Online loyalty and its interaction with switching barriers Dilip Mutum a,n , Ezlika Mohd Ghazali b,1 , Bang Nguyen c,2 , David Arnott d,3 a Nottingham University Business School, The University of Nottingham Malaysia Campus, Jalan Broga, 43500 Semenyih, Selangor, Malaysia b Department of Marketing and Information Systems, Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur, Malaysia c East China University of Science and Technology, 130 Meilong Road, Xuhui, 200237 Shanghai, China d Warwick Business School, The University of Warwick, CV4 7AL Coventry, UK article info Article history: Received 30 April 2013 Received in revised form 26 August 2014 Accepted 27 August 2014 Available online 20 September 2014 Keywords: Online switching barriers Online switching inducements Online loyalty abstract The results of empirical research on online retail switching tendencies is quite mixed and only a few have specifically examined the presence, frequency or impact of switching barriers and switching inducements in the context of online services. Empirical evidence shows that there is “stickiness to certain sites” experienced by online customers and that they do less comparative shopping than might be expected. This paper conceptualises online switching behaviour as the interaction of barriers and inducements (both real and perceived) using Oliver's four-stage loyalty model. It also highlights the need to re-examine the concept of online loyalty and its interaction with switching barriers and inducements in the online context. & 2014 Elsevier Ltd. All rights reserved. 1. Introduction The online retail market is a very important channel of choice for customers worldwide. According to a report by the Boston Consulting Group (2012), the internet economy of the G20 countries is expected to grow at more than 10 percent annually for the next five years and contribute US $4.2 trillion to the combined GDP of these countries in 2016. Thus, it is not surprising that there is a huge interest in enhancing the understanding of factors involved in building online customer retention. Out of these, switching barriers (SBs) have emerged as one of the most important factors for online retailers to consider. Unlike the physical brick and mortar shops, where there is a greater opportunity for building relationships (Bansal et al., 2004), retaining customers online is considered more difficult due to the non-personal and transaction-based nature of the interactions. Varadarajan et al. (2008) notes that the relative ease of switching online accentuates the importance of building and maintaining SBs. However, the findings emerging from empirical research on online switching behaviour is quite mixed. For example, Jones et al. (2000) found that switching barriers were important factors influencing customers repurchase intentions under certain cir- cumstances. On the other hand, Holloway (2003) concluded that switching costs (one of the categories of SBs) are unimportant and negligible. Even though the concept of SBs has been discussed quite extensively in marketing literature with commendable attempts to explore the influence of SBs in the online market environment (Balabanis et al., 2006; Goode and Harris, 2007; Holloway, 2003; Li et al., 2007; Tsai and Huang, 2007; Yang and Peterson, 2004), there is still a lack of consensus in terms of its definition, categories and even measurement of the constructs. Furthermore very little effort was made to identify and measure SBs specific to the online services sector. In view of this, it was considered important to examine consumer switching behaviour from an online services sector perspective from both academic and practical perspectives. There is also a widespread assumption that switching barriers are almost negligible in the online shopping context (Bakos, 1997). The popularity of online shopping is supposed to have created a level playing field where ‘competitors are just one click away’. While most retailers acknowledge that having a loyal online customer base is important and beneficial, a large number of online retailers lack a knowledge of the strategies required to retain customers and develop loyalty (Wilcox and Gurau, 2003). This indicates that developing loyalty is not as straightforward as some studies have suggested. This paper attempts to integrate past studies into a theoretical framework for understanding and to classify customer switching behaviour, which is conceptualised in this paper as the interaction between SBs and the four-stages of loyalty based on Oliver's (1997) Contents lists available at ScienceDirect journal homepage: www.elsevier.com/locate/jretconser Journal of Retailing and Consumer Services http://dx.doi.org/10.1016/j.jretconser.2014.08.012 0969-6989/& 2014 Elsevier Ltd. All rights reserved. n Corresponding author. Tel.: þ6 03 8725 3754. E-mail addresses: dsmutum@gmail.com (D. Mutum), ezlika.ghazali@gmail.com (E. Mohd Ghazali), bang.london@gmail.com (B. Nguyen), david.arnott@wbs.ac.uk (D. Arnott). 1 Tel.: þ6 03 7967 3972. 2 Tel.: þ86 13761689258. 3 Tel.: þ44 24 765 24487. Journal of Retailing and Consumer Services 21 (2014) 942–949