The usage of loyalty schemes in direct selling for online shopping in UK

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Table of Contents

CHAPTER 1: INTRODUCTION1

1.1 Overview of the topic1

1.2 Statement of the Problem2

1.3 Research Questions2

1.4 Significance of the Study2

CHAPTER 2: LITERATURE REVIEW3

2.1 Background of the concept of Loyalty Schemes3

2.2 The relationship between retailers and loyalty schemes4

2.3 The role of customers in loyalty schemes5

CHAPTER 3: METHODOLOGY6

3.1 Overview of the Research Methods6

3.2 Sampling Size6

3.3 Research Hypothesis7

3.4 Instruments for Data Collection7

3.5 Ethical Concerns for the Research7

REFERENCES8

CHAPTER 1: INTRODUCTION

1.1 Overview of the topic

The development of the Store loyalty cards took place during the mid-1990s. There are most of the retailers who thought of building an idea of developing strong relationship in order to increase their customer base. There are other studies that had a major focus regarding the problems experienced during the establishment of the marketing strategy in the retailing sector. The researchers known as Pressey and Mathews made an emphasis that despite the usage of loyalty cards and database marketing techniques by most of the retailers in UK, the transactions are usually short term and distinct in nature. It is a recognized fact that the retail industry is quite close to the customer, but a well developed and sophisticated loyalty schemes are not considered. In the last few years, the retail industry has grown very mature and has also become quite competitive, so the retailers are opting new ways in order to increase their sales revenues and profit figures. They have adopted a proper relationship marketing plan and loyalty strategy which looks to develop customer loyalty and retention. The retailers have developed several ways to build up the longer-term relationships in order to improve their profitability figures.

The usage of loyalty schemes is one of the attracting competitive strategies used by the retailers in order to retain the value of the brand, customer service, price, range of merchandise, promotions of the product and location. The focus is quite high on the end-to-end shopping experience, by retaining the customers and improving their share of selected customers' business. There are two aims of the retailers in the current situation. The first aim is to increase the sales revenues by increasing the purchase/usage levels, and/or also increasing the large range of products purchased from the supplier. The second aim is to create a defensive mechanism by creating a strong relationship between the brand and current customers in order to preserve the current customer base. Therefore, it is quite clear that the customer loyalty programs are used by the retailers in order to improve their sales figures to a very large extent.

1.2 Statement of the Problem

The major objective of the research is to assess the usage of loyalty schemes in direct selling carried out by the online shopping websites such as amazon.co.uk.

1.3 Research Questions

The research questions for the study are:

Q1- What are the major benefits of using loyalty schemes for the retailers in UK?

Q2- How can the strategy of loyalty schemes work for the online shopping websites in UK?

Q3- How can the strategy of ...