. What do you think are the factors affecting consumers before a purchase? Why?
8. What strategies do you think companies should work with to get consumers’ attention?
Part C: Customer Relationships
9. How do Elgiganten work with customer relationships in the physical stores? Are there
specific offers in the physical stores you offer?
10. What is the biggest challenge when working on customer relationships in order to create
customer experience?
11. What are the benefits to the customers in the loyalty program? Is there any price benefits?
Part D: Customer relationship management (CRM)
12. How do you work with CRM?
13. What is the significance of CRM for Elgiganten and how will it be develop in order to
keep existing on the market in the future?
14. Are the company working on developing their service to better reach out and provide
better service to their customers?
Part E: Customer Experience
15. What can the company offer at physical stores that e-commerce can not?
16. What do you believe is an attractive store for customers?
17. What do you believe the consumers consider is a good customer experience in a physical
store?
Part F: Customer Satisfaction
18. How do you handle customer reviews in general?
19. What do you consider to be value-adding for customers when shopping in a store?
20. How can staff have a significant factor in customer satisfaction?
Appendix B: Intervjuguide för Chefer
Del A: Bakgrundsinformation
1. Namn:
2. Ålder:
3. Kön:
4. Utbildning:
5. Position:
6. Erfarenhet:
Del B: Shoppingbeteende
7. Vilka faktorer tror du påverkar konsumenterna innan ett köp? Varför?
8. Vilka strategier tycker du att företag bör arbeta med för att få konsumenternas
uppmärksamhet?
Del C: Kundrelationer
9. Hur arbetar ni med kundrelationer i de fysiska butikerna? Finns det specifika erbjudanden i
de fysiska butikerna?
10. Vilken är den största utmaningen när ni arbetar med kundrelationer för att skapa
kundupplevelse?
11. Vilka är fördelarna för kunderna i lojalitetsprogrammet? Finns det några prisfördelar?
Del D: Kundvård (CRM)
12. Hur arbetar ni med CRM?
13. Vilken betydelse har CRM för företaget och hur kommer det att utvecklas för att behålla
befintliga kunder?
14. Hur arbetar ni med utvecklingen av era tjänster?
Del E: Kundupplevelse
15. Vad kan företaget erbjuda i fysiska butiker som e-handeln inte kan?
16. Vad tror du upplevs som en attraktiv butik för kunder?
17. Vad tror du att konsumenterna anser är en bra kundupplevelse i en fysisk butik?
Del F: Kundnöjdhet
18. Hur hanterar ni kundrecensioner i allmänhet?
19. Vad tror du att konsumenterna anser vara värdeskapande i en fysisk butik?
20. Hur kan personalen påverka kundernas kundnöjdhet?
Appendix C: Interview Guide for Consumers
Part A: Background Information
The purpose of this study is to find out more about customer experience to increase the
number of visits in a physical retail store. This interview will address your preferences
regarding different experiences during a physical visit.
1. Age:
2. Gender:
Part B: Shopping Behavior
3. How often do you visit Elgiganten?
4. Do you visit the store without having a need for a purchase?
5. Can you reflect on how you discover a need to buy something?
6. Think about your latest purchase, what did the actual buying process look like?
Part C: Customer Relationships
7. What are the factors affecting you when making a purchase in a store?
8. Can you describe how companies can create trust?
Part D: Customer Relationship Management
9. Are you a member of Elgiganten’s loyalty program? If so, how do you experience it?
10. Do you experience that you get unique and selected offers tailored just for you?
Part E: Customer Experience
11. What makes you visit Elgiganten?
12. What do you think is an attractive store?
13. What do you personally consider is a good customer experience in a physical store?
14. When was the last time you had a good customer experience?
15. What do you think made it a good customer experience?
16. How do you think this purchase has affected your customer experience?
Part F: Customer Satisfaction
17. Do you share your opinions after a purchase?
18. What do you consider to be value-adding for you when you shop in a physical store?
19. Which of the options do you appreciate most in a store and why?
- Being able to easily find and buy what you want
- Environment and experience
- Interaction with staff
20. How often do you shop online in relation to physical stores?
21. Do you see any added value in being able to shop in a physical store instead of online?
What makes you want to shop in a physical store?
22. What do you think about Elgiganten as a company?
Appendix D: Intervjuguide för Konsumenter
Del A: Bakgrundsinformation
1. Ålder:
2. Kön:
Del B: Shoppingbeteende
3. Hur ofta besöker du Elgiganten?
4. Besöker du butiken utan att behöva handla?
5. Kan du reflektera över hur du upptäcker ett behov av att köpa något?
6. Tänk på ditt senaste köp, hur såg den faktiska köp-processen ut?
Del C: Kundrelationer
7. Vilka är de faktorer som påverkar dig när du köper i en butik?
8. Kan du beskriva hur företaget kan skapa förtroende?
Del D: Kundvård (CRM)
9. Är du medlem i Elgigantens kundklubb? Om ja, hur upplever du den?
10. Anser du att du får och unika och utvalda erbjudanden anpassade just för dig?
Del E: Kundupplevelse
11. Vad får dig att besöka denna butik?
12. Vad tycker du utmärker en attraktiv butik?
13. Vad anser du personligen vara en bra kundupplevelse i en fysisk butik?
14. När upplevde du senast en bra kundupplevelse?
15. Vad anser du gjorde det till en bra kundupplevelse?
16. Hur tycker du att denna affär har påverkat din kundupplevelse?
Del F: Kundnöjdhet
17. Delar du vidare dina åsikter efter ett köp?
18. Vad anser du vara värdeskapande för dig när du handlar i en fysisk butik?
19. Vilket av alternativen uppskattar du mest i en butik och varför?
- Att enkelt kunna hitta och köpa det man vill ha
- Miljö och upplevelse
- Interaktion med personal
20. Hur ofta handlar du online i förhållande till i fysiska butiker?
21. Ser du något mervärde i att kunna handla i en fysiska butik istället för online? Vad får dig
att handla i en fysisk butik?
22. Vad tycker du om Elgiganten som företag?