A Study of Consumer Behavior Patterns in On-line Shopping

Thesis Submitted By Richa Malik

Under the supervision of Dr. (Mrs.) Sudesh Professor, University school of management, Kurukshetra.

Roadmap to Presentation

Introduction

Research objectives
Research methodology Data analysis and interpretation Discussion and Conclusions

Introduction

On-line shopping is the process consumers go through to

purchase products or services over the Internet.

Online shopping behaviour (Internet shopping or buying behaviour) refers to the process of purchasing products or

services via the Internet. The process consists of five

steps similar to those associated with traditional shopping behaviour (Liang and Lai 2000).

Objectives of the study

Objectives of the study

1. To identify the variables influencing behaviour of consumers towards on-line shopping
2. To identify the factors influencing behaviour of consumers towards on-line shopping 3. To study the impact of identified variables under each category of factors on the on-line shopping

4. To study the impact of factors identified on the on-line shopping

5. To develop a comprehensive model that incorporates all the relevant variables and factors and their impact on online shopping

Research methodology

Research design

Exploratory - Review of existing literature - In-depth interview Descriptive -Questionnaires

Data collection methods

Primary sources - In-depth interviews - Questionnaires

Secondary sources - Literature review

SAMPLING DESIGN

Sample size for In-depth interview - 41 Questionnaire - 598. Final questionnaire was pilot-tested on a sample of 35 to ensure the validity of the survey instrument. However, post elimination of incomplete responses, unreturned questionnaire and invalid answers, the final sample size used for analysis was 580.

Sampling Technique

In the present study non-probabilistic sampling technique was used. Judgmental and snowball sampling technique were used in respondent selection for in-depth interviews and questionnaire.
Initial set of respondents was selected on the basis of judgemental sampling. Subsequently additional units were obtained on the basis of information given by initial sample units and then further referrals were taken from those selected in the sample. In this way sample was grown by adding more and more referral-based respondents until it reached the limiting number (150/city).

CONTD

In the present study Judgement sampling was based on the following parameters: The sample comprised of people who have done online shopping Only those people having credit cards were part of the sample The sample comprised of people whose minimum qualification was at least Graduation The sample was taken from metropolitan cities assuming high internet diffusion rate

QUESTIONNAIRE DESIGN

The questionnaire design was mainly based on the review of literature and the results of in-depth interviews and pilot study.

The questionnaire was further checked for the convergent and discriminant validity and reliability.

Data analysis techniques

Factor analysis One way ANOVA Correlation Multiple regressions

Data analysis and Interpretation

Categories Of Factors And Variables Under Each Factor Category Identified From Exploratory Study
S#
1

Category of factor
Demographic factor

Variables under factor category

Age, Gender, marital status, income/salary, family size, education, ability to use internet Psychographics factor Innovative, enjoyment, convenience, interaction with people, touch and feel Online shopping Promotion, delivery policy, product feature and policies return policy, detailed information of product, option of comparison, Technological factor Security factor Quality, representative product, value for money Safety, privacy ness of

4 5

Analysis And Interpretation For Descriptive Phase

LIST OF CATEGORIES SHOPPED ONLINE

S# 1 2 3 4 5

Category Airline/train reservations Banking & other financial services Books/Magazines/membershi p of library, news dailies Software/Hardware/DVD/CD Dresses/Apparels/ Footwear/Jewellery

Percentage 81% 63% 33% 16% 3%

Electronics/Mobile phones

30%

Consumers Response Variations For Online Shopping Across Gender

HYPOTHESIS
NO.

OUTPUT
VARIABLE

MEAN VALUE
Male Female (N=249) 3.75 3.5 2.25 2.5

Mean Value (Total)

ANOVA RESULT
F (Sig.)

H3.2.1
H3.2.2 H3.2.3 H3.2.4

H3.2.5

Satisfaction with online shopping Future purchase on Internet shopping Frequency of online shopping Number of items purchased on Internet shopping Overall spend on Internet shopping

(N=331) 3.71 3.8 1.43 2.43

3.72
3.67 1.78 2.46

.007 (.936)
.759 (.397) 3.3 (.08) .020 (.888)

2.57

3.5

2.97

1.411 (.252)

Consumers Response Variations For Online Shopping Across Different Family Sizes

HYPO THESIS NO.

OUTPUT VARIABLE

H3.5.1 H3.5.2 H3.5.3 H3.5.4

H3.5.5

Satisfaction with online shopping Future purchase on Internet shopping Frequency of online shopping Number of items purchased on Internet shopping Overall spend on Internet shopping

MEAN VALUE Nuclear Family Extended family with two Family (N=193) children (N=130) (N=257) 3.66 3.62 4
3.66 1.5 2 3.75 1.375 2.75 3.75 2.25 2.5

Mean Total

ANOVA RESULT F (Significance)

.328 (.725) .037 (.963) 1.595 (.236) 1.389 (.280)

3.72 3.72 1.61 2.44

1.83

3.5

2.75

2.77

3.030 (.078)

Relationship Between Online Shopping Variables And Enjoyment As One Of The Variables Of Psychographics Factor
Hypothesis
No. H1.2.1 H1.2.2

Output variable
Satisfaction with online shopping

Correlation coefficient
.284

Significance
.253 .884

Hypothesis testing results

Hypothesis rejected Hypothesis rejected Hypothesis rejected Hypothesis rejected

H1.2.3 H1.2.4

Future purchase .037 on Internet shopping Frequency of .126 online shopping Number of items .140 purchased on Internet shopping

.619 .580

H1.2.5

Overall spend on Internet shopping

.508

.031

Hypothesis not rejected

Relationship Between Online Shopping Variables And Convenience As One Of The Variables Of Psychographics Factor
Hypothesis No. H1.3.1 H1.3.2 Output variable Satisfaction with online shopping Correlation coefficient .058 Significance .818 .502 Hypothesis testing results Hypothesis rejected Hypothesis rejected

Future purchase on .169 Internet shopping

H1.3.3
H1.3.4

Frequency of .192 online shopping Number of items .598 purchased on Internet shopping
Overall spend on Internet shopping .110

.445
.009

Hypothesis rejected Hypothesis not rejected

H1.3.5

.663

Hypothesis rejected

Relationship Between Online Shopping Variables And Interaction With Others As One Of The Variables Of Psychographics Factor
Hypothesis No. H1.4.1 Output variable Correlation coefficient Satisfaction with -.161 online shopping Significance Hypothesis testing results

.525

Hypothesis rejected

H1.4.2

H1.4.3 H1.4.4

H1.4.5

Future purchase on Internet shopping Frequency of online shopping Number of items purchased on Internet shopping Overall spend on net shopping

-.026

.920

Hypothesis rejected

.100 -.468

.692 .050

Hypothesis rejected Hypothesis not rejected

-.350

.154

Hypothesis rejected

Relationship Between Online Shopping Variables And Touch And Feel As One Of The Variables Of Psychographics Factor
Hypothesis Output variable Correlation coefficient Significance .069 .047 Hypothesis testing results Hypothesis not rejected Hypothesis not rejected Hypothesis rejected Hypothesis rejected Hypothesis not rejected

No. H1.5.1
H1.5.2

Satisfaction with -.437 online shopping Future purchase on Internet shopping Frequency of online shopping Number of items purchased on Internet shopping Overall spend on net shopping -.474

H1.5.3 H1.5.4

-.077 -.110

.760 .664

H1.5.5

-.431

.074

Relationship Between Online Shopping Variables And Comparability Of Product As One Of The Variables Of Online Shopping Features
Hypothesis No. H2.5.1 H2.5.2 Output variable Correlation coefficient Significance .085 .518 Hypothesis testing results Hypothesis not rejected Hypothesis rejected

Satisfaction with .417 online shopping Future purchase on Internet shopping Frequency of online shopping Number of items purchased on Internet shopping Overall spend on net shopping .163

H2.5.3
H2.5.4

-.225
-.038

.369
.881

Hypothesis rejected Hypothesis rejected

Hypothesis rejected

H2.5.5

.169

.502

Relationship Between Online Shopping Variables And Quality Of Product As One Of The Variables Of Technological Factor
Hypothesis No. H4.1.1 H4.1.2 Output variable Satisfaction with online shopping Future purchase on Internet shopping Frequency of online shopping Number of items purchased on Internet shopping Overall spend on Internet shopping Correlation coefficient .484 .422 Significance .042 .081 Hypothesis testing results Hypothesis not rejected Hypothesis not rejected Hypothesis rejected Hypothesis rejected Hypothesis rejected

H4.1.3

.285

.251

H4.1.4

-.283

.254

H4.1.5

.348

.158

Relationship Between Online Shopping Variables And Representative ness Of Pictures And Colours As One Of The Variables Of Technological Factor
Hypothesis
No. H4.2.1 H4.2.2

Output variable Correlation coefficient

Satisfaction with .218 online shopping Future purchase on Internet shopping Frequency of online shopping Number of items purchased on Internet shopping Overall spend on Internet shopping .285

Significance
.385 .251

Hypothesis testing results

Hypothesis rejected Hypothesis rejected Hypothesis rejected Hypothesis not rejected

H4.2.3 H4.2.4

.028 .504

.914 .033

H4.2.5

.208

.407

Hypothesis rejected

Relationship Between Online Shopping Variables And Security As One Of The Variables Of Safety Factor
Hypothesis No. Output variable Correlation coefficient Significance Hypothesis testing results

H5.1.1
H5.1.2

Satisfaction with .606 online shopping

Future purchase .215 on Internet shopping Frequency of .129 online shopping Number of items -.161 purchased on Internet shopping Overall spend on .006 Internet shopping

.008
.392

Hypothesis not rejected

Hypothesis rejected Hypothesis rejected Hypothesis rejected Hypothesis rejected

H5.1.3 H5.1.4

.609 .523

H5.1.5

.982

Relationship Between Online Shopping Variables And Privacy As One Of The Variables Of Safety Factor
Hypothesis Output variable Correlation coefficient Significance .008 .392 Hypothesis testing results Hypothesis not rejected Hypothesis rejected Hypothesis rejected Hypothesis rejected Hypothesis rejected

No. H5.2.1
H5.2.2

Satisfaction with .606 online shopping Future purchase .215 on Internet shopping Frequency of .129 online shopping Number of items -.161 purchased on Internet shopping Overall spend on .006 Internet shopping

H5.2.3 H5.2.4

.609 .523

H5.2.5

.982

Analysis Results
Dependent variable Customer satisfaction with online shopping Independent variable a) Security b) Quality c) Touch and feel factor d) Option of comparison e) Privacy a) Customer satisfaction b) Quality c) Touch and feel factor None Direction/relation Positive Positive Negative Positive Positive Positive Positive Negative ---------

Future online purchase

Frequency of online purchase Number of Products/Items purchased

a) Convenience Positive b) Representative of pictures Positive and colours Negative c) Interaction with people a) Enjoyment b) Touch and feel factor Positive Negative

Total Spend on online purchase

Results Of Regression Analysis

Dependent variable Independent variable Beta value (Significance) Customer satisfaction a) Security with online shopping b) Touch and feel factor Future online purchase Frequency of online purchase Quantity of products/Items purchased a) Customer satisfaction .646(.001) -.490(.009) .764(.000)

R2 .606

.584

-----a) Convenience b) Representative of pictures and colours c) Interaction with people --------

-----.577(.012) -.331(.139) -.137(.532)

------.454

Total Spend on online purchase

--------

--------

Comprehensive model
Safety Factor Security Customer satisfaction with online shopping

Psychographic Factor Touch and feel factor Interaction with people Convenience Future online purchase

Technological Factor Representative of quality

Number of items purchased in online shopping

Final model
If we assume all the output variables to be converging into one broad factor of online shopping, the final model could be interpreted as following:

Security

Touch and feel factor

Convenience

Online Shopping

Representative of pictures and colors

Interaction with people

PRACTICAL/ MANAGERIAL IMPLICATIONS

Online retailers should focus on better positioning and representation of their products in online shopping. Websites/e-tailors should also ensure that all the relevant details regarding the quality and features should be provided to the online shoppers on the website. Customer shop through online shopping because of time and effort saving, hence the online retailers should design their website in such a way that the customers can reach out to his/her desired product in the minimum time.

To save time and effort of the customers the online retailers should also give an option to the customers to store and compare their choices before the actual purchase.

Continued

Online website should pay more attention to the female segments as results prove that females shop more in online shopping as compared to men. So companies should devise the policies and strategies to attract more number of people in this segment in future also. Online website need to ensure that security and privacy policies are appropriately defined, implemented, and communicated to the relevant stakeholder. Online shopping companies could also look into the possibility of spreading and promoting security and privacy related information on the Internet. Delivery policy of the online product should also include a defined trial period to assure that the customer doesnt miss the touch and feel experience. Online retailers should also look into the possibility of running call centres which could ensure that the customer get a chance to formally interact with the other party before the actual purchase.

THEORETICAL IMPLICATIONS

The study fills the literature gap between the past studies and present research by building a comprehensive model for online shopping. The study defines measurement parameters for online shopping. This is a unique study as it studied actual as well as post-purchase behaviour of the online shoppers. This is one of the initial studies done on online shopping in India as the concept of online shopping is quite new in India and none of the studies on online shopping are done so far on such a large scale in India. This is one of the important studies on online shopping in Indian context because it has included people from diverse backgrounds from different cities in India. It includes the random sample of individuals from major cities of India, which are representatives of whole population of India. This study finds unanimity amongst diversity by including people of different age groups falling under different income segments with difference in attitude and buying behaviour.

LIMITATIONS

The study has few limitations like few Indian studies were available in Indian context so literature review pertains to foreign countries. Data has been collected from metro cities assuming high internet diffusion rate. And small cities and rural areas were not a part of sample. A cross-sectional study was done on the selected sample. Therefore results need to be tested over the time to check whether the same variables affect the online shopping in future or not. Judgemental sampling was used in the study. Therefore care must be taken while projecting the results of the study. Time and resources were also one of the limiting factors.

Questionnaire technique was used. some hidden behavioural perspectives remained untouched and unnoticed in that case.

FUTURE RESEARCH DIRECTIONS

Replication in Other Settings (Generalization) Need to Study Other Types of online shopping Need to Study Other Concepts and Relationships