A Study On Customer Attitude Towards Online Shopping

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.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 advertis ing, 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by dynamic present and the dynamic present is replaced by more challenging future, the old ways of doing things is no longer valid thus a new technology brings with it not only the potential for success but also a good design , its value to its users, ultimate use and acceptability.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 market ing and the customers attitude towards shopping using internet.Literature ReviewThe 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 offer s 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. K een 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 se rvice 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 MethodologyA pilot study was conducted among fifteen people consisting of neighbors, students and colleagues to evaluate how well the questionnaire was framed and understood.Sampling DesignThe 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 met hod for the study. The study uses exploratory research design and analyses the primary data to show customer attitude towards online shoppingThe 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 studyTo 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 industryStatistical AnalyticsData 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.Data Analysis Frequency table of demographic profiles Table – 1 AGE Age GroupMale Female 25 – 3 04838 30 – 353930 35 – 403217 40 – 451908 45 – 500603 Total14496Table -2 EDUCATIONAL QUALIFICATION EducationMale Female UG7342 PG4124 PROFESSIONALS2116 RESEARCH ERS0914 TOTAL14496Table -3 HOUSEHOLD INCOME PER MONTH IncomeMale Female Less than 10,0002416 10,001 – 20,0004237 20,001 – 30,0004825 30,001 – 40,0001813 40,001 & above1205 Total14496Table -4 FREQUENCY OF USERS Frequency of usersMale Female Daily3728 Alternate days5134 Once in a week3823 Occasionally1811 TOTAL14496Table -5 ONLINE SHOPPING EXPERIENCE AND SATISFACTION Satisfied with online shoppingMaleFemale Yes10258 No 4238 Total14496From 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  re spondents 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 shoppingResult 2: There is association between monthly family income and online shoppingResult 3: There is association between frequency of internet use and online shoppingResul t 4: Educational qualification and online shopping are relatedAround 82 % of the respondents felt that internet shopping was available 24Ãâ€"7 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 AnalysisThe following table shows the various variables that were considered in the study. Table – 6Q1I trust the brand of the product Q2Novelty and innovation in the product Q3Delivery of the product is shipped to a wrong destination Q4My credit or debit card information can be misused Q5Product delivered on time Q6Shipping cost and FOB are clear Q7On line transaction is interrupted due to virus transmission Q8Product quality cannot be judged without physical touch Q9Extensive information about the product Q10Payment process is not safe Q11After sales services are not maintained Q12Goods delivered in good condition Q13Online customer satisfaction Q14Product packaging Q15Lack of knowledge about the stock in hand Q16Wider range of product line Q17Duplication of transaction due to network failures Q18Home delivery Q19Price list and discount offer are clear Q20Availability 24Ãâ€"7Table -7 KMO and Bartlett's TestKaiser-Meyer-Olkin Measure of Sampling Adequacy..837 Bartlett's Test of SphericityApprox. Chi-Square3709.515 df190 Sig..000The KMO measure of sampling shows that 84% infers that the sampling procedure is good and this leads to factor analysis.Table 8 Extraction Method – Principal Component AnalysisQ210.894964 Q110.883193 Q1010.826436 Q1310.813798 Q1210.807486 Q1410.798794 Q1810.788084 Q1910.766677 Q910.751079 Q1110.74923 Q1610.726154 Q1710.69611 Q810.670899 Q1510.657976 Q510.649796 Q2010.573682 Q410.560741 Q610.478726 Q310.439737 Q710.434629From the scree plot we confirm that the four factors S ecurity (F1), Reliability (F2), Quality (F3), Loyalty (F4) can be formed.Table – 9Component 1234 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 .930 Q1 .924 Table – 10Rotated Component Matrix(a)Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a Rotation converged in 8 iterations.Table -11 Transformation MatrixComponent1234 1.795.494.342.085 2-.420.404.198.789 3-.097-.450.887-.044 4.427-.625-.241.608 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.This diagram shows that in Factor 1 Security the following variables are identified. Q17Duplication of transaction due to network failures Q10Payment process is not safe Q4My credit or debit card information can be misus ed Q7On line transaction is interrupted due to virus transmission Q15Lack of knowledge about the stock in hand Q3Delivery of the product is shipped to a wrong destination Q11After sales services are not maintained Q8Product quality cannot be judged without physical touch Q12Goods delivered in good condition Q5Product delivered on timeThe following variables are identified by Factor2Q16Wider range of product line Q19Price list and discount offer are clear Q6Shipping cost and FOB are clear Q20Availability 24Ãâ€"7 Q9Extensive information about the productThe following variables are identified by Factor 3Q13Online customer satisfaction Q14Product packaging Q18Home deliveryThe following variables are identified by Factor 4Q1I trust the brand of the product Q2Novelty and innovation in the productScope 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 i t can be further extended to other metropolitan cities as a comparative study for future research.ConclusionThe 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 t he 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.SuggestionsBrands should mo nitor 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.