What makes customers loyal to different supermarkets?

17 DECEMBER 2013

A research group led a CSU marketing expert has delved into what makes customers loyal to different supermarkets, which could be important in the lead-up to the peak retail Christmas sales season.

A research group led a Charles Sturt University (CSU) marketing expert has delved into what makes customers loyal to different supermarkets, which could be important in the lead-up to the peak retail Christmas sales season.
 
Dr Abhishek Dwivedi, with CSU's School of Marketing and Management, found that supermarket customers are attracted to different supermarket chains by three major factors, including value for money, brand and relationships with the local community.
 
"Our group found a number of features important for decision makers in these companies. Importantly, consumers can't see any significant differences between Coles and Woolworths, which means these firms need to change consumers' perception of them," Dr Dwivedi said.
 
"What was a duopoly, with Woolworths and Coles dominating the Australian supermarket scene, has changed in recent years as new players such as IGA and Aldi have entered the market.
 
"Both newcomers have performed well recently and, as a result, Woolworths and Coles may need to re-assess strategies."
 
The research group found that generally consumers' intentions for loyalty to one company was most influenced by the perceived value-for-money that they received from the company, followed by their relationship with the company and the company's brand.
 
"Getting value for their dollar was the main driver for the loyalty of customers, particularly by making shopping more convenient. This was achieved best by Woolworths, who had nearly half of the market at the time of the survey," Dr Dwivedi said.
 
 "This underscores the importance of delivering value by supermarkets. However, the other two facets should not be ignored. The trick in the supermarket industry is to deliver on all three facets but with an emphasis on value.
 
 "Consumers are also looking for stronger relationships with their local supermarket, which was achieved best by IGA and serve as a buffer against competitive actions from other firms. We recommend that this could be improved by further training of front-line staff in customer service skills.
 
"Age and education also played a part – younger respondents were more attracted to Woolworths while less educated people were attracted to the Coles brand," he said.

The research analysed a nation-wide survey which receive nearly 900 responses from 20 000 emailed forms. The team recognised that the survey respondents represented a reasonable cross-section of supermarket customers across Australia.

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