2016 4th International Conference on Enterprise Systems
Customer Loyalty Enhancement of Online-to-Offline Marketing in Beauty Industry
P.P.L. Leung, C.H. Wu, W.H. Ip, G.T.S. Ho,
K.K.Y. Kwong
Department of Industrial and Systems Engineering
The Hong Kong Polytechnic University
Hong Kong
13902635r@connect.polyu.hk
Abstract— In the competitive and low entrance barrier beauty
industry, customer loyalty is a critical factor for business
success. Research literature of customer relationship
management recommends various factors contributing to
customer loyalty in the general setting; however, there are
insufficient studies empirically weigh the importance of each
critical factor for the beauty industry. This study investigates
and ranks empirically the critical factors, which contributes to
customer loyalty of Online-to-Offline (O2O) marketing in the
beauty industry. Our result shows that customer satisfaction,
customer switching costs, customer trust, corporate image and
customer value positively influence customer loyalty of O2O
marketing and in the order of decreasing importance.
Attributes contributing to the five critical factors have also
been studied and ranked. Findings of this study can help the
beauty industry to develop an effective O2O marketing plan
and hence customer loyalty can be enhanced through the
process of implementing targeted marketing activities.
Keywords- Analytical Hierarchy Process; beauty industry;
customer loyalty; O2O marketing
I. INTRODUCTION
The beauty industry is a big growing business with
estimated over $159 billion US dollars each year worldwide
[1]. The Nielsen Company [2] is one of the largest global
marketing research firms. It found that almost half (49%) of
the consumers in Hong Kong are seeking for alternatives
before purchasing when involving in e-commerce. With the
unlimited information available online, the bargaining power
of customers increases [3]. In order to survive in the
challenging and competitive market, organizations try to
adopt different commercial and marketing strategies. For
example, group buying model with discount is applied
widely in various industries to motivate consumers.
However, price competition-based group buying model or
similar marketing activities is only able to increase the sales
of the products or services in short term and cannot lead to
long-term competitiveness [4]. Customer loyalty cannot be
solely achieved by providing lower price. Also, it is
impossible for organizations to provide discount all the time
to attract customers.
Inspired by the popularity of the information technology
and e-commerce, various industries are looking for the
978-1-5090-3790-2/16 $31.00 © 2016 IEEE
DOI 10.1109/ES.2016.13
V.W.S. Cho
Department of Management and Marketing
The Hong Kong Polytechnic University
Hong Kong
opportunities of online-to-offline (O2O) business model.
O2O integrates the offline physical shop with the virtual
world [5]. The use of O2O is aimed at attracting and
increasing awareness of potential customers online and thus
increasing the sales and business revenue. O2O marketing is
applied to accomplish the goal of driving a large amount of
potential Internet customers to the offline shop, resulting in
enhancing the amount of in-store transactions [6].
Prior researches and studies in O2O and marketing have
suggested the advantages of using O2O marketing as a
strategy in promoting business [6] and improving the overall
marketing campaign and organizational performance [7].
Researches and studies in customer relationship
management, on the other hand, have highlighted the
importance of achieving customer loyalty for long-term
competitiveness of an organization, such as viability [8],
customer retention [9] and referrals [9].
Despite the documented importance and advantages of
O2O marketing and customer loyalty, prior researches
seldom studied the critical factors that contribute to customer
loyalty enhancement of O2O marketing. This study aims to
explore the factors contributing to customer loyalty of O2O
marketing in the beauty industry. In particular, facilitating
factors are weighed relatively and ranked in decreasing order
of importance. It is expected that the beauty industry can
utilize the research results for formulating targeted strategy
and allocating resources wisely.
This study has both theoretical and commercial
contributions. Our theoretical framework fills in the gap of
weighing and ranking the critical factors contributing to
customer loyalty of O2O marketing in the beauty industry.
Our findings help organizations in the beauty industry to
formulate effective O2O marketing strategies based on the
factors identified and utilize resources for enhancing
customer loyalty and thus long term competitiveness in a
wise manner. There are also implications for third-party
marketers to attract more O2O organizations adopting O2O
marketing for business.
In the next section, literature on issues related to beauty
industry, customer loyalty in general sense, and O2O
marketing will be discussed. The methodology will be
presented in Section III while findings will be presented in
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Section IV. Discussions will be presented in Section V and
this study will be concluded in Section VI.
II. LITERATURE REVIEW
In recent years, the beauty industry continues to expand
globally. The beauty industry has been one of the most
developed industries in Hong Kong [10]. There are more
than 5,000 registered beauty-related establishments in Hong
Kong. The registered beauty-related establishments connect
with more than 40,000 specialists including beauty advisor,
make-up artists and beauticians [10]. With the well-
developed information technologies and efficient
information flow, consumers of beauty industry in Hong
Kong tend to conduct research online rationally before
purchasing [10]. These give rise to the business opportunities
of O2O model [5] and O2O marketing [11] in the recent
years.
O2O model is a new business model. O2O model
integrates the offline physical shop with the virtual world
[12]. Online channels, such as online shopping platform and
websites, are utilized to attract potential customers to make
online transactions and drive subsequent offline sales by
redemption [5, 6, 12]. With the O2O model, organizations
can utilize the data collected from transactions to provide
attractive promotion or marketing campaigns [13]. It is
believed that the O2O model will not affect online sales but
increase both store’s traffic and sales [14].
In line with the transformation of business model, offline
marketing and online marketing strategies are more
commonly used in cooperation with each another. The
cooperative usage of online and offline marketing strategies
are referred as online-to-offline (O2O) marketing [11, 15].
O2O marketing is a new brand business strategy that firstly
attracts the customers on the Internet, and subsequently
brings the potential online visitors back to the real world
store for product or service consumption [12]. O2O
marketing strategy has been adopted by numerous companies
from different industries [16].
Prior researches in O2O focused on studying the
structure or concept of O2O business model [13, 17], or the
performance of different O2O model implementation
approaches [6]. Researches in marketing and customer
relationship management, on the other hand, suggested that
various factors, which are customer satisfaction [11, 18, 19,
20], customer switching costs [11, 19, 21], customer value
[11, 19, 20, 21], customer trust [11, 19, 21] and corporate
image [21, 22], positively affect customer loyalty. Customer
switching cost can be further divided into financial cost and
time cost [11], while customer satisfaction can be achieved
by improved service quality [18, 22], product quality [23],
returns management [19] and incentive [11]. On the other
hand, customer value can be measured in terms of functional
value [11, 24], customer experience value [11, 24, 25] and
cost value [11], while customer trust can be influenced by
customer data security [11], interaction [11] and
recommendation from others [11, 21]. Last but not least,
corporate image can be obtained by businessman reputation
[11], advertisement [26] and design of website [26].
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Addressing the business opportunities created by O2O
marketing, the importance of customer loyalty for long-term
organizational advantages, and the lack of research in
empirical weighing the critical factors contributing to
customer loyalty enhancement of O2O marketing in the
beauty industry, this study conducts a survey to determine if
factors influencing online and offline marketing and
customer loyalty, as suggested in prior researches, affect in
the emerging O2O opportunities. The order of their
importance is also ranked using Analytic Hierarchy Process
(AHP).
III. METHODOLOGY
This study adopts a two-stage Customer Loyalty
Enhancement of O2O Marketing Framework (Fig. 1). The
proposed two-stage framework begins with data collection
through reviewing literature and conducting survey, and
followed by data analysis using Analytical Hierarchy Process
(AHP).
With the aid of literature review, a three-level
hierarchical model has been formulated (Fig. 2). The main
objective of the study is placed at the top level of the
hierarchy. The critical factors contributing to customer
loyalty of O2O marketing are placed at the criteria-level of
the hierarchy. The critical factors are customer satisfaction,
customer switching costs, customer value, customer trust and
corporate image. Similarly, the attributes of the five critical
factors identified, such as financial cost, service quality,
customer experience value, customer data security and
businessman reputation, are placed at the sub-criteria level.
As different attributes affect different critical factors of
customer loyalty, and their level of importance varies from
one to another industry, the relative importance of these
fifteen attributes in case of O2O marketing in beauty
industry are collected through a survey.
A survey is conducted to solicit the viewpoint from
customers’ perception for pairwise comparisons of critical
factors/attributes contributing to customer loyalty
enhancement of O2O marketing in the beauty industry. The
questionnaire is designed based on the three-level
hierarchical model formulated. The critical factors and
attributes applied in the evaluation were selected based on
literature review described in Section II. The questionnaire
consists of seven parts, includes questions for personal
particulars and spending behaviors of participants, questions
for pairwise comparisons among the five critical factors and
questions for pairwise comparisons among the fifteen
attributes of the five critical factors. To make pairwise
comparisons, two critical factors/attributes are evaluated at a
time in terms of their relative importance using a scale from
1 to 9 [27] as shown in Table I. Survey respondents cover
existing and potential customers of the beauty industry in
Hong Kong. In order to avoid biased responses due to
demographic factors, survey respondents cover different
genders, age groups, occupation and monthly income.
Simple language of Chinese and English are used, and
elaborations on definitions are provided for enhanced
readability.

Figure 1. Two-stage Customer Loyalty Enhancementof O2O
Marketing
A pilot test with a sample size of ten is conducted.
Viewpoints and responses from the survey respondents are
collected for fine-tuning the questionnaire before actual
administration of questionnaire.
Figure 2.
In the actual administration of questionnaire, it is
expected to collect a hundred questionnaires via non-
probability sampling, specifically the snowball sampling and
convenience sampling. With all questionnaires received
before deadline, data collected will be analyzed using
Analytic Hierarchy Process (AHP) for systematic ranking of
critical factors and attributes.
This study applies Analytic Hierarchy Process (AHP) to
rank the critical factors and their associated attributes. AHP
is a widely used decision-making technique for dealing with
process involving multiple, complex and unstructured
criteria [28]. AHP has been widely applied in Decision
Support System [29]. The advantages of AHP over other
decision-making techniques include its ability to deal with
both quantifiable and intangible criteria [27], its ability to
measure the consistency of the decision [30], and its features
of breaking down a complex problem into several levels of
simpler problems [31]. Most importantly, AHP allows easier,
better and more efficient and effective critical success factors
identification and weighing [29]. Therefore, the use of AHP
is compatible with the research objective of this study yet it
is easy, efficient and effective.
There will be altogether twenty six pairwise comparisons
among critical factors and their attributes. To avoid the
biased response of the online questionnaire respondents, a
group decision making approach [30, 32], specifically the
arithmetic mean of individual’s judgement approach, is
employed in this study. An average value of respondents’
valid response to each comparison is calculated. Then, local
weights, global weights and consistency ratio (CR) of each
critical factor/attribute are calculated. The higher the value of
the global weight, the higher the importance the critical
factor/attribute is.
Three-level hierarchical model
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 IV. FINDINGS
The online questionnaires were distributed for a month,
from 24th February 2016 to 24th March 2016. A hundred
and twenty four (124) respondents returned and four (4) of
the returned questionnaires void due to missing data. As a
result, a hundred and twenty (120) questionnaires were
collected. The profile of valid questionnaires’ respondents is
shown in Table II.
In the questionnaire, there are twenty six pairwise
comparison questions. The arithmetic mean of the hundred
and twenty (120) respondents’ responses for each pairwise
comparison is calculated and adjusted by rounding up to the
nearest integer (Table III). The adjusted value is input into
the pairwise comparison matrix. The pairwise comparisons
of all the five critical factors are conducted with respect to
the goal of customer loyalty enhancement of O2O marketing
in the beauty industry. The pairwise comparison indicates the
relative importance of each critical factor against the goal, as
well as the relative importance of each attribute against the
corresponding critical factor. The pairwise comparison
matrix constructed for criteria-level (i.e. critical factors) is
shown in Table IV. As indicated in the last row of Table IV,
the Consistency Ratio (CR) of the pairwise comparison
matrix is 0.083 (<0.1) that respondents’ subjective evaluation
about critical factors contributing to customer loyalty of O2O
marketing in the beauty industry are regarded as consistent
[33]. Thus, no correction of judgement is required.
Similar usage of AHP is applied to conduct pairwise
comparison among all attributes with respect to their
corresponding critical factor. For example, “financial cost”
and “time cost” were compared with respect to the critical
factor of “customer switching cost” while “service quality”,
“product quality”, “returns management” and “incentive”
were compared with respect to the critical factor of
“customer satisfaction”.
After the pairwise comparisons, the local weights of
criteria and sub-criteria were calculated. The weights for
criteria level are shown in Fig. 3. The local weights were
then used for the calculation of global weights. The
composite priority weights of all criteria and sub-criteria are
shown in Table V.

TABLE I. INDEX FOR PAIRWISE COMPAIRSON Number of

Respondents (%)
Intensity of $5,000 or below 69 (57.5%)
Definition Interpretation
Importance
Two factors/attributes are equally $5,001-$15,000 28 (23.3%)
1 Equal importance
important Monthly income (HK$)
Moderate A factor/attribute is slightly more $15,001-$25,000 23 (19.2%)
3
importance important than another
A factor/attribute is more Above $25,000 0 (0%)
5 Strong importance
important than another
0 21 (17.5%)
Very strong A factor/attribute is strongly
7
importance more important than another 1-5 73 (60.8%)
Extremely strong A factor/attribute is extremely Number of visits to
9 beauty shop per month
importance more important than another 6-10 26 (21.7%)
Two factors/attributes are equally
2, 4, 6, 8 Intermediate values Above 10 0 (0%)
important
$500 or below 68 (56.7%)

Monthly expenses on $501-$2000 31 (25.8%)

TABLE II. PROFILE OF RESPONDENTS OF VALID QUESTIONNAIRE
beauty product(s) (HK$) $2001-$5000 21 (17.5%)
Number of
Respondents (%) Above $5000 0 (0%)
Male 38 (31.7%)
Gender
Female 82 (68.3%)

18 or below 28 (23.3%)

19-25 69 (57.5%)
Age
26-35 23 (19.2%)

Above 35 0 (0%)

Student 86 (71.7%)

Employed 34 (28.3%)

Occupation Unemployed 0 (0%)

Self-employed 0 (0%)

Housewife 0 (0%)

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 TABLE III. RESULTS OF QUESTIONNAIRE FOR PAIRWISE COMPARISON (CRITICAL FACTORS)

Comparison Arithmetic Mean Valuea Adjusted Valuea

Customer satisfaction (A) vs Customer switching costs (B) -2.70 -3

Corporate image (A) vs Customer satisfaction (B) 7.53 8

Corporate image (A) vs Customer switching costs (B) 5.99 6

Corporate image (A) vs Customer trust (B) 3.32 4

Corporate image (A) vs Customer value (B) -1.64 -2

Customer satisfaction (A) vs Customer trust (B) -6.52 -7

Customer satisfaction(A) vs Customer value (B) -7.70 -8

Customer switching costs (A) vs Customer trust (B) -4.90 -5

Customer switching costs (A) vs Customer value (B) -5.84 -6

Customer trust (A) vs Customer value (B) -2.67 -3

a. Values with negative sign denote the preference of factor (A) over factor (B)

TABLE IV. PAIRWISE COMPARISON OF CRITICAL FACTORS

Customer Customer Customer Customer Corporate
Switching Cost Satisfaction Value Trust Image
Customer Switching Cost 1 1/3 6 5 6

Customer Satisfaction 3 1 8 7 8

Customer Value 1/6 1/8 1 1/3 1/2

Customer Trust 1/5 1/7 3 1 4

Corporate Image 1/6 1/8 2 1/4 1

Consistency Ratio (CR) = 0.083 (<0.1)

TABLE V. COMPOSITE PRIORITY WEIGHTS FOR CRITICAL FACTORS AND ATTRIBUTES

Criteria Global Weight Sub-criteria Local Weight Global Weight

Customer Switching Cost 0.27790 Financial Cost 0.83333 0.23158

Time Cost 0.16667 0.04632

Customer Satisfaction 0.51333 Service Quality 0.24686 0.12672

Product Quality 0.59111 0.30343

Returns Management 0.04539 0.02330

Incentive 0.11663 0.05987

Customer Value 0.04187 Functional Value 0.65714 0.02751

Customer Experience Value 0.06825 0.00286

Cost Value 0.27460 0.01150

Customer Trust 0.11112 Customer Data Security 0.58766 0.06530

Interaction 0.29753 0.03306

Recommendation from Others 0.11481 0.01276

Corporate Image 0.05577 Businessman Reputation 0.72351 0.04035

Advertisement 0.19319 0.01077

55

Customer Trust 0.11112
Corporate Image 0.05577
Figure 3. Local/global weights of critical factors
To clearly identify the importance of all critical factors
and attributes on the goal of the hierarchical model, the
attributes were re-arranged in the decreasing order of global
weights such that decision makers can better understand the
attributes contributing to customer loyalty enhancement of
O2O marketing in the beauty industry most. The re-arranged
attributes are shown in Fig. 4.
V. DISCUSSIONS
In this study, identification of critical factors and
attributes for customer loyalty enhancement of O2O
marketing in the beauty industry is done through literature
review. A three-level hierarchal model is then developed, as
shown in Fig. 2. The main objective of the study (goal) is
placed at the top level, critical factors (criteria) are placed at
the middle level, and the attributes (sub-criteria) are placed at
the bottom level.
Pairwise comparisons of various criteria and sub-criteria
were conducted and are shown in Table IV. The local
weights and global weights of all criteria and sub-criteria
were then determined as shown in Fig. 3 and Table V.
Design of Website 0.08331 0.00465
Cost Value 0.27460 0.01150
Customer Data Security 0.58766 0.06530
Interaction 0.29753 0.03306
Recommendation from Others 0.11481 0.01276
Businessman Reputation 0.72351 0.04035
Advertisement 0.19319 0.01077
Design of Website 0.08331 0.00465
Referring to the second column of Table V, the critical
factor “customer satisfaction” possesses the maximum global
weight of 51.3% among the other critical factors and is thus
the most important critical factor affecting customer loyalty
enhancement of O2O marketing in the beauty industry.
Global weight of “customer switching cost” (global weight =
27.8%) is approximately half of the global weight of the
“customer satisfaction” and thus stands at the second
position. Global weight of “customer trust” is 11.1% and is
ranked third. They are followed by corporate image (global
weight = 5.58%) and customer value (global weight =
4.19%). Results reveal that, despite the monetary concern,
customers prefer to make subjective decisions depending on
customer satisfaction and customer trust due to the emotional
nature of customers.
The fifth column of Table V highlights the global
weights of sub-criteria. The attribute “product quality”
possesses maximum global weight (global weight = 30.3%)
and is followed by “financial cost” (global weight = 23.2%)
and “service quality” (global weight = 12.7%). It shows that
though customers in the beauty industry are satisfied with
good “returns management” and “incentive”, good “product
quality” and “service quality” through O2O marketing are
far more important for customer loyalty enhancement in the
beauty industry.
The attributes are, finally, ranked according to their
global weights as shown in Fig. 4. The bar chart summarizes
clearly the weight and priority of all the attributes of
customer loyalty enhancement in the beauty industry. It will
be very useful for the management of the beauty industry to
enhance customer loyalty while designing their O2O
marketing strategies.
With the aid of the research results, management of the
beauty industry is able to be aware of the existence of critical
factors of customer loyalty enhancement through O2O
marketing. Most important, AHP quantifies subjective
judgement of individual customers and weighs the critical
factors and attributes numerically and relatively for
managerial and strategic purposes.
56

Figure 4. Priority-level of attributes
Among the five critical factors informed by literature,
customer satisfaction is the most important and influential
factor contributing to customer loyalty enhancement of O2O
marketing in the beauty industry. High customer satisfaction
directly and positively leads to customers’ positive emotions,
preferences and attitudes. All these subsequently support
repeated purchase and thus make them to be loyal to the
brand [11, 34]. In recent years, the complaint rate of the
beauty industry is increasing dramatically. Consumers’
attitudes towards product and service quality have been
changing. The minimum level of quality standard can no
longer guarantee customer satisfaction. Other critical factors
are required to be fulfilled an even excelled. Product and
service quality perceived by customers differ from
individuals. However, individual customers share similar
behaviors that they will complain to the organizations and
seek for compensation if service or product received cannot
meet their expectations. Under adverse situation, they will
switch to the service or product offering by other
organizations. Therefore, management of the beauty industry
should focus on retaining customers and enhancing customer
loyalty using marketing means instead of lowering price
solely for attracting new customers.
Customer switching cost, ranked second, is an important
factor affecting customer loyalty enhancement of O2O
marketing. Customers will not switch to other organizations
when the switching costs are high [11, 21]. As a result,
customer loyalty can be increased with increasing customers
switching costs. Moreover, the results reveal that, even for
the case that the customers are dissatisfied with the service or
product quality, they will not switch to other organizations
when the switching costs involved are too high or
unaffordable. In Hong Kong, there is a notable phenomenon
57
that customers of the beauty industry seldom switch to other
organizations as they perceived the switching costs, in terms
of time and money, involved are usually too high and
unaffordable. Management of beauty industry shall therefore
implement O2O marketing strategies that can increase
customer switching cost, such as responsive pricing strategy
and offering a wide selection of products online.
Customer trust, ranked third, is another important factor
contributing to customer loyalty enhancement of O2O
marketing in the beauty industry. It is interesting to note that
customer trust is important to customer loyalty in e-
commerce [11, 35] as well as in the O2O era. Obtaining a
customer’s trust can build up a good relationship between the
customer and the organization. As a result, customers are
more willing to share or express the feelings with the
organization. The organization can thus develop more
targeted and effective marketing strategy for further
increasing the customer loyalty. There are various means of
obtaining customers’ trust in the beauty industry, such as
ensuring customer security. More details of how ensuring
customer security can increase customer trust will be
discussed later.
Besides, a good corporate image, ranked fourth, is
important for enhancing customer loyalty in the beauty
industry. A good corporate image can help the organization
to establish and maintain a stable and loyal relationship with
the customers and thus facilitates repeated purchase [21].
With the advancement of technology, news and information
can be searched and distributed widely within a short period
of time through online social platform. Once the organization
has a bad news, the news will be distributed immediately and
widely, and brings negative impacts on its corporate image.
More importantly, customers may lose confidence and
loyalty towards the organization. All these are difficult to
build up again.
Customer value, ranked fifth, is the relatively least
important factor out of the five critical factors informed by
the literature. A product/service containing a higher value
will make the customer to be more loyal to the organization
[11]. In Hong Kong, people pursue a product/service of
higher value due to the increasing desire of life quality.
Therefore, when consumers decided to purchase a particular
product/service, they prefer to conduct comparison rationally
and pick the one with the highest perceived value.
Not only identifies and ranks the critical factors of
customer loyalty enhancement of O2O marketing, this study
also contributes to the identification and ranking of
attributes. The attributes “product quality” (global weight =
30.3%), “financial cost” (global weight = 23.2%) and
“service quality” (global weight = 12.7%) possess
significantly higher global weights than the other twelve
attributes. The results further showed that two out of four
attributes of “customer satisfaction”, which are “product
quality” and “service quality”, ranked among top five of the
fifteen attributes contributing to customer loyalty
enhancement of O2O marketing in the beauty industry.
Among all attributes, product quality is the most
important attribute contributing to the ultimate goal of
customer loyalty enhancement of O2O marketing in the
beauty industry. Higher product quality will enhance
customer satisfaction dramatically and thus increase the
customer loyalty towards the organization. Product quality
has a significant direct impact on perceived customer
satisfaction which strengthens the relationship between the
organization and its customers [36]. If the product quality is
not good, the customers will not satisfy with the product and
even the organization. As a result, the customer will switch
to other organizations which offer the product with better
quality.
Besides, other than product quality, service quality also
contributes to customer satisfaction and ranked third among
other attributes. Improving service quality can substantially
increase customer satisfaction so as to customer loyalty [18].
Service quality in the beauty industry can be enhanced by
providing sound after-sales services and assurance, and
enhancing responsiveness [12]. Example of methods relating
to enhancing responsiveness that can bring customers from
online platform to offline store includes timely sending
messages to customers for acknowledging and replying
customers’ enquiries.
In the meantime, analysis results found that financial cost
and incentive are important attributes ranked in the top five.
Most of the respondents of the questionnaire are youngsters
aged below 25 years old (80.8%) or with monthly income
below HK$5,000 (57.5%). They have described themselves
as price-sensitive and thus their buying decision would be
affected by financial cost and incentive greatly. In line with
the survey results, Sa Sa International Holdings Limited (Sa
Sa) [37] commented that the elements of the beauty products
business have been changing along with the rapid
development of online retailing. Online retailing facilitates
efficient flow of information and transparency of product
information. These allow customers to have price
comparison in an efficient and effective manner before
purchasing. Therefore, it is one of Sa Sa’s marketing
strategies to provide more incentives and low-priced
products to attract young customers, as well as to enhance
their loyalty to the organization.
Last but not least, customer trust in terms of customer
data security is considered as an important attribute by the
survey respondents. In e-commerce, customer data security
is always a concern and so as to O2O marketing. In Hong
Kong, disclosure of customer data to the third party becomes
a current issue and customers place more emphasis on the
protection of privacy and data security. Therefore, it is
necessary for organizations in the beauty industry to ensure a
secure and reliable online and offline environment in order to
gain the trust of the customers, so as to make them to be
loyal to the organization.
This study presents a comprehensive framework of
critical factors and attributes identification along with
quantifying their global weights to the management of the
beauty industry. With proper usage of the framework,
management of the beauty industry is capable to understand
the relative importance of the critical factors and associated
attributes, to identify necessary resources in order to achieve
customer loyalty for long-term competitiveness, and to
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formulate targeted O2O marketing strategy in improving the
overall marketing campaign.
VI. CONCLUSION
The continual growing beauty industry is currently
encountering the business opportunities created by O2O and
the threats of intense competitions and low entry barriers.
Prior researches have proven the utilization of marketing
strategies in enhancing organizational outcomes and
customer relationship. The purpose of this study is to identify
the critical factors and attributes contributing to customer
loyalty enhancement of O2O marketing in the beauty
industry. Also, this study aims to understand the relative
importance of the critical factors and associated attributes for
targeted marketing.
This study proposed a three-level hierarchical model to
understand whether the critical factors and their attributes
informed by literature contribute to customer loyalty of O2O
marketing. Critical factors studied by this study include
customer switching cost, customer satisfaction, customer
value, customer trust and corporate image.
Furthermore, this study applied AHP to quantify
subjective judgement of potential customers and customers
of the beauty industry concerning the critical factors and
attributes together with relative importance and ranking. The
results are expected to contribute to academics and business
aspects. Among the five critical factors, customer
satisfaction is found to be the most important one
contributing to customer loyalty enhancement of O2O
marketing perceived by customers. It is followed by
customer switching costs, customer trust, corporate image
and customer value. The results also found that two out of
four attributes of customer satisfaction, which are product
quality and service quality, ranked among top five of the
fifteen attributes. In practice, the results of this study would
help relevant practitioners better allocate resources and
develop O2O marketing plan to enhance customer loyalty
and increase long-term competitiveness. Sampling is a major
limitation in this study. In the future, survey shall be
conducted by using probability sampling method together
with increased sample size so that the research findings can
be generalized. The proposed analytical hierarchy structure,
and the identified factors and attributes will be applied to a
practitioner of Hong Kong beauty industry as a case study.
ACKNOWLEDGMENT
The authors would like to thank the Research Committee
and the Department of Industrial and Systems Engineering,
The Hong Kong Polytechnic University for their financial
assistance to the involved research student (RTPG). This
work is also supported in part by National Natural Science
Foundation of China (No. 71371190).
REFERENCES
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from MJMA, LLC Family of Companies:
http://www.mjmallc.com/industries.html, 2015.
[2] The Nielsen Company.. More than Eighty Percent of Hong Kong
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