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Iqra University
(Main Campus)

Research Method and Skills

Instructor: Kamran Mohy-UD-Din

Impacts of Customer Services and Shipping

on Customer Satisfaction in Online
Shopping
By
Chaudhary Shan
Asghar – 47660
Sheikh
Muhammad Saad –
50520
Usama Iqbal Chaudary – 53637
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Abstract:
Purpose – The purpose of this paper is to understand the role of customer services and shipping
impact on customer satisfaction, to fill in a gap in the literature focused on customer service and
shipping to provide managerial guidance in logistics for e-commerce, and to develop insights on
logistic services for future research.

Design/methodology/approach – Using a validated survey instrument, 50 respondents in Karachi

are collected. The research model is analyzed using component-based estimation approach to
structural equation modeling.

Findings – The structural equation analysis of the study found that customer service and shipping
have a negative impact on customer satisfaction in Karachi, Pakistan. It also found that customer
service is the most insignificant factor among the examined antecedents for online shoppers in
Karachi.

Practical implications – This study can help both scholars and practitioners understand the
importance of customer service and shipping, in an online shopping environment in Karachi. It
provides insights on designing e-commerce relevant shipping services to satisfy and attract
customers in Karachi.

1. Introduction:
Now a day’s global e-commerce rise to an unpredictable stage through mobiles and social media
platforms. Consumers adopted to shop online immensely. According to a study validated that the
growth of global e-commerce rise up to $27 trillion in 2020 (eMarketer, 2016). Pakistan is the 6th
largest nation of population more than 22million (Zia et al. 2022). The male and female
demographics are 115.88 million males and 109.32 females (UN 2021). It is predicted that
Pakistan’s e-commerce market will generate revenue around US$ 7.66 billion in 2022 (Bashir,
2022). In e-tailing product availability, quality, timeliness and ease of return are linked with
customer satisfaction (Jain et al. 2017).
A very few studies show the importance of relationship between customer service and shipping
and behavior of customer and its aspects (Jain et al. 2017). Tuttle, (2011) studies shows that 78
percent customers did not purchase through online store if free shipping is not provided, it seems
that free shipping is very important to make a purchase through online stores. Santos and Boote,
(2003); Tam, (2011) studies tells that the customer service and shipping are very important in the
form of customer satisfaction and behavior of customers are recognized as affective.
The purpose of this study is to find the impact of customer service and shipping on customer
satisfaction. In e-commerce consumer behavior is effected by economic and social factors
(Chauhan and Rambabu, 2017). However, a systematic comparison of regions of emerging
market regarding the customer service and shipping is lacking. Therefore, this study addresses
this gap in the literature. The study considered a city of Pakistan Karachi, to find the customer
satisfaction about customer service and shipping logistics. Additionally, findings in this regard
might further the validity of the research model and its hypotheses. The rest of the paper is as
follows. Literature review is reported in section 2. Section 3 discusses the methodology. Section
4 explains the results and its discussion and conclusion, policy implications and limitations of the
study are described in section 5.
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2. Literature review:
This section provides a comprehensive review of the literature on e-commerce and online
shopping, the role of customer service in online shopping. The review is followed by a research
model with a set of hypotheses that are proposed to explain the relationships between customer
services and shipping in an online shopping environment and their impact on customer
satisfaction (see Figure 1).
E-commerce providers and online shoppers both are very important factors to understand
towards customer satisfaction. Customer satisfaction is defined as the extent to which customers
perceptions of the online shopping experience confirm their expectations (Li and Zhang, 2002).
Katta & Patro, (2016) explained the exponential growth of online shopping highlights the value
of focused on customer satisfaction as an essential factor in the formation of any online shops.
According to Vavra, T.G. (1997) Satisfaction process is the comparison of product and services
performance that what will customer expect. Customers' feelings of satisfaction or dissatisfaction
are indicators of whether a company has met their needs or not. (Nigel et al 2007).

Hypotheses:

Customer service:
Perceived customer service quality, according to Norizan and Abdullah (2010), significantly
affects satisfaction. According to Reibstein (2002), one aspect that is essential to a client's
pleasure is post-purchase customer assistance. More specifically, a number of practices are
discovered to be essential to a successful e-commerce business and they guarantee the company's
success in an e-business environment. We anticipate that customer service and customer
satisfaction are connected, in line with prior studies. Therefore, the following hypothesis is
made:

H1. Customer service has a positive relationship with customer satisfaction

Shipping:
The accurate delivery of goods to customers' homes is a stated aspect that influences online
shoppers' satisfaction, according to previous research (Hsu, 2008). According to Ho and Wu
(1999), the logistical details were the key elements in determining customer satisfaction in e-
business. These qualities included prompt delivery, after-service repairs, availability of
warranties, and product return ability. Customer satisfaction is predicted to be favorably
correlated with post-purchase logistical operations like shipping, tracking, and return services. In
light of this, the following is hypothesized:

H2. Shipping service has a positive relationship with customer satisfaction.

Theory:
The European Public Administration Network (EUPAN) described customer satisfaction with a
model using the disconfirmation theory, in which proposes that customer satisfaction with a
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service is linked to the size of the disconfirmation experience; where disconfirmation is related to
the person’s primary expectations. If experience of the service prominently go above the
expectation, then satisfaction will be great.

Conceptual model:

Customer
Service
H1
Shipping H2
Customer Satisfaction

Fig: 1

3. Data and Methodology:

Self-administered and interview-administered survey questionnaires are the two different
categories. Although either has advantages, self-administration is typically favored. Self-
administered survey questions are best for exposing the target population to a variety of
environmental factors, tackling complex subjects, and using fewer sources than interviews
(Bowling 2005). This study will employ a self-administered survey.

Variable description:
Variable Name: Source (Reference): Measurement:
Customer Service (CS): Cao et al. 2018 1. I have received prompt service
from the online stores.
2. It is easy to find customer service
number that I can call to ask
questions.
3. The online stores show a sincere
interest in solving customer
problems.
4. I feel the online stores are always
willing to help customers.
Shipping (SP): Cao et al. 2018 1. The online stores I use deliver the
product based on an agreed time.
2. I often find shipping options that
best fit me
3. I often receive free/discounted
shipping.
4. The online stores provide tracking
ability during shipping.
Customer Satisfaction (SAT): Cao et al. 2018 1. The services provided by the
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online store and sellers are very good.

2. The online shopping store provides
good customers service quality.
3. My online shopping experience is
satisfying.
4. I am satisfied with my online
shopping experience.

Research Technique:
This study employed a quantitative research method, which is used to represent numerical data
phenomena studied using mathematically based methodologies, particularly statistics (Yilmaz,
2013). Findings from quantitative research are typically portrayed as being more general and can
be utilized to analyses results and look into causal linkages. This will be useful for analysing the
two components of customer service and shipping, on customer satisfaction.

Statistics

Customer
SAT SAT SAT SAT Custome Shippin Satisfactio
CS1 CS2 CS3 CS4 SP1 SP2 SP3 SP4 1 2 3 4 r Service g n
N Valid 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50

Missin 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
g
Mean 2.52 2.64 2.54 2.52 3.04 2.96 2.82 3.02 2.98 3.00 2.94 3.10 2.5550 2.9600 3.0050

Median 2.00 2.00 2.00 2.00 4.00 4.00 3.00 4.00 2.50 2.50 3.50 3.50 1.7500 3.7500 2.7500

Mode 1 2 1 1 4 4 4 4 5 2 4 2 1.25 4.25 1.25a

Std. 1.47 1.46 1.47 1.55 1.55 1.59 1.41 1.45 1.66 1.49 1.42 1.41 1.36023 1.43335 1.33677
Deviation 4 7 4 5 1 0 0 0 0 8 0 8

Variance 2.17 2.15 2.17 2.41 2.40 2.52 1.98 2.10 2.75 2.24 2.01 2.01 1.850 2.054 1.787
3 3 2 8 7 9 7 2 5 5 7 0
a. Multiple modes exist. The smallest value is shown

4. Results:

Table 4.1:
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Variable Categories Frequencies Percentage

Gender Male 26 52%

Female 24 48%
Marital status Single 29 58%
Married 21 42%

Age 18 – 25 12 24%
26 – 30 17 34%
31 – 35 9 18%
36 – above 12 24%

Education Intermediate 4 8%
Bachelors 30 60%
Masters 12 24%
Others 4 8%

Demographics description:

The data collected for this study were through survey questionnaire. The target population was
the People of Pakistan in Karachi, the sample size is of 50 respondents.
The data of demographics collected was analyzed through SPSS where frequency test was
applied. The respondents from different age group have contribution in this survey.
The age group divided into 4 categories. According to Table,
On average 34% respondents belongs to the group of middle age people (i.e. 26 – 30years), and
on average, young and people above age of 36 have same strength in this data i.e. 24%, and
respondents belongs to the group of age between 31 to 35 years are very low i.e. 18% as compare
to other groups.
According to the above table 52% male respondents take part in this research more frequently as
compare to female. Now on the basis of marital status we observed that 58% of the respondents
are single and as compare to married respondents. It mean that single respondents have
participated in this research frequently. The respondents have different educational levels and
60% of the respondents are Bachelors in this research as compare to other educational levels.

Reliability:
The measurement of the reliability is more than important to check and report for the primary
data because if the data is not reliable the end results and forecasting will also not reliable.
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Chronabach’s alpha:

It looks at the correlation between items across all factors. Correlation among all the responses
that it checked. All variables' reliability analysis is shown in Table. Uma Sekaran (2003) asserts
that the dependability increases when the Cronbach's Alpha reliability value approaches 0.70.
The first variable customer service value consists of 4 items, each of which has an alpha value of
0.932. Shipping is the second variable with 4 items and an alpha value of 0.967. The value of the
alpha for the four components that make up the third variable that is customer satisfaction, value
is 0.912. It means that all variables are highly correlated and data is reliable.

Table 4.2:
s.no Variables Items Chronabach’s alpha

1. Customer Service (CS): 4 0.932

2. Shipping (SP): 4 0.967

3. Customer Satisfaction (SAT): 4 0.912

Factor Analysis:
Table 4.3:
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .761
Bartlett’s Test of Sphericity Approx. Chi-Square 579.326
Df 66
Sig. <.001

The present analysis used principal components method (Guadagnoli & Velicer, 1988;
Schonemann, 1990; Steiger, 1990; Vellicer & Jackson, 1990) to reduce its 12 Likert based
questionnaire items into 3 best manageable proposed factors. To determine the adequacy of the
sample, Kaiser-Meyer-Olkin was used which, showed the value of 0.761 which is equal to 0.7
and suggests that the sample is sufficient to run factor analysis (Leech, Barrett, & Morgan, 2005;
Barkus, Yavorsky, & Foster, 2006; Ali & Raza, 2015). Bartlett’s test of sphericity (Approx. Chi-
Square = 579.326, df = 66, p < 0.001).

Table 4.4
Component
1 2 3
CS1 .954
CS2 .836
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CS3 .923
CS4 .930
SP1 .964
SP2 .958
SP3 .945
SP4 .937
SAT1 .929
SAT2 .838
SAT3 .855
SAT4 .927

The principal component method is used to obtain the rotated component matrix and the rotation
matrix was Varimax. The factor loadings were reported in table 4.4.The total items were 12 and in
total, the 3 factors were made. It is seen in the table that all the variables are loaded in their
relevant constructs.

Regression:

Model Summary
Std. Error of the
Model R R Square Adjusted R Square Estimate
1 .172a .029 -.012 1.34468

Coefficients
Standardized
Unstandardized Coefficients Coefficients

Model B Std. Error Beta T Sig.

1 (Constant) 2.599 .577 4.500 <.001

Customer Service -.024 .141 -.024 -.167 .868

Shipping .158 .134 .169 1.176 .246

a. Dependent Variable: Customer Satisfaction

H1:
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Customer service has a negative relationship with customer satisfaction (β = -.024 & t-value =
-.167, p > 0.05). Hence, there is insignificant relationship between Customer service and
Customer Satisfaction.

H2:
Shipping service has a negative relationship with customer satisfaction (β = .169 & t-value
=1.176, p > 0.05). Hence, there is insignificant relationship between Shipping and Customer
Satisfaction.

Conclusion:
It is seems from the above results that customer in Karachi are not satisfied from the shipping by
different companies. They might have issues related to on-time delivery & product safety.
Furthermore they are not entertained properly by customer services as these results shows.

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