The primary aim of this paper is to address the question of how the membership of a multi-vendor loyalty program influences the consumers’ online purchase behavior and process. The issue is approached by applying it to the appropriate case of Payback, Germany’s largest and most popular multi-vendor loyalty program.
To do so, I conducted open-ended interviews with informants that were experienced both concerning online purchasing as well as dealing with the loyalty program. The data analysis thereby revealed how the respective loyalty program exerts influence on the online consumers’ behavior within different phases of their purchase process. During the second stage of the analysis two prototypic extended purchase processes were established which depend on the characteristics and typology of the online consumers. These findings enlarge the comprehension about the effectiveness of such programs and extend prior research on consumers’ online decision making. It is further shown that for an operator of a multi-vendor loyalty program it is crucial to create an understanding about the motives as well as the way its members use the program differently. Through this knowledge the operator can provide better and more suitable incentives adapted for different types of program members and can thus improve the customer approach. Thereby, the effectiveness of a multi-vendor loyalty program can be influenced and increased even before the actual purchase process takes place.
The paper is organized as follows: First, I will give a brief overview over the past research on multi-vendor loyalty programs and will show that the existing literature has to be extended to fully understand the effectiveness of such programs. To investigate the way consumers integrate the loyalty program within their online purchase process and thus to illustrate the divergence compared to the standard process of non-members, prior studies on consumers’ online purchase behavior are reviewed. Subsequently, the rationale and the setting of the study are described and empirical results are presented and further explained. The paper concludes with theoretical and practical contributions as well as the study limitations.
Table of Contents
1. Introduction
2. Literature Review
3. Methods
3.1 Empirical Setting and Theoretical Sample
3.2 Procedure
3.3 Data Analysis
4. Results
4.1 Payback’s Influence on Consumers’ Purchase Behavior and Decisions
4.2 Prototypic Extended Online Purchase Processes
5. Discussion
5.1 Theoretical Contributions
5.2 Practical Contributions
5.3 Study Limitations and Generalizability
6. References
7. Appendix
Research Objectives and Key Topics
The primary aim of this paper is to investigate how membership in a multi-vendor loyalty program, specifically Payback, influences consumer online purchase behavior and processes. The research identifies how these programs affect consumers across different stages of their purchasing journey and distinguishes between different shopper typologies to understand their varied interactions with loyalty rewards.
- Analysis of consumer behavior in multi-vendor loyalty programs
- Identification of distinct shopper typologies: utilitarian vs. hedonic
- Mapping of extended online purchase processes
- Evaluation of extrinsic factors influencing loyalty program effectiveness
- Managerial implications for personalized customer approaches
Excerpt from the Book
4.2 Prototypic Extended Online Purchase Processes
Two distinct prototypic online purchase processes were identified. For understanding the mechanics of collecting Payback points online, it is important to mention that consumers have to go to the Payback website and choose the respective shop from there before undertaking their purchase. If the buyer shops at a particular shop without having called up the Payback page before, he will not gain any points for his purchase.
Consumers of the first identified group can be said to have a determined purchase intention right from the start. They know what kind of product they need and start with a specific information search through the internet. With the assistance of comparison portals or google.com they identify the most suitable online shop to purchase from. Thereby, their decision is mostly based on the criteria price and convenience. Having made the decision where to buy, they call up the Payback webpage, in case the respective online shop is included in the program’s portfolio, to receive their bonus points on top. Their motivation to participate in the loyalty program therefore mainly consists of monetary reasons. The behavior of the members of this first group can be linked to the prototype of a “utilitarian shopper” who is problem solving, goal oriented, task related, and rational (Batra and Ahtola, 1991; Wolfinbarger and Gilly, 2001). This kind of shopper makes a rational decision and integrates Payback only at the end of his purchase process.
Chapter Summaries
1. Introduction: Outlines the importance of loyalty programs in online retail and defines the paper's focus on the influence of multi-vendor loyalty programs on the consumer purchase process.
2. Literature Review: Discusses existing research on loyalty programs, focusing on effectiveness, consumer behavior models, and the gap regarding extrinsic program influences.
3. Methods: Describes the qualitative research approach, specifically the use of open-ended interviews with experienced Payback users to analyze their purchase behavior.
4. Results: Details findings on how loyalty programs influence consumers during intention, adoption, and continuance, and categorizes users into utilitarian and hedonic typologies.
5. Discussion: Summarizes theoretical and practical contributions, suggesting that adapting customer approaches to specific shopper types significantly increases program effectiveness.
6. References: Lists the academic sources used to support the research.
7. Appendix: Provides original German interview transcripts used for the study's analysis.
Keywords
Multi-vendor loyalty programs, Online purchase process, Payback, Consumer behavior, Shopper typology, Utilitarian shoppers, Hedonic shoppers, Loyalty program effectiveness, Customer retention, Purchase intention, Incentive strategies, E-commerce, Marketing tools, Decision making, Consumer insights
Frequently Asked Questions
What is the core focus of this study?
The study examines the impact of multi-vendor loyalty programs on the online purchase behavior and decision-making processes of consumers, using Payback as a case study.
What are the primary themes discussed?
Key themes include the integration of loyalty programs into the consumer shopping journey, the classification of shoppers into utilitarian and hedonic types, and the role of extrinsic factors in program effectiveness.
What is the main research objective?
The goal is to understand how consumers utilize multi-vendor loyalty programs at different stages of their online purchase process and how this influences their shop choice and decision-making.
Which scientific methodology is employed?
The author adopts a qualitative approach, conducting in-depth, open-ended interviews with eight experienced online shoppers who are also users of the Payback loyalty program.
What topics are covered in the main body of the work?
The main body covers the literature review on loyalty effectiveness, the methodology of the study, the empirical results showing the influence of Payback on consumer behavior, and a discussion on managerial implications.
Which keywords best characterize this research?
Important keywords include multi-vendor loyalty programs, online purchase process, shopper typology, utilitarian/hedonic shoppers, and consumer decision-making.
How do utilitarian shoppers differ from hedonic shoppers in their usage of the program?
Utilitarian shoppers are goal-oriented and rational, integrating Payback only at the end of their process for monetary benefits, while hedonic shoppers seek fun and inspiration, often using the loyalty portal at the start of their journey.
Why is identifying shopper types crucial for operators?
Understanding these types allows operators to provide better, personalized incentives—such as thematic specials for hedonic shoppers or targeted point offers for utilitarian shoppers—which increases program effectiveness.
- Quote paper
- M.Sc. Vanessa Ostertag (Author), 2014, The impact of multi-vendor loyalty programs on the consumers' online purchase process, Munich, GRIN Verlag, https://www.grin.com/document/450749
