How Does Versace Online Store Influences Loyal Customer Behaviour in the UK - Research Proposal Example

Abstract:

The study will focus on how the Versace online store influences loyal customer behaviour in the UK. The aim is to identify how the online platforms impacted Versace regarding loyal customer behaviour. The fashion marketing is becoming significant in the UK and across the globe due to increasing use of the internet and social media to search for information. Also, the number of companies offering secure money transfer services is a motivation for online purchasing of fashion products. The study will focus on Versace online marketing strategies to enhance customer loyalty, and the aim is to identify how the online platforms impacted Versace regarding loyal customer behaviour. The study is exploratory and will utilise both primary and secondary data. The Versace online customers are the target population, and the sample will be obtained through simple random sampling. Questionnaires to be distributed online to the customers will be the main data collection methods, and direct interviews will also be used for direct calls to the target respondents. The data will be analysed using SPSS and the results generalized to the entire population. To succeed in online fashion marketing Versace Company must win the trust of its customers and maintain the good relationship by offering progressively excellent products and services at fair prices.

• Introduction

Fashion involves almost any activity of human lives including medicine, music, clothes, footwear, electronics, automobile, etc. The fashion industry is one of the most competitive and fastest growing markets across the globe especially due to globalisation, online marketing and the growing number of middle-class consumers with huge disposable income (Easey, 2009). Online marketing of fashion is becoming of particular significance in marketing of fashion brands among the Europe traders because it is enabling the marketers to cut down the cost of establishing physical stores to meet the ever increasing demand for apparel and clothing (Yee, & Sidek, 2008). The international fashion industry is worth two percent of the global gross domestic products (GDP) or equivalent to US$3 trillion (Jung & Kim, 2016). As of the year 2014, the fashion industry offered employment to over 57.8 million people globally. The retail value of the fashion industry in the UK is valued at approximately £26 billion and the total contribution of including indirect support such as supply chain, and employee’s wages is £46 billion (FashionUnited, 2016). This depicts a growth of 22 percent since 2009. The industry employs about 800,000 workers although this is this is a decline from 797,000 workers employed in 2009 (Creative Industries, 2015). The change in legislation and expansion of the European Union, as well as the continuing removal of trade barriers in the global market and expansion of the use of the internet, have given the marketing of fashion recognition across the globe. On a global perspective, the participants of fashion marketing encounter significant economic, social and cultural barriers which have resulted in a lack of uniformity in marketing strategies (Rath, Petrizzi & Gill, 2012). Studies have shown that the online expenditure on fashion in the UK market is growing significantly and in 2015 a total of £12.4 billion was exchanged through online platform depicting a 16% increase from 2014 (Jung & Kim, 2016). Fashion has special cultural attachment in the UK which is expressed through annual London Fashion Week shows and showed to the entire global through various media platform. It is estimated that about 35million people watch the London Fashion Week show across the UK using various media (Rath, Petrizzi & Gill, 2012). This popularisation of the fashion shows creates awareness to more online customers in the UK thus creating demand among the customers.

The fashion industry comprises of menswear, sportswear, womenswear, childrenswear, bridalwear, etc. Fashion marketing plays a significant role in influencing consumers buying decision as it attracts consumers to purchase stylish products, take advantage of the discounts offered by various companies, informs the consumers of new products that have been brought in the market, etc. (van Dijk, Laing & Minocha, 2005). It involves coming up with creative designs to provide consumers with new products continuously. Fashion industry also provides a mechanism for satisfying consumer needs for change (Easey, 2009, p.5). To achieve these goals, fashion industry must have the capability to identify and provide what consumer wants.

The online fashion industry has experienced tremendous growth in the recent past particularly due to growth on the internet and the use of the internet enabled devices such as Smartphone, iPad, PCs, tablets, etc. (Keller et al., 2014). Consumers are spending much time searching for information online, and this gives them a great experience with online fashion retailers. Consumers are looking for fresh, stylish products as well as a new shopping experience. According to Jung and Kim (2016) about 35% of the consumers obtain information on fashion from the social media and the young fashion consumers highly depends on digital platforms to obtain information, share experiences and evaluate the prices of products. Commercialization and globalisation have also impacted significantly on the consumption of online fashion brands as evidenced in the changing social, cultural and economic values (Jung & Kim, 2016). The fashion products are appealing to both male and female consumers of all ages and brand marketers are taking this opportunity to reach all consumers across the globe through online marketing platform.

Fashion marketing is an essential component in the success of fashion industry because it influences consumer behaviour. Whether the marketers use digital marketing platforms or the brick-and-mortar traditional marketing, the end goal is to appeal to most of the consumers to purchase the products and maintain a long-term relationship (Keller et al., 2014). The advantage of online marketing nationally is the low cost of marketing and reduced cost of establishing physical stores by replacing them with the virtual store where customers can view and make an effective purchasing decision (Bickle, 2010, 48). The ultimate long-term goal for the fashion marketers is to create customer loyalty to produce more profits for the organization through repeat sales. Fashion marketers focus of 80/20 rule to build customer loyalty whereby they build 80 percent of their businesses around 20 percent of their customers (Lu, Karpova & Fiore, 2011). Therefore, fashion marketers aim at identifying and satisfying the needs and wants of their customers as well as nurture their relationships with customers to promote customer loyalty.

• Rationale

The fashion market is highly competitive and rapidly growing globally especially with the elimination of trade barriers. Fashion industry continues to evolve each day new firms join the industry to share in ever growing market (Bendell & Kleanthous, N.d.). Marketers are targeting the global consumers because there no geographical boundaries in this era of globalisation. Therefore, online platforms are an essential means of marketing companies’ products, collecting customer feedbacks and building customer loyalty (Keller et al., 2014). However, considering that companies have to be very creative in production and marketing of the fashion products to satisfy the ever increasing needs and want of the consumers marketing plays a crucial role in this industry (Reed et al., 2012). Therefore, Versace requires a clear understanding of characteristics and qualities that define loyalty of customers in an online platform.

Building customer loyalty in a virtual market requires more that customer trust. Social media such as Twitter, blogs, mobile applications and Facebook are the most commonly used social platform across the globe (Bickle, 2010). Companies obtain likes by their followers and respond to their questions and comments on daily basis. Millions of customers also access companies’ information using search engines such as a Google to browse information about the company’s products before they decide whether to purchase them or not to purchase (FashionUnited, 2016). Additionally, clients are sharing their products experiences with their colleagues who are influencing consumer behaviour in the online market (Avalos, 2012). Therefore, companies like Versace should be very cautious to ensure they feed the required information to the online media, use these platforms to enhance communication with their customers and build relationships with the customers.

• Research Question

What are the individual and group qualities and characteristics that Versace needs to understand about their online consumers that determine and define the customer loyalty to the fashion brands?

4. Research Objectives

a. To contextualize the value of Versace Company in the U.K

b. To understand online customer behaviour

c. To evaluate how online media influence customers

d.To analyze the key drivers of loyal customers shopping in Versace and the recommendation.

5. Literature Review

• • To contextualize the value of Versace in the U.K

In 2013, the fashion industry approximately £3.09 billion and recorded the fasted growth of 17.7% between 2011 and 2013 (FashionUnited, 2016). The company has estimated annual revenue of £500. Therefore, Versace though not one of the largest fashion companies in the UK has a significant contribution to the country’s GDP. Also in the same 2013, the UK’s fashion industry provided employment opportunities to about 177,000 people. On the other hand, the Versace Company offers employment to about 500 workers in the UK (Creative Industries, 2015). Considering the rising issues of unemployment in the UK Versace remain a significant employer in the UK and improving the livelihood of several families by offering employment to about 0.1% in of the industry’s jobs.

The online market has registered tremendous growth in the UK since 2010 due to increasing use of the internet and internet enabled electronic devices (Grail Research, 2009). The number of people using internet enabled devices continues to grow in the UK market especially among the youths. In the contemporary world, many young people are using the online platform to search for information about fashionable products in the market, and they refer their colleagues to similar sites or products (Avalos, 2012). Furthermore, the online money transfer services are getting better and with improved security, consumers are gaining trust with the online payment services. Since the online activities are growing every day, Versace is also increasing its relevance by marking the fashion brands online.

5.2. To understand online customer behaviour

The factors influencing online consumer behaviour are both internal and external. The external factors are beyond the control of the individual consumers such as technology, culture, marketing, public policy, socio-economic and demographic factors. Internal factors depend on individual consumers such as attitude, self-image, perception, learning and motivation (Rath, Petrizzi & Gill, 2012). The influence of internal and external factors creates two categories of purchasing motives; functional and non-functional motives. The functional motives recount the consumer needs, and they include the shopping environment, price, time, convenience of shopping online and products selection (Lasalle, 2011). On the other hand, non-functional motives relate to the social value or culture such as product brand.

Online shoppers also want personal privacy and security when purchasing the products because they are aware that online shopping is riskier than the traditional face-to-face shopping (Bickle, 2010). The fears of losing personal data or the possibility of an intended person coming into contact with consumer information undermine their trust and loyalty of online shopping. Therefore, online markers should assure the online shoppers that their information is secure in order to win their trust.

5.3. To evaluate how online media influence customers

In marketing, information is very crucial to the customers because it influences their purchasing behaviour and their perception of the company or the products. Information affects the attitude of shoppers hence their loyalty to the company. Online marketing is very beneficial to the consumers who influence their experiences and their perception of the company and the products (Lasalle, 2011). Consumers have access to any information they want about the company and the products which they can obtain from the company’s websites, blogs, social media or their peers (Efthymios Constantinides, 2004). In the UK, the number of people who have access to the internet has increased significantly in the last decade hence, there are more people having access to the online marketers information. Consequently, the availability of information about companies and the products has helped customers in making a purchasing decision and has strengthened customer loyalty.

Versace provides consumers with a complete marketing experience inclusive of online virtual stores that offer shoppers great shopping experience regarding product features, product prices, shipping solutions, secure payment options and trust. Organisations that offer web experience for online consumers influence the consumer attitudes and perceptions thus driving more traffic to the online stores.

5.4. To analyze the key drivers of loyal customers shopping in Versace and the recommendations.

The online consumers are unique and influenced by various factors compared to traditional physical shoppers. The online markets must understand the factors that attract consumers to certain products and how they will make those products available to the consumers when and where they need them (van Dijk, Laing & Minocha, 2005). Also, retailers must convince the online customers to stick to the site and refer new customers to the site for it to be profitable. However, this means retailers must give their online shoppers the best shopping experience that will turn them into loyal customers (Lu, Karpova & Fiore, 2011). Versace achieves customer loyalty by implementing the four Ps (product, place, price and promotion) of the market mix.

5.4.1. Product (dependability and order fulfilment)

Apparel and Clothes consumers are looking for dependability and order fulfilment for their online shopping activities. Today there are many consumers who are looking for the right products online and markers must be aware of the specific needs of the consumers and ensure they offer the products with the capability to satisfy those specific needs (Grail Research, 2009). Versace offer a wide variety of quality fashion products displayed on the company’s websites for easier access by the consumers. It is obvious that consumers must visit the websites of the manufacturing company or other sales agencies where the company’s products are displayed. When consumer lands on the products they want they want to know the price of the products and the shipping conditions (Bendell & Kleanthous, N.d.). The products are available for all needs, seasons and classes thus satisfying a variety of customer requirements with the right products for each occasion.

5.4.2. Price (Offering Fair Price)

Price determines the customer’s choice of retailer and repeats purchase decision. The marketers should offer products at a fair price for online products compared to online prices in order to win customer loyalty. Every product has a price tag in the Versace’s virtual store which helps consumers to compare the prices with the products with the online prices and for other retailers. According to Bickle (2010), about 71% of consumers are influenced by the prices and they will prefer shopping in companies that offer better prices for quality products. The prices of its products are very competitive in the market thus, consumers are attracted to these products (Yee, & Sidek, 2008). Also, the Versace provides online shoppers with secure payment methods such as PayPal, bank transfer, Visa card, AMEX, and MasterCard. These methods are quick and secure hence, they give online consumers best shopping experience.

5.4.3. Place (customer service)

Online customers are influenced by the quality of customer services offered by the retailers. One of the factors influencing customer behaviour is the availability of the products (Yee & Sidek, 2008). The use of online platforms to market the Versace products satisfies the place component of the marketing mix because it brings products to the proximity of the consumers around the clock. Therefore, consumers have ample time to examine the product features conveniently (Easey, 2009). Also, the shipping of products to the customers is quick since the products are delivered the next day after the customer has placed an order. In case customers want these products faster they can make such request during the time of placing the order. Furthermore, products are delivered to the customers’ doorstep (Webloyaltyeditor, 2016). The safe online payment and quick delivery of orders to the customers’ doorsteps influence the customer behaviour as the marketers achieve the aspect of the place of the marketing mix.

5.4.4. Promotion

The UK consumers have great concern for customer services, and over 75% are dissatisfied with their shopping experience (Webloyatlyeditor, 2016). Also, more than 50% of the consumers depend on their personal experience when making a decision about where to do their shopping. This implies retailers have a lot to do if they have to win the customer loyalty. Therefore, Versace Company should use multiple channels to make their products on the online platform to increase customer experiences and attract more customers (Webloyaltyeditor, 2016). Also, they should focus more on customer services to enhance customer’s personal experience their clients are satisfied with the services.

6. Research Methodology

The research method is crucial in any research because it determines research design, the type of data to be collected, the population and sample to be included in the study, how the data will be analysed and interpreted and how the results will be presented (Singh, 2010). The study will seek to obtain information from the clients who use the online platform to purchase fashion products from Versace Company. This implies the research will be exploratory in nature that will seek to obtain qualitative feedback from the respondent Versace customers who have bought goods from the company online.

The research will provide an analysis of the results to provide information about how the Versace Company’s online marketing practices influence the behaviour of loyal customers. It will describe the observed behaviour without any reservations hence it is crucial for this research because it will relate the behaviour of the loyal customers to marketers practices (Singh, 2010, 178). The sample of 5% of the total population will be used in the research, and the results will be generalised to the entire population. The sample frame to use for collected data samples includes the customer records maintained by the company and payment records as an evidence of active customers obtained from various online payment service providers.

The research will utilize qualitative data both secondary and primary data. The secondary data will be obtained from the records maintained by the Versace Company and other marketing agents while secondary data will be obtained directly from the selected customers through interviews and questionnaires. The target population involves all the online consumers from the UK region.

The probability sampling technique whereby the sample will be determined using the simple random sampling technique. Probability sampling is crucial because all elements in the population have equal chances of being selected in the sample, and this allows for the results to be generalized to the entire population (Chawla & Sodhi, 2011, p. 236). Also, to use the simple random sampling the items from the population will be selected randomly without replacement. The questionnaires will be used as the research instrument to collect the required data (Appendix 1). The questionnaires will be distributed online to the selected customers in the sample to answer the questions. Also, the selected customers will be interviewed using Skype and telephone calls to obtain their personal experiences with Versace Company online marketing platforms. Finally, the results will be analyzed using SPSS.

7. Research Ethics

Ethics refers to morally accepted code of conducts. All information gathered will gather with the full consent of the clients and deceit or coercion shall be used whatsoever to gain the advantage of the respondent. All the data gathered from the clients will be used for academic purpose only. I assure the respondent that their details will not be shared with any third party or used for commercial purpose or any other purpose other than for academic purpose.