final essay business research method online retail experience and customer satisfaction mediating role of last mile delivery

TON DUC THANG UNIVERSITY BUSINESS ADMINISTRATIVE INTERNATIONAL BUSINESS ADMINISTRATIVE ĐẠI HỌC TÔN ĐỨC THẮNG TON DUC THANG UNIVERSITY FINAL ESSAY BUSINESS RESEARCH METHOD ONLINE RETA

TON DUC THANG UNIVERSITY BUSINESS ADMINISTRATIVE INTERNATIONAL BUSINESS ADMINISTRATIVE

ĐẠI HỌC TÔN ĐỨC THẮNG TON DUC THANG UNIVERSITY

FINAL ESSAY BUSINESS RESEARCH METHOD

ONLINE RETAIL EXPERIENCE AND CUSTOMER SATISFACTION:

MEDIATING ROLE OF LAST MILE DELIVERY

Lecturer: Nguyen Trung Tin Group: 1

Shift: 3, Tuesday

Ho Chi Minh City, December 2022

TABLE OF CONTENTS DIGITAL RETAIL EXPERIENCE AND CUSTOMER GRATIFICATION: THE

INTERMEDIARY PART OF LAST MILE DELIVERY cành 1

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3 LITERATURE REVIEW

4 ONLINE RETAIL EXPERIENCE AND CUSTOMER SATISFACTION c se: 4

5 LAST MILE DELIVERY IN E-RETAIL EXPERIENCE 0n nnn nh iu 6

= fg [@) BO) ROC) Aen eee 8 6.1 Sampling and data collecfion 22H TT TT TT ng 221111111 tk khen 8 6.2 Measures

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8 DISCUSSION AND IMPLICATIONS L2 0111111111 nn TT ng TH Tnhh hay 13 8.1 Research implications

8.2 Managerial implications - - - + 2-22-2222 2111211111111 11 nghe ca 16

9 LIMITATIONS AND FUTURE STUDY 2n HT ng 11k tk kkh 18

REFERENCES

TEACHER’S COMMENTS

PERFORMANCE AND PARTICIPATION EVALUATION

No Student Evaluation

ID Name Assigned Tasks

(%)

- Method part

_ |- Limitations and future

1 721D0014 Triệu Thị Minh Nguyệt study part 100%

` x ,_ | - Literature view part

4 | 72100045) Hoang Nguyễn Xuân 100%

Thuong - Research implications

- Literature view part

5 721D0058| Nguyén Uyén Nhi - Managerial implications 100%

- Format

- Introduction part &

6 | 721D0051| Ngé Thanh Duyén | Abstract - PPT 100%

Digital retail experience and customer gratification: the intermediary part

of last mile delivery

1 Abstract

Recent years, the extraordinary expansion of e-commerce has been vital for different businesses around the world Enabled by the Internet retailers are able to contact more customers, extend the distribution network much further, and utilize their sources more efficiently Customer experience has developed as a font of competitive precedence in the new market environment This study looks into customers’ experience in online shopping which is affected by the function of the last mile delivery A study that was performed in Vietnam and analyzed the latest experience

of participants was used as a part of quantitative methodology The finding shows that the association between the customers’ assessment of online purchasing experience and customers’ satisfaction is mediated by the last mile delivery These assumptions are the foundation for more in-depth research of last mile delivery’s function in the e- retail context and reinforce online sellers in raising their online shoppers’ satisfaction

2 Introduction

Global e-commerce has experienced tremendous development in recent years as a consequence of the Internet's quick expansion and soaring consumption rates Worldwide e-retail revenues were $2.3 trillion in 2017 and are predicted to reach $4.9 trillion in 2021 (eMarketer, Statista, 2022), Undoubtedly, e-commerce not only redefines the practices of numerous businesses (Oinas, 2010); (Wagner, 2013); (Schramm-Klein, H., and D Morschett, 2006)but also forms the value of its information advantage differently (Baozhuang Niu, JianDong, ZhipengDai, YaoqiLiu, 2022) redefines the practices of numerous businesses (Oinas, 2010); (Wagner, 2013); (Schramm-Klein, H., and D Morschett, 2006) By 2019, almost half of China's citizens will be shopping online, and nearly 80% of US Internet users will buy online at least once (eMarketer, Statista, 2022) In both developed and developing economies within countries, a similar trend can be seen, as the entire In 2020, the number of digital consumers is forecast to surpass 2 billion (eMarketer, Statista, 2021)

When the combined market value of e-retail goliaths like Amazon and Alibaba is similar

to the GDP of Mexico or Spain, the rising market consistently generates revenue records

By creating e-services, digital media, and hardware and changing their focus to long- term relationships with their clients, the front runners go outside the realm of traditional retail To take advantage of customers’ experience and obtain a competitive edge in this market competition (Neil F Doherty, Fiona Ellis-Chadwick, 2009), e-retailers engage in the contemporary approaches and enhanced technology in accordance with customer

demands (Mosa, 2022) E-retailers are turning to logistics to provide personalized services, point to the end customer is generally seen as a significant criterion for online consumers (Heleen Buldeo Rai, Sara Verlinde, Cathy Macharis, 2018); (Terry L Esper, Thomas D Jensen, Fernanda L Turnipseed, Scot Burton, 2011); (Murfield, M., C A Boone, P Rutner, and R Glyn Thomas, 2017) Last-mile delivery options that customers like include free delivery, same-day delivery, deliveries at certain times, in-store pickup, shipment tracking, and free return shipping According to PwC's Global Consumer Insight Survey (PwC, 2018), online buyers place high importance on quick and flexible delivery Consequently, last-mile delivery is to be quite important to online customers

Recent e-commerce and retail research have established a strong customer experience agenda (Pandey, S., and D Chawla., 2018) in order to properly address the rising and internet shoppers’ expectations are rapidly altering The achievement of a profound knowledge of the client experience has made the topic become a complicated and multifaceted endeavor Recent research have revealed a multistage perspective for comprehending consumer decision-making and the shopping experience is suggested comprehending (Lemon, K N., and P C Verhoef., 2016)present a model which combines the pre-buy, purchase, and post-purchase stages which constitute the customer journey spanning a continuous cycle of previous, current, and future client interactions

In the effort to comprehend and improve client experiences across many industries, such

a model is quite relevant However, e-retail studies mostly concentrate on the online experience of customers, while other stages have not gotten fair attention in research Once the key functions and touchpoints are determined, the multistage approach appears

to be a strong fit for the online retail customer experience For instance, drawing parallels

to the bricks-and-mortar retail model, one can claim that the consumer's experience with online shopping is incomplete until they have the desired item in their possession Following this argument, it is proposed that one of the many core components of the e- retail experience is the last-mile delivery experience While the delivery and return processes are essential in determining the customer's e-retail experience, e-retailers still view these activities more as needs than as potential sources of customers’ satisfaction

and loyalty Evidently, the results of the delivery and return services will have an impact

on the consumer's relationship with particular online shops (Marshall Fisher, Santiago Gallino, Jiagi Xu, 2016) However, many e-retailers have a shortage of value chains by adding non-optimal options

By examining the effects of last-mile delivery on customer satisfaction, this research employs a more comprehensive perspective on the customer's e-retail journey More specifically, the role of last-mile delivery as a go-between for customers’ online experiences and their general happiness with the e-retail experience The scientific data gives retailer managers a different angle on the online customer experience and a means

of generating customer value, both of which promote customer happiness and trust This

work adds something modest but original and significant to the amount of knowledge already available The proposed model establishes the foundation for future retail to adopt the customer journey concept and enhances the integration with customer orientation approach, which is gaining attention, but still has room for improvement (Mariola Palazén, Manuela Lépez, Maria Sicilia, Inés Lopez, 2022)

3 Literature review

In modern marketing, envisioning a brand is viewed as an experience for the customer Over the past few decades, user experience has been the subject of extensive studies ove the last few decades (Kranzbuhler, A M., M H P Kleijnen, R E Morgan, and M Teerling, 2018) And the concept of customer experience was originally introduced by (Holbrook, M B., and E C Hirschman, 1982) who argued that only a fraction of customer behavior is determined by the value and pricing perceptions of consumers Instead, a concept gai ned depth with a holistic view of customer experience was introduced, which included hedonic, symbolic, physical, social, economic, environmental, and aesthetic factors It endorsed a multistage aspect that featured the connection between past, present, and future customer experiences (Verhoef, 2009) It has recently been discovered that future customer experience is a consequence of customer-firm engagement and is in some ways influenced by the customer's consciousness of a firm's customer experience management output As a result, it is somewhat impacted by how people evaluate the outcomes of their companies’ customer experience management efforts The customer experience, according to (Christopher Meyer, Andre Schwager, 2007), is a reflection of the subjective reaction that customers exhibit in both their passive and active interactions with the business Since the perception of experience results between the business and the consumer might differ greatly (James Allen, Frederick F Reichheld, Barney Hamilton and Rob Markey, 2005) (Kranzbuhler, A M., M H P Kleijnen, R E Morgan, and M Teerling, 2018), this dyadic perspective on user experience production is conceptually essential More specifically, the characteristics of a consumer's individual experience are associated with the values, impressions, and emotions that vary from one customer to some other, as well

as from one business within a particular service industry, to another (Awad, 2022)

Traditionally, a business's understanding of the consumer experience is turned into a set

of methods for ensuring customer pleasure with the goal of fostering consumer trust and increasing profitability for the business (Frow, P., and A Payne, 2007) The desire to seek information and the intention to make future online purchases were both positively

impacted by a satisfactory and enjoyable experience while making an online purchase transaction (Shareef et al., 2019) This viewpoint is typically based on the blueprint approach, as recommended by earlier studies (Mary Jo Bitner, Amy L Ostrom, and Felicia N Morgan, 2008) But in the setting of escalating industry competition, customer experience has been broadly acknowledged as the source of competitive advantage and long-lasting customer loyalty (Pine, B J., and J H Gilmore, 2011); Verhoef et al 2009); (Mascarenhas, O A., R © Leventhal, R Kesavan, and M Bernacchi, 2006)An increase

in experience-centric concepts and companies can be attributed to this change in values According to this new viewpoint, businesses should create and promote their products and services as a series of transactions (Verhoef, P C., G Antonides, and A N de Hoog,., 2004); (Patricio, L., R P Fisk, J FalcAo E Cunha, and L Constantine, 2011) In this view, a customer's experience is a series of reactions to a series of contact points that make up the customer journey and begin a long time before the customer makes a purchase or interacts with the company (Lemon, K N., and P C Verhoef., 2016).A shop

or service provider may find it difficult to identify all of the touchpoints, which can result

in insufficient customer journey maps, a disjointed awareness of the customer's perspective, and a lack of influence over customer management stages

A survey found that only 8% of customers agreed with the assumption made by 80% of businesses that they offered superior experiences (James Allen, Frederick F Reichheld, Barney Hamilton and Rob Markey, 2005) This gap has been narrowing in recent years

as businesses began to see customer experience management as a means of enhancir customer satisfaction and gradually made the switch to a "get out and look" strategy for accomplishing this goal Additionally, no trustworthy customer experience scales have been created, and the ones that are already in existence have not yet demonstrated their utility owing to their recent development and restricted applicability (Lemon, K N., and

P C Verhoef., 2016)

4 Online retail experience and customer satisfaction

Numerous merchants have changed their marketing plans and distribution methods as a result of the rapid development of e-commerce, which has also changed how they interact with customers and vice versa E-commerce provides access to distant markets because it is said to blur international boundaries (Suwarni et al., 2020) The customer experience evolved a fresh collection of factors as the retail context moved to an online format (Mathieson, M., and J Hoskins, 1995); (Parasuraman, A., V A Zeithaml, and

L L Berry, 1985) and (Zeithaml, V A., A Parasuraman, and A Malhotra, 2002)were the first studies to highlight important Internet retail characteristics, and they were successful in showcasing the areas where the online and offline retail environments diverged Despite numerous attempts by researchers to compile a list of the essential characteristics, no consensus has yet been reached An online store can be assessed base

on a variety of frequently used factors, such as its usability, personalization, product selection, and clarity of the information provided about it, clear pricing, the accessibility

of the desired goods, order tracking, on-time delivery, the product fulfilling expectations, customer support features, the overall appearance and style of the site, and retaining customers (Burke, 2002) (Ruby Roy Dholakia, Miao Zhao, 2010); (Jin, B., and J Y Park, 2006) that produce many sorts of customer value and serve as a benchmark for the consumer e-retail experience

In the environment of e-commerce, implementing a customer journey point of view to engineer customer experience becomes a tremendous effort (Lemon, K N., and P C Verhoef., 2016) Customer journey is closely related to customer experience, which is the internal and subjective responses customers have towards contacts with service providers (Yiqing Ding, Erin F MacDonald 2022) When customers cannot be watched throughout their interactions with a range of interactions, customer behavior becomes less transparent, making it difficult to recognize and place many touchpoints on a customer journey map Since it takes into account that customers have experiences whenever they "touch" each and every component of a product, service, image, or business across many platforms and media, the principle of touchpoint is extremely intuitive and plain, and is therefore helpful (Pantano and Viassone 2015) Consumers now communicate with businesses throughout a variety of touchpoints across different publications and networks (e.g., social network sites (SNSs), apps, websites, and physical stores), leading to more complicated journeys that are partly based on recent dramatic changes in consumer habits and purchasing behaviors (Melero, Sese, and Verhoef 2016) However, a lot of retailers use big data and in-store behavior monitoring

to keep an eye on client behaviors and create accurate customer profiles Customer behavior has changed in response to shifts in the retail environment, which has driven to modifications in customer satisfaction mechanisms (Ballantine, 2005); (Harvir S Bansal, Gordon H.G McDougall, Shane S Dikolli, Karen L Sedatole, 2004); (Szymanski, D M., and R T Hise, 2000)

The evaluation of online customer experience, as opposed to that pertaining to a retailer

or online marketplace, advances the current knowledge of the interactions between the consumer and the retailer The construction of customers’ impressions and expectations

of an online store is strongly influenced by their online experience (Pappas, | O., A G Pateli, M N Giannakos, and V Chrissikopoulos, 2014) According to multistage perspective studies, self-efficacy, perceived effort, perceived utility, and simplicity of use are strongly correlated with prior online purchasing experiences (Tong, 2010).In the future, a mix of these factors and their linkages will determine the behavior of customers (for instance, retention and favorable word of mouth) and the degree of faith they have with the retailers (Hahn, K H., and J Kim, 2009) It will be challenging for businesses

to build lasting relationships with their customers without loyalty (Setyorini & Nugraha, 2016) Safety, privacy, and dependability are aspects of trustworthiness (Harwood & Garry, 2017) The intention to repurchase a product or service will show up when consumers perceive that the goods acquired may satisfy them, which will help to improve the experience of shopping online through faithfulness and satisfaction among customers The primary aim of customer experience management is to increase customer happiness, which is connected to these and other aspects of the customer experience (Liu, X., M He, F Gao, and P Xie, 2008); (Lee, G G., and H F Lin, 2005) (Janda, S., P J Trocchia, and K P Gwinner, 2002) In accordance with the results of prior studies, we hypothesize that:

Hypothesis 1: Consumer satisfaction and online customer experience are positively correlated

5 Last mile delivery in e-retail experience

Three decades of inquiry about customer e-retail experience have produced a fragmented and rather limited knowledge regarding the link between delivery processes and the e- retail experience There has been substantial advancement in the understanding of the customer e-retail experience over the past three decades (Trevinal, A M., and T Stenger, 2014),however, there are still limitations in the knowledge regarding the delivery processes associated with the customer e-retail experience An initial investigation with reference to customer e-retail experience has proved that customer satisfaction levels can vary between the stages of online retail checkout and after delivery, so that delivery affects overall customer satisfaction (Jiang, P., and B Rosenbloom 2, 2005) Last mile delivery which comes from the last upstream shipment point to the end consumer is

periodically considered a vital decision-making benchmark for online shoppers (Esper

et al 2003; (Murfield, M., C A Boone, P Rutner, and R Glyn Thomas, 2017); Buldeo Rai, Verlinde, and Macharis 2018) Nonetheless, accessible discoveries reveal a connection between the customer's recognition of the online experience and their experience following a parcel’s conveyance Reliable delivery has been mentioned as a source of customer value in e-commerce (Keeney, 1999) The key indicator that positively plows into customer satisfaction with parcel locker services is timeliness, whereas accuracy and security are similarly the predictive coefficients, according to responsiveness and tangibility, separately (Po-Lin Lai, Hyunmi Jang, Mingjie Fang and

Ke Peng 2022) Factors such as free delivery, same day delivery, in-store pickup, on- time delivery (Gregory R Heim, Kingshuk K Sinha, 2001), price, and total delivery time (Swaminathan, J M., and S R Tayur., 2003); (Marshall Fisher, Santiago Gallino, Jiaqi Xu, 2016) have been accepted as precedents to customer satisfaction and fealty to

an e-retailer In 2017, according to Amresh Kumar and Bhawna Anjaly, their study determined that the extent for measuring OPPCE (online post-purchase customer experience) is multi-dimensional It consists of six dimensions which are conveyance, product-in-hand, return and exchange, customer support, assets and feel-good elements The accurate focus on the items of these measurements can help e-retailers advance customer experience and escalate repeat purchase From the customer experience viewpoint, cognitive discord over conveyance impacts customers's awareness of the online shopping experience (Liao, T H., and C J Keng, 2013)

As consumers tend to appreciate an e-commerce experience from a holistic aspect that

is out of obviously distinguishing which of the participating market factors is responsible for which mechanism (Tax, S S., D McCutcheon, and | F Wilkinson., 2013)it could

be concluded that a negative delivery result will make a breakthrough in overall customer satisfaction and in the future consumer relationship with a given e-retailer Consider the pattern in which a client purchases an item online but, in spite of an immaculate online shopping experience, the conveyance experience clears out the customer dissatisfied (for example, the parcel contains the off-base item or the parcel is taken to a very troublesome pickup location) Due to this, customers may switch to different e-retailers in an endeavor to avert future service failures and disappointments On the point of the e- retailer is the factor which firms the delivery options for the consumer to choose from,

it is expected that a well-designed online purchase experience takes into account consumer conveyance requirements and can hence have a positive effect on the last mile

delivery process Following these beliefs, and in line with previous research, we hypothesize that:

Hypothesis 2: The last mile delivery experience provides a mediating relationship between the online experience and customer satisfaction

6 Methodology

6.1 Sampling and data collection

This study uses quantitative research methods Self-administered online questionnaires were used as an approach in this survey with the help of Google Form The questions used to ask the participants were invented based on former papers that was merticulously collected and calculated by the group of authors Participants in the survey were randomly selected from many e-commerce pickup spots in Ho Chi Minh City, Vietnam

Ho Chi Minh City was selected as an appropriate location for this study because it has

567 e-commerce sites, over 20.680 websites and 134 apps that provide commercial services (Hang, 2021) The participants were given the chance to answer questions on their most recent e-retail experience after already being briefed upon this study's objectives, confidentiality, and voluntary nature of their participation The Shopee vouchers, worth 10.000 VND, were given to each participant after they completed the survey The survey was given to the participants in their home tongue of Vietnamese The information for the study includes 170 valid respondent responses, which includes

69 percent of females and 31 percent of male with an average life expectancy of 18 - 25 years The demographic sample is shown in Table 1

Table 1 Sample Demographics

Categories Frequency Percentage

in the sample Gender

Male 70 33.9

Female 136 66.1

Age (years)

to “strongly agree” Besides, there are control factors added in order to give detail about the demographic profile of the figure and provide further understanding of the e-

commerce experience (for instance, the root and type of product bought, the purchasing time, the interaction and relation between consumers and online buyers, and the pickup procedure)

The test of reliability through these aforementioned controls which gives impressive outcomes in the degrees of internal consistency Cronbach’s alpha for online-purchasing experience, perceived last mile delivery, and overall customer satisfaction was 0.935, 0.924 and 0,847 respectively

7 Results

Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to evaluate the structures An examination of the factor loading reveals that some of the subjects that were previously included to reflect the before-during-after experience did not match the convergent validity requirements and were thus eliminated from the study (see Table 2)

We have a conviction that it is related to the multifaceted expertise and that the components are collecting a greater range of consumer expertise than is reflected in the model terms of consumer expertise Certain patterns may be seen even if we don't make judgments based on the factor loadings

Table 2 Measures

Factor a CR AVE loading

Shopping online experience 0.935 0.938 0.606

1.1 It’s easy to find any product on 0.757

the Website

1.2 | received the necessary 0.741

Purchase Confirmation

1.3 It’s easy to do the steps 0.815

1.4 A clear return policy 0.704

1.5 A seller provides many choice 0.802

of products

1.6 | feel safe when buying online 0.716

products

1.7 All the important information

was provided to me when shoppin:

online

1.8 Online experience tailored to

Consumers’ commitments and

assumptions

1.9 | feel enjoyable when shoppin

online

1.108 The online seller is reliable

1.11 | controlled the process

1.12 | enjoy buying online products

Customer experience in last-mile delivery

2.18 | received exactly what |

ordered

2.2 On-time order delivery

2.3 All the necessary information

about my order was supplied

2.4 A suitable type of delivery was

3.3 | want to recommend the

delivery unit to other people

0.782 0.765 0.829

0.805 0.832

0.748 0.829 0.806 0.770

0.805 0.850 0.813 0.846

0.824 0.807 0.782

3.4 [I'll keep using this delivery service 0.860

These subjects were evaluated on a 7-point Likert scales (1 = strongly disagree; 7 = strong

CR = composite reliability, AVE = Average Variance Extracted

4item deleted during the purifying process of measures

Table 2: Measurement

The validity loadings for online seller (1.10) seemed less than 0.7, consequently indicating their low importance in terms of the satisfaction and experience of the buyer The bulk of the measures that were kept in the final models related to how satisfied customers were with their experiences - blissfulness (2.11) and being in grasp (2.10) of the last mile delivery expertise, and comfortable sense (1.9), grasp (1.11) and safeness (1.6)

We performed a mediation study in accordance with Hayes’ recommendations (Hayes, 2013) to determine if the expertise of a last mile delivery assistance mediates the impact that online expertise has on consumer contentment Respondents without gender and age information were eliminated, while participants were considered outliers for the assessment measures if their z-scores were higher than an independent point of 3.00 standard deviations Finally, 170 replies were accepted for study after all outliers in the data set were gotten rid of

The last estimated model shows a strong correlation between online expertise and buyer contentment: B = 0.271, SE = 0.094, t = 2.801, p < 0.005, which is illustrated in Figure

1 This is consistent with hypothesis 1, which holds that a satisfying online expertise increases buyer satisfaction The findings also show the importance of the last-mile delivery path from online expertise: B = 0.821, SE = 0.035, t = 23.584, p < 0.005 This shows that customers report having better last-mile delivery experiences have also had better online experiences Moreover, we can also observe that the relationship between last-mile delivery and consumer satisfaction is important: B = 0.821, SE = 0.035, t = 23.584, p < 0.005 Customer satisfaction with the entire e-retail experience is directly impacted by the last mile delivery expertise is indicated