Comparing online retail loyalty segments of Indian Gen Z buyers

Abstract

PurposeGeneration Z (Gen Z) is particularly influenced by digital technologies as this cohort is found to have grown up with technology forming the pivot of most of their routine activities. Owing to the huge potential of this market, online retailers are keen to build and sustain their loyalty. Shopper’s loyalty varies across age, gender, income, service quality perceptions, etc. of customers. This study aims to show that it is necessary to identify distinct consumer segments of these shoppers which can enable online retailers to fine tune their marketing programs and increase program effectiveness.Design/methodology/approachUsing a sample of 700 students pursuing Masters in Business Administration (553 usable responses) from two state universities in North India, data have been collected with reference to accessories, clothes, books and electronic goods. SPSS and AMOS have been used to analyse data using cluster analysis and multinomial logit (MNL) regression analysis.FindingsThe results of cluster analysis reveal that these shoppers can be clustered into three segments, namely disloyal shoppers (DS), staunch loyals (SL) and vacillating shoppers (VS) on the basis of their online retail loyalty. The odds ratio reveals that less frequent online shoppers are less likely to be VS or DS than being SL shoppers. People who experience flow while surfing online shopping websites are 3.260 times more likely to be VS than being SL. Further, service quality decreases the odds of a shopper acting as a VS in comparison to SL shopper by 0.113.Research limitations/implicationsThese findings would help marketers identify strategies that can transform the VS or the disloyal ones into loyal and profitable segments. The present study is limited to Gen Z shoppers and so results may vary for customers belonging to other age groups.Originality/valueThe study contributes to existing literature by understanding the antecedents which contribute to online retail loyalty of distinct segments of young shoppers.