Are Tesco customers exhibiting a more social type of loyalty towards Tesco and Tesco Clubcard? A critical analysis of the nature and type of Tesco customer loyalty to Tesco in Dundee.
Turner, Jason James
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The aims of the thesis are two-fold. The first aim is to evaluate the antecedents which influence loyalty to Tesco and Tesco Clubcard, contending that customer loyalty is influenced by factors of both a social and marketing nature. The second aim is to assess the nature and type of loyalty exhibited by Tesco customers towards Tesco and Tesco Clubcard. These two aims derive from the research question ‘What are the antecedents of loyalty exhibited by Tesco customers towards Tesco and Tesco Clubcard?’ and are integrated in the research hypotheses to be addressed in the research: H1 satisfaction, trust, commitment, emotional attachment and passion are influential in a customer’s loyalty towards Tesco and Tesco Clubcard, was supported; H2 older females are the demographic group most likely to be loyal to Tesco and Tesco Clubcard, was supported; H3 Tesco customers exhibit ‘incentivised’ loyalty towards Tesco Clubcard, was not supported. The context to this research is that loyalty to grocery retailers is argued to be based on satisfaction, trust and commitment, with loyalty programmes playing an ‘incentivising’ role in customer loyalty. Using 600 questionnaires conducted at 2 Tesco formats, Tesco Extra and Dundee Riverside Extra in Dundee, Scotland with Tesco customers and 20 interviews at the homes of female Tesco customers aged 51 and over, the research drew a number of conclusions. The first conclusion from the research is that there are significant positive relationships between all the tested antecedents (satisfaction, trust, commitment, recommendation, emotional attachment and passion) and loyalty, indicating a level of respondent loyalty which has a ‘social’ dimension to it. However, customer loyalty towards Tesco and Tesco Clubcard is not particularly ‘social’ in nature, it was premised on the antecedents of happiness/satisfaction, trust and to a lesser extent commitment with grocery shopping viewed as a practical activity and different from a social relationship. The second conclusion was that Tesco customers were spuriously loyal to Tesco and Tesco Clubcard, loyal because of convenience and to a lesser extent incentives. By convenience the research revealed Tesco’s ability to create an environment which encouraged customers to rely on their convenient store location and accessible opening hours, operating a near monopoly with its 8 stores across all retail formats in convenient locations in Dundee and Broughty Ferry and the ease in which customers can use Tesco Clubcard and the lack of effort required to access offers. The third conclusion was that Tesco customers were more loyal to Tesco than Tesco Clubcard with the majority of interviewees referring to Tesco and Tesco Clubcard being ‘one entity’. This underlines the perceived limited capacity of Tesco Clubcard to increase frequency to or spend in store and the importance of the peculiarities of Tesco as a grocery retailer in Dundee. By peculiarities this research referred to Tesco’s retail dominance in Dundee in terms of market share, number and location of stores, the staff employed, it’s varied online and offline ‘grocery package’ and its use of the media to remind customers that they are attempting to build a relationship, almost social in nature with their customers, a fact acknowledged by a number of interviewees. The fourth conclusion was that females, particularly those aged 51 and over were the most loyal to Tesco and Tesco Clubcard, argued to be because it was in their nature to invest time and effort into maintaining relationships and friendships which translated into their shopping behaviour. The final conclusion was in terms of the characteristics of a Tesco customer most likely to be loyal, someone who always used Tesco, driving past other grocery retailers to patronise a Tesco store, would recommend Tesco to others, had a family member employed or previously employed by Tesco, owned and always used their Tesco Clubcard, preferred Tesco as a grocery retailer and would not switch their current loyalty from Tesco, frequented the store 1-3 times a week and were aged between 58 and 63. These conclusions contribute to existing research in the areas of customer loyalty and loyalty programmes in three parts. First, this study consolidates and takes research forward in the areas of loyalty programmes, customer loyalty and the role of age and gender in customer loyalty. Second, the research identifies the peculiarities of Tesco in Dundee and the capacity of these peculiarities to engender convenient loyalty among customers. Finally, as one of only a handful of studies on Tesco and Tesco Clubcard the results should prove useful to academics and practitioners alike given the high levels of interest into why Tesco and Tesco Clubcard are so successful in the UK grocery retail sector.