Customer Satisfaction Towards Self-checkouts at Supermarkets - Report Example

?Salford Business information technology Under graduate research satisfaction towards self-checkouts at supermarkets and self-service trend in UK business: the case of Tesco, Sainsbury and ASDA Supervisor: Reviewer: ----------------------------------- By Student Name Customer satisfaction towards self-checkouts at supermarkets and self-service trend in UK business: the case of Tesco, Sainsbury and ASDA Interim report 2013 Interim report overview In this report the focus will remain on the customer satisfaction towards self-checkouts at supermarkets and self-service trend in UK business. The cases that would be discussed in this report are the cases of Tesco, Sainsbury and ASDA. In chapter one, the aims and objectives of the research topic are discussed and the research would be carried forward based on these aims and objectives. In second chapter, the literature review will be discussed followed by the methods used to conduct the research; primary and secondary methods. The next chapter would be regarding the plans for the future; what is going to be discussed to meet the expected aims and objectives. The next chapter that would be discussed in the interim report is regarding the chapters that are going to be added in the final report in detail. The last chapter will provide the full summary of the interim report regarding what has been achieved so far in the research. . Chapter One: Aims and Objectives The aims and objectives on which the entire research is based on are as follows: 1.1 Aims The major aim of this research would be to identify the customer’s satisfaction level during the self-checkouts at supermarket along with the emerging and experiencing trend of self-service in UK. This would help to evaluate the customer’s level of satisfaction at supermarkets; Tesco, Sainsbury and ASDA. The study would help to identify the impact of technology in the superstore and how does the introduction of technology affect the satisfaction level along with the behavior of customers within the superstores. 1.2 Objective The research objectives would be as follows; To identify and evaluate the key concepts in the literature review that could affect the customer’s satisfaction in the purchase of goods and services. To develop questionnaire for 90 respondents, 30 each from Tesco, Sainsbury and ASDA. Developing 15 questionnaires for managers to gain information from their perspective, 5 from each Tesco, Sainsbury and ASDA. Preparing of interview schedules for 30 respondents that frequently purchase from the retail superstores, 10 from each Tesco, Sainsbury and ASDA. Chapter Two: Literature review With the passage of time, supermarkets have implemented the concept of innovation, creativity and technology into the services offered which enables the customers to get required service on their own (Bitner, M. Amy, L. Ostrom and Matthew, L. 2002). Supermarkets such as Tesco, Sainsbury and ASDA are not just focusing on innovation; the products being offered to the customers, but are also innovating the services within the company to enhance the customer’s satisfaction (Clodfelter, 2011). 2.1 Customers’ Satisfaction Customer’s satisfaction could be said as the overall experience gained during the service (Menon and Dube, 2000). The overall experience is heavily relied upon the desires, needs and expectations that have been met or exceeded during the course of experience (Lovelock, 2001). From this, it could be said that satisfaction in a sense, means the ability of supermarkets to meet the customer’s expectation. To provide service to customer exceeding the expectation is an objective that each supermarket is trying to achieve and to do so, the retail giants in UK; Tesco, Sainsbury and ASDA, are constantly implementing strategies to gain it. Customer’s satisfaction could be defined as a judgment that is followed by consumption experience. This indicates the level of experience gained from the consumption of a good or service and the level of pleasure provided by the product to satisfy the requirement of consumer (adapted from Oliver, 1997). In other words, customer’s satisfaction is the degree to which the requirements of the individuals are met or exceed by the consumption of goods and services (CSSP, 2007). 2.2 Retail Environment The retail environment in many countries has witnessed a trend of self-service through the use of technology; automation, to enhance customer’s experience at the superstores (Jamal, 2004, Burke, 2002, Merrilees and Miller, 2001, Meuter, Ostrom, Roundtree, and Bitner, 2000). This introduction of technology; self-service and self-checkout, by the leading retailers in UK is one of the growth strategies (Anon, 2010, p.1) even the grocery retailers such as Tesco has increased the use of technology at supermarkets (Anon, 2010, Hobson, 2010). The retail environment in UK is free market economy as the government has reduced its intervention. The retail sector contributes approximately 16% to the GDP and the total worth of the retail business in UK is nearly 150 billion (Burt, Sparks, and Teller, 2010). The reason due to which the technology is constantly being inducted in the supermarkets in UK is that it is mutually beneficial for the customers and the company in terms of reduction in time, control and convenience (Anon, 2010, Lee et al, 2010, Dabholkar, Bobbitt and Lee, 2003, Fitzsimmons, 2003, Meuter, Ostrom, Roundtree, and Bitner, 2000) provides convenience to the customers by reducing the time in lines which eventually increases the customer’s satisfaction (Muller, 2008). Self service is popular among the young individuals as the young consumers are more inclined towards self-service and self-checkouts at supermarkets (Dean, 2008). The research of Anitsal and Schumann (2007) and Voss and Rieder (2005) highlighted that by employing technologies; self-checkouts and self-service, are influencing the customers to work themselves in which the retailers are in more benefit than the customers. The research of Meuter, Ostrom, Roundtree, and Bitner (2000) was regarding the satisfaction level of customers with the self-service as it helps the customers to get what they want and benefit from the ease of use, convenience, time and money, and can be used according to the need of the customers and on the other hand, customers are dissatisfied with the poor design of these processes (Meuter, Ostrom, Roundtree, and Bitner, 2000). The poor design highlights the problems associated with the self-checkout such as handling the price discrepancies, purchase of alcohol and the problems associated with the leaving money or/the product on the counter (Turner and Borch, 2012). 2.3 Elements of Customers’ Satisfaction The customer’s satisfaction part consists of the behavior and perception of the customers that leads to the purchase, because they are inclined towards having return on their costs after purchase. The customer’s satisfaction is directly related with the selling due to which the retailers should improve the customer’s satisfaction at the retail stores (Jacka and Keller, 2009). It has been constantly observed that the customer’s satisfaction is the factor that all the retailers are trying to achieve in order to have competitive edge over others in the market. The customers are more inclined to visit supermarkets where they are satisfied and behaviorally response which ultimately results in the increase in customer’s pool in the market (Bennett and Rundle-Thiele, 2004). In recent years, focus was kept on customer’s satisfaction but unfortunately it was observed that customer’s satisfaction instead of increasing, somehow reduced which can be quite dangerous as the consumer market would be left without loyalty, it is important for the managers to induct strategies to improve the satisfaction of customers (Agaei, Mirzaee, Djadidi, Hassanpour, and Salehi, 2012). 2.3.1 Behavior Another element of customer’s satisfaction that plays a crucial role is the customer’s behavior. Customer’s behavior encourages the customer to patronize a particular retail store as primary store to purchase the goods and services from, rather than other supermarkets in the country. The behavioral factor influences the customers to purchase goods and services from the retail store that attracts the customers in the marketplace and eventually increase the customers in the market (Bennett and Rundle-Thiele, 2004). 2.3.2 Quality and Convenience Customer’s satisfaction is very crucial in the survival of superstores which leads to competitive advantage in the marketplace (Du Vazqueza, Rodriguez, Diaz, and Ruizc, 2003; Malan 2003; Nielson 2002) based on quality to increase the customer’s satisfaction of discriminating consumers (Ackermann 2002; Howardell 2003). One of the features in the customer satisfaction implies to the introduction of technology which would help the superstore to increase the consumers in the customer’s satisfaction rating scale. Due to this introduction of technology in the supermarkets; ATM facility, can help the customers with convenience in terms of paying their bills and comfortable in a sense that the customers would not have to bring in paper money with them for the purchase of products (Srinivasan, Anderson, and Ponnavolub, 2002; Semeijn, van Riel, van Birgelen, and Streukens, 2005). Generally the concept of customer satisfaction revolves around the concept of quality. This quality concept helps the customers to earn value from the purchase of products from the super market which ultimately affects the satisfaction level of customers due to the quality and experience gained from the purchase. 2.3.3 Infrastructure and Design According to Spears and Gregoire (2003), the elements of customer’s satisfaction are included in all aspects of operational, physical or human resource that affects the satisfaction of the customers and the customer’s perception regarding the supermarket. The infrastructure of the supermarket and the design can also influence the customers as both these factors provides the supermarket with an opportunity to attract customers based on differentiation (Levy and Weitz, 2002). 2.3.4 Commitment According to Eriksson and Nilsson (2007), the experience that the customers gain from the self-service and self-checkout would increase the customer’s satisfaction level which would ultimately lead to the commitment and loyalty of the customers (Cho and Fiorito, 2010). Based on Eriksson and Nilsson’s findings, it was observed that introduction of technology to a greater extent increases the satisfaction of customers and have a direct relation to enhance the loyalty and commitment of customers (Cho and Fiorito, 2010). Customers are highly influenced by the number of retailers in the market but choose only one as their primary store to purchase all the goods and services (Rhee and Bell, 2002) which is based on the customer’s perception regarding the attributes that are eye-catching (Woodside and Trappey, 1992). Store attributes also act as one of the factors that could enhance the satisfaction level of customers which is further defined by Macintosh and Lockshin (1997) as “customer’s store experience”. 2.4 Self Service Trend in UK’s Retail Business Supermarkets have become well-known and popular place for self-service in the UK. With an aim to be the best and to provide the customers with the best quality and service, the retail business are now shifting towards the self-service and self-checkout at the supermarkets. For the supermarkets, customer’s satisfaction is the vital element which cannot be ignored as these supermarkets operating in UK aims to establish good relationship with the customers. Self-service technology could be defined as “advancement in technology to reduce the employee’s involvement during the purchase of goods and services by the customer” (Meuter, Ostrom, Roundtree, and Bitner, 2000). The concept of self-service technology cannot be ignored as this concept comes in different forms such as automated teller machine (ATM), grocery store checkout, telephone banking, in-store kiosks for information, online purchasing and supermarket self-checkout systems (Yang and Klassen, 2008). According to Hsieh (2005), that the recent and the emerging trend of self-service checkout basically depends on the acceptance of the customers for its success. The reasons due to which consumers are influenced by the emerging concept of self-service and self-checkout are the perceived enjoyment and consumer control (Weijters, Rangarajan, and Falk, 2005). According to Marzocchi and Zammit (2006), Liu and Zhou (2006) and Zhu, Nakata, and Sivakumar (2007) the major intention to use such technology comes from the perceived control and convenience which allows the consumers with an intention to accept and use the technology (Leung and Matanda, 2011). 2.4.1 Factors affecting the use of self service and self checkout The major factors due to which the concept of self-service and self-checkout are constantly being accepted by the consumers are the speed, convenience, quicker, more efficient and the process are smooth. Due to such factors, consumers are more inclined and influenced to use such services (Dabholkar, 1996). Some of the reasons given by managers for the acceptance of self-checkout system are: “providing the customers with a chance to do their own transaction at the self-checkout”, and “customers are more interested in serving themselves rather than being served by someone else” (Dabholkar, 1996). Since the self-checkout and self-service are considered as new gadgets by the customers and kids are more interested in using the new gadgets, due to which the novelty dimension is another factor that affects the intention to use such services. According to Mitcheel and Harris (2005), technology is not always accepted by the customers as “customers are usually afraid of technology”. 2.5 Relationship between the Self Checkout and Self Service at Supermarket and Customers’ Satisfaction Prior researches indicates that the customers are motivated, satisfied and trusted the concept of self-service and self-checkouts at the retail supermarkets in the UK. The outcomes of using technology in the retail business were satisfaction, trust, adoption and intention to further use the technology in future. (Weijters, Rangarajan, and Falk, 2005; Bhattacherjee, 2001; Lee and Turban, 2001; Lin and Hsieh, 2006). According to Muller (2008), the self-service and self-checkout have reduced the time customers spent in line which directly increases the customer’s satisfaction. By introduction of technology in the supermarket, the customers perceive a unique image of the store which eventually leads to the increase in satisfaction level but it is not important that the satisfaction level would lead to loyalty (Miranda, Konya and Havrila, 2005, Bloemer and Odekerken-Schroder, 2002, Bloemer and de Ruyter, 1998, East, Harris, Lomax, Willson, and Perkins, 1997). The self-scanning checkouts are relatively gaining importance as majority of the customers are now turning to stores that are equipped with latest technology that aims to provide convenience and total control to the customers (Marx and Erasmus, 2007; Marx & Erasmus, 2006). Due to such advantages, the customers now prefer the new approach backed by technology over the traditional approach in UK. Chapter Three: Methodology The aim of this section is to provide an explanation regarding the methodology chosen and the reasons for using it. As the topic selected is based on the evaluation of the customer’s satisfaction with regards to the self-checkouts and self-service, it would be best to use both the qualitative and quantitative research method. By using both the approaches, it would help to understand the satisfaction level of customers with the induction of technology within the process (Saunders, Thornhill, & Lewis, 2009). In order to collect the data, structured questionnaires would be used along with interviews from the respondents. This would help to identify the both the macro and micro factors (Maylor & Blackman, 2005) that are associated with the induction of technology in supermarkets to enhance the concept of self-checkout and self-service. Major focus would be on the secondary sources such as libraries, articles, academic journals from reliable sources etc. In order to have clear insight regarding the topic, it would be best to consider both the primary and secondary data sources. The secondary data sources would help to eliminate any misunderstanding related to the topic selected and would help to provide a clear understanding of different perspective on customer satisfaction and the technology (Sekaran, 2006). As the qualitative method is based on the perceptive research approach it indicates that this approach focuses on the perception and the understanding of individuals to provide a clearer view of the topic (Jankowicz, 2005). This research approach will help to understand the consumer psychology and the factors that could affect the purchasing decisions of the customers. Chapter Four: Planning Activity Days November 2012 December ‘12 January ‘13 February ‘13 March ‘13 Duration (from November ’12 to March ‘13) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Understanding and studying of concept regarding the topic 7 Creation of aims and objectives 1 Creation of Research proposal 6 Submission of research proposal 3 Interim report: Aim & Objective 2 Meeting with supervisor 1 Collection of secondary data for Literature Review 28 Meeting with supervisor 1 Research Methodology 13 Meeting with supervisor 1 Finalizing the Interim Report 21 Meeting supervisor 2 Revision of the report based on Supervisor’s feedback 14 Finishing touch (printing and binding) 6 Final Submission 1 Chapter Four: Structure Layout and Chapter Summaries This chapter is regarding the structure, layout and chapter summaries that are going to be included in the final report. The final report would be much like the interim report with in-depth information regarding the topic. This part of the interim report is further divided into 5 sections which are illustrated below 4.1 Introduction This section of the interim report aims to provide extensive information regarding the customer’s satisfaction level regarding the introduction of self-service and self-checkout at superstores in UK. The customer’s satisfaction revolves around the core concepts of price, quality, flexibility, speed and technology due to which these concepts are to be explained in details as well as their relationship with the level of customer’s satisfaction. Since most of the superstores in the UK are implementing the concept of self-service and self-checkout, the aims and objectives of this research would be to understand and evaluate the customer’s satisfaction at 3 major superstores i.e. Tesco, Sainsbury and ASDA. This research would also highlight the importance and advantages of implementation of technology within these superstores and would also highlight the reasons for such implementation. The objective of this research would be to gain information from the respondents that take part in the purchase of goods and services from these superstores to evaluate their satisfaction level before and after the implementation of technology within the superstores. 4.2 Literature Review This section of the interim report aims to provide basic information regarding the different but important concepts that would be used in the report. This part would be based on the secondary data; data that is collected by some person but being used by another person, in order to establish a theoretical framework for the topic that is going to be discussed in the report; customer’s satisfaction regarding the self-service and self-checkout trend in UK. Literature review would aim to highlight the key terms such as customer’s satisfaction along with the self-service and self-checkout trends in UK in the retail superstores and would establish the theoretical framework which would support the entire research work in further parts of the research. This part would provide the necessary definitions of the key terms to eradicate and misunderstanding that could arise in later research. 4.3 Methodology This section would deal with the methods used for the collection and interpretation of data collected. The primary data would be collected through interviews and questionnaires whereas; the secondary data for this research would be collected through the use of sources such as libraries, academic journals and credible resources which include websites and web portals. To understand and evaluate the customer’s satisfaction, it is essential to use a mix of approach (i.e. quantitative and qualitative). The quantitative data would be collected through interviews from the respondents to analyze their level of satisfaction during the purchase of goods and services from Tesco, Sainsbury and ASDA. The data would also be collected through semi-structured questionnaires that would allow understanding and evaluating the concept of technology and its impact on the customer’s satisfaction. Since the qualitative data aims to understand the perception of individuals, it is essential to use this approach to identify the factors that could enhance and reduce the level of satisfaction. This approach would also help in highlighting the various external factors that could impact the buying behavior of the consumer. This portion of the research would also highlight the limitations that somehow created hurdles during the collection of data and information regarding the topic. The major limitations that were faced during the collection of data as well as the ethical consideration would also be highlighted in the final report. 4.4 Analysis That data that is collected through the use of primary and secondary sources must be analyzed. This would be done to gain insight of the topic and to evaluate the customer’s satisfaction level to conclude the topic by providing necessary recommendations. The analysis would be done on the basis of the primary data collected. Since this data is collected for the specific purpose; to identify the customer’s satisfaction regarding the self-service and self-checkout at superstores in UK, it would highlight the satisfaction level of customers as well as the factors that lead to satisfaction and dissatisfaction. The analysis would also highlight the findings and would aim to discuss the findings in the research to provide clear understanding of the research. 4.5 Conclusion The last portion of the final report would summarize the entire research and would provide necessary recommendations for the supermarkets operating in UK; Tesco, Sainsbury and ASDA, to encourage the customers to select their retail stores rather than any other in the market. This section in the final report would summarize the whole research into paragraphs so that the reader could easily understand the concepts that are included in the research and the findings of the research as well. The aim of this section in the final report would be to provide the reader with a quick glance of what is being discussed in the report. Chapter Five: Summary The interim report is entirely focused on the customer’s satisfaction regarding the self-service and self-checkout trend in UK at superstores which includes Tesco, Sainsbury and ASDA. The literature review for the interim report is written after constant reading of secondary researches and articles to clearly understand the topic. The literature review at this point consists of 2000 words which at this moment is sufficient but will be expanded in the final report. To collect the data from the respondents that are frequent shoppers at the retail stores, questionnaires are designed to collect the information from each retail store mentioned above as well as from the managers of the supermarkets. Interviews would also be conducted from the respondents in order to gain clear understanding of the level of customer’s satisfaction which would ultimately help in the finalization of the research. Due to lack of time and resources, the number of retail stores and the respondents are kept limited. Only 90 respondents would be provided with the questionnaires to evaluate the customer’s satisfaction level. 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