Has behavioural loyalty to online supermarkets declined? Giang Tue Trinh, Zachary William Anesbury *, Carl Driesener Ehrenberg-Bass Institute, School of Marketing, University of South Australia, 70 North Terrace Adelaide, South Australia, AUS 5000, Australia ARTICLE INFO Article history: Received 3 August 2017 Revised 16 October 2017 Accepted 31 October 2017 Available online Keywords: Online supermarkets Customer loyalty Dirichlet model Panel data A B ST R AC T This paper investigates consumer’s behavioural loyalty to online supermarkets over time. We use three measures of behavioural loyalty (share of category requirements, repertoire size, and polarisation index) from four major online supermarkets in the UK across five categories. We find that loyalty to online su- permarkets is high in the categories we examined, though it declined somewhat from 2005 to 2009 and subsequently remained stable from 2010 to 2014. We also extensively test the generalisability of the well- known Dirichlet model to the choice of online supermarkets. We find that the model gives better fit from 2010 to 2014 than from 2005 to 2009 and can describe loyalty and competition in this context. © 2017 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved. 1. Introduction Online retailing is revolutionizing the retail landscape (Wood, 2011) with over three-quarters of all United Kingdom (UK) citi- zens have purchased goods online (Office for National Statistics, 2015). After a slow adoption by apparently hesitant consumers (Elliot and Fowell, 2000; Freeman, 2009; Geuens et al., 2003; Pavitt, 1997; Ramus and Nielsen, 2005) online sales grew from $1B in 1995 (Lohse and Spiller, 1998; Schmid et al., 1996) to almost $2T in 2016 (eMarketer, 2016). Today, online retail accounts for just over 8% of all retail sales and is projected to increase to around 14% by 2020 (Business Wire, 2016; eMarketer, 2016). Online retail is continu- ing to grow both regarding total dollar spend and as a proportion of total retail and supermarket sales. In this context, it is impor- tant to understand if consumers’ behavioural loyalty to online supermarkets has decreased, remained stable or increased during the previous decade. Arguably it is harder to retain customers due to increased com- petition and minimal customer switching costs in the online environment, which is why this is of particular interest to retail- ers (Srinivasan et al., 2002). There have not been any long-term studies investigating how consumers allocate their purchases for a given category over the available online supermarkets and how this might have evolved. There have, however, been some studies that have captured online retailer loyalty in a short period. For example, Huang (2011), using household panel data from the United States over a one year period (2007), shows that there is excess loyalty to online retailers compared to a theoretical benchmark. Melis et al. (2015) found that shoppers initially tended to purchase from the same supermarket brand online from which they already pur- chased from offline. Elms et al. (2016) also found that consumers bought from their preferred offline supermarket when they first pur- chased online. However, Dawes and Nenycz-Thiel (2014) recent research comparing online supermarket purchasing patterns in the UK between 2008 and 2010, found increased cross-supermarket pur- chasing over the two years. Given the importance of online store loyalty to all online retailers, this early indication of decline is worth exploring further, especially since prior research in the area is in- sufficient. Both the absolute level and the evolution of loyalty to online supermarkets have important implications for those busi- nesses specifically, but also potentially to other retailers employing similar models. The issue is one of understanding the prevailing com- petitive dynamic in the market place – is it more akin to subscription or repertoire markets (Sharp et al., 2002) and what are the likely future dynamics? While these previous studies show some insights, they do not provide any coherent picture of the dynamic of loyalty to online su- permarkets, particularly over the long term. Such a study might allow us to gauge the likely path of future loyalty to online supermar- kets. We, therefore, conduct analyses across ten years (2005 to 2014) to assess the evolution of the dynamics of online supermarket loyalty. 2. Loyalty measures As this study investigates behavioural loyalty, we use the three following measures: share of category requirements, repertoire size, and polarisation index. Although SCR is one of the most impor- tant measures of brand loyalty (Farris et al., 2006), defining brand loyalty in this way has some problems (Danaher et al., 2003). For example, consumers who repeat purchase the same brand, even * Corresponding author. E-mail address: Zachary.Anesbury@marketingscience.info (Z.W. Anesbury). https://doi.org/10.1016/j.ausmj.2017.10.005 1441-3582/© 2017 Australian and New Zealand Marketing Academy. Published by Elsevier Ltd. All rights reserved. Australasian Marketing Journal ■■ (2017) ■■–■■ ARTICLE IN PRESS Please cite this article in press as: Giang Tue Trinh, Zachary William Anesbury, Carl Driesener, Has behavioural loyalty to online supermarkets declined?, Australasian Marketing Journal (2017), doi: 10.1016/j.ausmj.2017.10.005 Contents lists available at ScienceDirect Australasian Marketing Journal journal homepage: www.elsevier.com/locate/amj