A STUDY ON CUSTOMER ATTITUDE TOWARDS ONLINE SHOPPING

PRESENTED BY S.SANTHI

Abstract:

The technological development with respect to internet has given a new dimension to

marketing. Online customers are increasing and the virtual marketers realize the

importance of customer oriented approach. This online facility benefits the users to gain

in depth information about the product and to compare and evaluate the products offered

by various suppliers. To conduct an empirical investigation a survey was conducted to

collect data and was analyzed and interpreted using SPSS. A questionnaire was developed

based on the objective of the study. The factors facilitating online shopping were

measured on a five point Likert Scale. It was very clear from the study that security

was the main concern and the users also mentioned about the absence of physical

handling of the products in online shopping. At the same time many users felt that it

was very convenient and cost effective.

1.0 IntroductionOnline shopping has been growing because of the technological advancement,

convenience, better purchasing capacity and the availability of different search engines

and easier payment modes. The availability of the quality of the information, various

brands and products enable the customers to make a choice from a wider market.

Customers come across different types of risks in online shopping and they may not opt

for internet marketing.

With the advent of the internet , online shopping has gained immense popularity . The

ease and convenience of shopping from anywhere in the world without having a

physical visit to any shopping mall, has made online shopping or e-shopping an

indispensable facility for many people.

Internet marketing tools such as e-mail marketing, blogs, face book, twitter, MMS, SMS

and webisodes ( webisodes are created to enable the customers to visit the sites repeatedly

and thus converting them into brand loyal customers) make it easier for the marketers

to reach to their customers. They also combine the various marketing activities such as

advertising, online campaigns and other public relations to create product awareness.

In a constantly changing world of today, where past is replaced by dynamic present

and the dynamic present is replaced by more challenging future, the old ways of doing

things is no longer valid thus a new technology brings with it not only the potential for

success but also a good design , its value to its users, ultimate use and acceptability.

The current situation of shopping is changing due to globalization, technical innovations

and market saturation. The intensity of competition increases due to new products and

services as well as the entrance of competitors from other industries. The continuously

growing educational standards and the opportunity to gather information induce enormous

changes in customer behavior.

Consumer attitude towards e-shopping is s a new strategic marketing and the information

available influences customer attitude positively. The advent of web technology constitutes

a new medium of commerce which puts the customer in a position to directly and quickly

interact with the web services.

The empirical study will find whether online shopping will gain importance and its use

will accelerate at a faster rate in the coming years. Thus the study concludes that the

online shopping is more cost effective and less time consuming. The study also confirms

that there is a willingness and readiness on the part of the users to go ahead with such

technological sophistications or improvements. However in certain respects the users felt

online payments system lacks in security and it caters to the needs of the educated mass

and felt that it may not be of any use where the physical handling of the product

becomes important. A few users felt that shopping means a family affair and a few

felt that they enjoy their shopping with friends. In such cases e-shopping may not be

too interesting under certain field of marketing. This study covers the key areas related

to internet marketing and the customers attitude towards shopping using internet.

1.1 Literature Review

The researcher has made an attempt to present the reviews of available studies which consists of articles and other research papers in the related areas. The study revealed the customers’ perceptions and characteristics that influences customers attitudes toward online shopping. An earlier study conducted by Ghose (1998) predicted that the internet may be an important channel for marketing. Another study has revealed that the fear of security system in online shopping due to credit card fraud has been one of the major reasons for customers avoiding online shopping. (Ratnasingham 1998) .

A study by Palumbo and Herbig (1998) suggested that in coming years internet may offer cost effective and sophisticated tools for online advertising, sales promotion and placing orders and communicating with their customers all over the world. The study of Walters and Lancaster (1999) revealed that the internet offers direct links with customers and suppliers and facilitates transactions processes and information transfer at a faster pace. Jayawardhena and Foley (2000) identified that convenience, site design and financial security are the dominant factors in customers assessment of e-satisfaction.

A study by Torre and Moxon ( 2001), concluded that many companies have adopted internet for conducting business transactions and sharing business information with their customers. The study made by Thomas S.H. Teo (2001) revealed the linkage between the use variables such as age, gender,income, education and internet usage established the relationship of internet usage with respect to surfing , mailing, chatting and messaging. A study by Ranganatham and Ganapathy(2002) revealed that the safety, security and privacy of websites have a greater impact on the intention of the customers do go for online transactions. The most important reason for internet users to avoid online shopping is its security. Keen et al (2002) found that demographic factors such as age, gender, education and income has a significant effect on the attitude of the consumers towards online shopping and also revealed that educated internet users are more comfortable to go for online shopping.

Benedict et al 2004 found from their study that the need to touch, feel, smell or ability

to try a product influences customers decision whether or not to shop online. One of the

main reasons for which customers hesitate to shop online is that online shoppers are

unable to touch the real products in order to evaluate the quality.

Different types of online buyers have different evaluations of website design and website

reliability but similar perception of website security (Shegill and Chen 2005) . Nearly

70% of web users use internet for sending and receiving emails, surfing, chatting and

messaging . India was ranked fourth after US, China and Japan in terms of internet users

by Computer Industry Almanac in 2005. A study by Collier and Bienstock (2006 )

identified product delivery as an important factor that influences online customers

satisfaction and future purchase intention.

Online purchase intentions and influences of personal attitudes were similar for males

and females. (Yu-Bin Chiu, Chieu-Peng Lin Taiwan and Ling Lang Tang ) Customers

showed interest in products like cars, computers, mobiles apparel and also services such

as ticketing, health management and tourism management. Approximately 10 percent of

the world’s population use online shopping has been shown in Online Consumer Opinion

Survey of AC Neilsen. Ebay Pay Pal has been established as pay sources for various

online purchase that includes air , rail and movie tickets , electronic items and apparels

Taylor Nelson Sofres refers in the Third Annual Global E-commerce report that e-

shopping in India includes a variety of products such as books, apparels and electronic

items.

Factors including competitive cost, better customer service and other demographic

considerations have helped the marketing industry to soar to greater heights. The

development of information technology and the growth of the communication network has

opened new horizons in the world of marketing . This has enabled the customer to enter

into a new technological development called e-tailing. This e-shopping enables the

customer to benefit from the pool of information , product comparison, cost effectiveness

and various other offers from its suppliers and thus making a better choice of product.

Research Methodology

A pilot study was conducted among fifteen people consisting of neighbors, students

and colleagues to evaluate how well the questionnaire was framed and understood.

2.0 Sampling Design

The sample has been taken only from the IT industry and the education sector since they have the prior knowledge about internet browsing. A sample size of 240 was considered for the study.

Respondents were selected by purposive and convenience sampling method for the study.

The study uses exploratory research design and analyses the primary data to show

customer attitude towards online shopping

The primary data has been collected through a self administered and structured

questionnaire. Questionnaires were given to different age group of people ranging

between the age group of 25 to 50. The questions were framed in view of the main

factors like Security, Reliability, Quality and Loyalty. The variables were measured

against a five point Likert scale.

Following the literature review Questionnaires were developed based on the literature to

determine the behavioral pattern while purchasing online. The questions were designed

and presented in two different parts.

Part I comprised of the respondents’ personal background such as age, gender,

educational qualification , occupation and income per month.

Part II enabled the respondents to furnish the factors that influenced them to buy the

product online .

The questionnaire was developed based on the observations of the researcher, review of

the literature and consultations with the people on the same area of interest. The variables

used in the study is also based on the review of the literature and the researches done

by other researchers.

The research objectives of the study

To analyze the customer behavior pattern in on line shopping

To understand the relevance of online shopping for retail products and services.

To understand the views of the respondents about the retail and service industry

2.1 Statistical Analytics

Data in this study were analyzed using Statistical Package for Social Sciences (Version

19.0) and Amos (Version 19). Factor analysis is used to identify the load variables to the

factors such as Security, Reliability, Quality and Loyalty. Further these factors are analyzed

to identify the inter relationship among the factor using the path analysis.

2.2 Data Analysis

Frequency table of demographic profiles

Table – 1 AGE

Age Group Male Female25 - 30 48 3830 - 35 39 3035 - 40 32 1740 – 45 19 0845 - 50 06 03Total 144 96

Table -2 EDUCATIONAL QUALIFICATION

Education Male FemaleUG 73 42PG 41 24PROFESSIONALS 21 16RESEARCH ERS 09 14TOTAL 144 96

TABLE -3 HOUSEHOLD INCOME PER MONTH

Income Male Female

Less than 10,000 24 16

10,001 – 20,000 42 37

20,001 – 30,000 48 25

30,001 – 40,000 18 13

40,001 & above 12 05

Total 144 96

Table -4 FREQUENCY OF USERS

Frequency of users Male FemaleDaily 37 28Alternate days 51 34Once in a week 38 23Occasionally 18 11TOTAL 144 96

Table -5 ONLINE SHOPPING EXPERIENCE AND SATISFACTION

Satisfied with online shopping Male Female

Yes 102 58

No 42 38

Total 144 96

From the Tables 1 – 5 the following inferences were observed.

Out of the 240 respondents men accounted for 60% and women accounted for 40% of

the total respondents . Out of the 240 respondents the age group between 25 – 30 years

represents 36% of the respondents and the age group between 30 - 35 represents 28% of

the total respondents

Out of 240 respondents, household income per month of Rs 10,001 - Rs 20,000 represent

33% of the respondents and income of Rs20,001 – 30,000 represents 30.4% of the total

respondents . Out of 240 respondents holding Post graduate and above degrees represents

52% of the respondents and professional degree holders represent 15% and researcher

scholars include 9% of the total respondents.

Around 87.5% of the males use online services at least once a week while 88% of the females are online service once a weeks. About 71% males experienced satisfaction in online shopping while 60% females experienced satisfaction in online shopping.

Hypothesis testing: The following are the findings of the hypothesis testing using chi-

square through SPSS.

Result 1: There is association between age and online shopping

Result 2: There is association between monthly family income and online shopping

Result 3: There is association between frequency of internet use and online shopping

Result 4: Educational qualification and online shopping are related

Around 82 % of the respondents felt that internet shopping was available 24x7 and it could be done from any place. They also expressed the convenience of home delivery at a cheaper price. A few respondents felt t hat it enabled them to engage themselves in other activities while shopping since extensive information was available online in different fields. However around 78% respondents felt t hat the payment gateway is not secure and they were under constant insecurity of their credit card information being hacked. They also said that it lacks the physical touch of the product and thus they were unable to judge the quality of the product. A few respondents felt that the absence of social interaction made online shopping a less interesting way of shopping. A few elders felt that they didn’t have a credit card to use the internet shopping.

One should accept the fact that though e- shopping is slowly increasing in India it

doesn’t keep pace with the increase in global marketing. Many Indian customers do not

use internet market due to their fear factor and the apprehension about the quality of

the goods that they may receive. With increase of the secured payment gateways and

the use of SSL ( Secure Socket Layers) which enables a safe transfer of private

documents via internet may allow the e-marketing industry to flourish in the coming

years.

2.3 Factor Analysis

The following table shows the various variables that were considered in the study. Table - 6

Q1 I trust the brand of the product

Q2 Novelty and innovation in the product

Q3 Delivery of the product is shipped to a wrong destination

Q4 My credit or debit card information can be misused

Q5 Product delivered on time

Q6 Shipping cost and FOB are clear

Q7 On line transaction is interrupted due to virus transmission

Q8 Product quality cannot be judged without physical touch

Q9 Extensive information about the product

Q10 Payment process is not safe

Q11 After sales services are not maintained

Q12 Goods delivered in good condition

Q13 Online customer satisfaction

Q14 Product packaging

Q15 Lack of knowledge about the stock in hand

Q16 Wider range of product line

Q17 Duplication of transaction due to network failures

Q18 Home delivery

Q19 Price list and discount offer are clear

Q20 Availability 24x7

Table -7KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .837

Bartlett's Test of Sphericity

Approx. Chi-Square

3709.515

df 190Sig. .000

The KMO measure of sampling shows that 84% infers that the sampling procedure is good and this leads to factor analysis.

Table 8Extraction Method – Principal Component Analysis

Q2 1 0.894964Q1 1 0.883193Q10 1 0.826436Q13 1 0.813798Q12 1 0.807486Q14 1 0.798794Q18 1 0.788084Q19 1 0.766677Q9 1 0.751079Q11 1 0.74923Q16 1 0.726154Q17 1 0.69611Q8 1 0.670899Q15 1 0.657976Q5 1 0.649796Q20 1 0.573682Q4 1 0.560741Q6 1 0.478726Q3 1 0.439737Q7 1 0.434629

Scree Plot

Component Number

2019181716151413121110987654321

Eig

en

valu

e

10

8

6

4

2

0

From the scree plot we confirm that the four factors Security (F1), Reliability (F2), Quality (F3), Loyalty (F4) can be formed.

Table - 9

Table - 10

Component1 2 3 4

Q11 .772 Q8 .755 Q12 .753 Q5 .744 Q17 .685 Q10 .666 Q4 .661 Q7 .656 Q15 .639 Q3 .607 Q6 .830 Q20 .787 Q9 .779 Q16 .582 Q19 .568 Q13 .876 Q18 .814 Q14 .789 Q2 .930Q1 .924

Rotated Component Matrix(a)

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.a Rotation converged in 8 iterations.

Table -11Transformation Matrix

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.

Path Analysis diagram is drawn and from the diagram it indicates that the variables are factored as follws.

Component 1 2 3 41 .795 .494 .342 .0852 -.420 .404 .198 .7893 -.097 -.450 .887 -.0444 .427 -.625 -.241 .608

This diagram shows that in Factor 1 Security the following variables are identified.

Q17 Duplication of transaction due to network failures

Q10 Payment process is not safe

Q4 My credit or debit card information can be misused

Q7 On line transaction is interrupted due to virus transmission

Q15 Lack of knowledge about the stock in hand

Q3 Delivery of the product is shipped to a wrong destination

Q11 After sales services are not maintained

Q8 Product quality cannot be judged without physical touch

Q12 Goods delivered in good condition

Q5 Product delivered on time

The following variables are identified by Factor2

Q16 Wider range of product line

Q19 Price list and discount offer are clear

Q6 Shipping cost and FOB are clear

Q20 Availability 24x7

Q9 Extensive information about the product

The following variables are identified by Factor 3

Q13 Online customer satisfaction

Q14 Product packaging

Q18 Home delivery

The following variables are identified by Factor 4

Q1 I trust the brand of the product

Q2 Novelty and innovation in the product

Scope for further Research and Suggestion

Several types of viral marketing can be studied with relevance to viral marketing for retail

products in India.

This study is restricted to Chennai and it can be further extended to other metropolitan

cities as a comparative study for future research.

Conclusion

The study revealed that the customer were more willing to use internet for the services

rather than the products. Most of them were content with rail booking through online

however a few felt that booking air tickets were little more expensive since the travel

agents were able to give better competitive ticket fare.

The study also revealed that internet is less time consuming and more cost effective.

Many were of the opinion that while travelling to new places they were very

comfortable to find the details of places, accommodation and food. They were also able to

make a better choice by comparison the prices offered and the kind of the service

provided. Even though in many hospitals online booking was available many felt that it

was easier to call and fix up and appointment rather than doing it thro online. However

they felt that many foreigners take up the treatment by using the internet. People were

also keen on placing orders for health care products like Amway. Another factor that

influenced the buyers was the physical touch of the product.

Though there may be a larger range of products to select from, the n on disclosure of all the

information about the product may pose a threat to the web users. Moreover the browsing

speed, connectivity , power shut down and other technical problem may further crb the

growth of internet marketing.

The most important factor that prevents the growth of the online marketing is the safety

and security . The fear of their debit/credit card being misused and the lack of

information posted in their respective web sites post a major threat for the customers. A The

online transactions doesn’t allow for a social network or a pleasant family outing and in

practice the expectations of the customers is to shop with friends and family and such

an expectation may not be fulfilled in online shopping.

Suggestions

Brands should monitor the cyberspace for unauthorized use of their brand names. The

companies should have policies and procedures that enable them to remove the web sites

that violate the copyright laws. They should also educate their customers about the risks of

buying from unauthorized sources and should have a consortium to report suspicious goods

and sellers.

Acknowledgement

I take this opportunity to thank my guide Dr.(Mrs.) Marlene Morais, Principal Gurunanak

college for her valuable guidance and support

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