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Advances In Management

Case Study:

•Vol. 4 (1) Jan. (201

Preferences towards Online Shopping among Urban Populationwith special reference to Chennai City

Magesh R.

Depar tment of Management Studies, Anna Universi ty, Chennai-25 (T.N.) , INDIA

rajamagesh65@gmail .com

Abstract

Online shopping is an important aspect of the

retail industry at this new era. The online medium, a

hybrid of multiple communication technologies, offers a

multitude of communication functions, including

marketing. As a marketing communication channel, the

Internet has attracted nearly one-third of its users to try

online shopping during the decade when it became

commercialized. This study is to identify the factors that

influence the consumers (with special reference to

Chennai city) to go for online shopping than the retail

shopping. Results indicate that convenience, income,

age range, product type, influence consumer intention

to engage in online shopping. When consumers perceive

offline shopping as inconvenient, their intention to shop

online is greater.

The attitudes towards online shopping and

intention to shop online are not only affected by ease of

use, usefulness and enjoyment, but also by exogenous

factors like saving time, comparison shopping, product

characteristics, previous online shopping experiences,

easy to access and trust in online shopping. The Chi-square test was used to determine the relationship.

Keyword: On-line shopping, perception, browsing, urban

population.

Introduction

Shopping online offers lots of benefits that onewill

not find shopping in a store or by mail. The Internet is always

open — seven days a week, 24 hours a day — and bargains

can be numerous online. With a click of a mouse, one can

buy an airline ticket, book a hotel, send flowçrs to a friend or

purchase favorite fashions. But sizing up your finds on the

Internet is a little different from checking out items at themall. Recent surveys have found that the number of people

who shop online around the globe is increasing dramatically.

The internet is like a gigantic shopping mall and all

of us can be a part of it. Many consumers now a days like to

shop online, because it is cheaper, easier and faster. People do

not have to queue anymore at the store to pay for their items.

There are no long lines, no crowded aisles, no traffic and

people do not have to look for a parking space to go to store

anymore. With internet, one can browse the site at your

leisure, which is important for busy people. There are three

phases that people go through when they end up buying

purchase online.

In phase 1, people would just go on the internet

find general information about the product that they a

searching for, where they just browse to find the gene

information about features, details, uses of the product th

they want to buy and see what brand names are out there f

it. In phase 2, once they have all of their information abo

the different features of the brands, they will compare t

details from brand to brand or from model to model of tproduct that they are thinking about buying. Phase 3 is call

the buying phase. It is where they actually make the purcha

online.

Shopping online is fast and easy. Once the items

services have been chosen and placed in a virtual shoppi

cart, the customer proceeds to checkout, just like at a ret

store. Most sites areeasy to use as items areclearly display

with accurate descriptions. It should be like that. Mo

shopping sites also have the merchandise divided in

categories, so the consumer can focus on what they a

looking for. By clicking on an item, one can get a close-

view and a more detailed description. The customer can alcheck their order status or history through their order stat

and make returns if necessary.

After one has finished shopping, the merchandi

should arrive in a couple of days when promised from thes

one purchased. Express shipping, at extra cost to t

customer, is attractive to last minute shoppers. Along wi

gift wrap and gift cards together with the merchandise al

seem to be an important element for consumers. These ext

conveniences enhance theonline shopping experience. A s

can also keep track of a specific shopper's sales history a

send out the infamous newsletter type to promote their ne

items available on their store and also to keep remindi

them about their existence.

Online shopping is worthwhile to everyone. T

seller enjoys extra opportunities for sales. The customers c

browse the site at their leisure. A dynamic and convenie

shopping site should be a popular and ultimate destination f

online shoppers.

Advantages ofOnline Shopping

Internet has made our lives easier in more than o

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Advances In Management

ways and has touched our routine life as well. If we analyze

why people prefer buying products through online as

compared to shopp ing from a traditional store, there are many

advantages of online shopping:

• One can save time in terms of traveling to a shop or

supermarket, circling the parking lot, looking for

parking, standing in queue at the billing counter, loadingthe products and traveling back home.

• One can spend less time if they buy products online

rather than visiting a nearby store because they are less

likely to be side tracked and end up buying more than

what they planned.

• If one lives on the top fioor of building, he/she needs to

carry the bags up and down a fiight of stairs or elevators.

Door-to-door delivery and online delivery would be

better and it will take care of this problem for you.

• One can do this event in short time. So whether he/she

has a busy day due to the regular schedule, job, school,kids, etc. that prohibits from visiting the shop, one can

also choose to purchase product online.

• One can shop anytime and anything one wants at own

convenience, 24 hours a day and 7 days a week. Even

•anyone can easily search any items using properly

defined categories for each product on site. There are

many online,shopping sites offering different variety of

products.

Need for the Study

More Internet users now turn to the online channel

to perform work-related tasks and to make biiline transactionsthan ever before. A visit to a conventional retail store requires

travel and must take place during business hours. Searching

or browsing an online catalog can be faster than browsing the

aisles of a physical store. Some consumers prefer interacting

with people rather than computers (and vice versa),

sometimes because they find computers hard to use.

The current market trend offers promising and

profitable online marketing opportunities. The Internet has

developed into a new distribution channel and online'

transactions are rapidly increasing. Despite the increasing

number of Internet users in Chennai and the products that are

being offered on the web, there is relatively little work thatspecifically examines the internet usage and online shopping

preferences of the consumers. This has created a need to

understand how the consumer perceives online purchases.

Review of Literature

Electronic commerce and online shopping continue

to grow as consumers' channel of choice for products and

services. Yet, Sarv Devaraj et al* in their study have

mentioned that persistent issues of security, availability and

personalization inhibit its full potential. Using a structure-

;:rr:3Vol. 4(1) Jan, (2011)

conduct-outcome (SCO) framework, their study analyzed the

economic aspects of consumer transaction through incurred

costs and the social aspects through patterns of behavior.

The results from the structural equation modeling

analysis indicate that asset specificity and uncertainty

structure variables of the electronic marketplace are

associated with the conduct constructs such as timeresponsiveness, personalization, website design and security

and reliability of the online channel. Further, time

responsiveness; personalization, security and reliability are

also significantly related to the consumer satisfaction

outcome with the channel. They do not find support for

website design being related to online consumers'

satisfacfion. Finally, there is evidence that satisfaction

derived from the above cotiduct variables is strongly related

to the consumers' preference for the online channel.

Searching product inforniation and buying goods

online are becoming increasingly popular activities, which

would seem likely to affect shopping trips. Farag et al' in

their study have said that little empirical evidence about the

relationships between e-shopping and in-store shopping is

available. The aim of study is to describe how the frequencies

of online searching, online buying and non-daily shopping

trips relate to each other and how customers are infiuenced by

such factors as attitudes, behaviour and land use features.

The results showed that searching online positively

affects the frequency o f .shopp ing trip s, which in its turn

positively influences buying online. An indirect positive

effect of time-pressure on online buying was identified by

them and an indirect negative effect of online searching on

shopping duration. These findings suggest that for some

people, e-shopping could be task-oriented (a time-saving

strategy) and leisure-oriented for others. Urban residents shop

online more often than suburban residents because they tend

to have a faster Internet connection. The more shopping

opportunities one can reach within 10 min by bicycle, the less

often one searches online. , • •.•

The results showed that predictors from all four

categories are retained in the final (best subset) solution

indicating that click stream behaviour is important when

determining the tendency to buy. This clearly indicated the

contribution in predictive power of variables that were neverused before in online purchasing studies. Detailed click

stream variables are the most important ones in classifying

customers according to their online purchase behaviour.

Kenneth K. Boyer et al' in their study presented an

analysis of the growing market for groceries and other

foodstuffs ordered via the internet or telephone for delivery to

the customer's home. They said that this industry has been

growing for the past 5 years at greater than 25% per year

vvhile the overall mark et for foodstuffs has been largely

stagnant.

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The research utilized data from surveys of over 2100

customers of flve different home delivery grocers. The

analysis utilized two group variables (customer experience

level and order picking method) and flve primary constructs

(service quality, product quality, product freshness, time-

savings and behavioral intentions).

The results indicated that customer perceptions ofthe primary constructs generally improve as they gain

experience with this new method of ordering and receiving

groceries. This study derived that operational choice of

picking method has shown to have a large impact on

customer perceptions—in particular, more experienced

customers generally rate the primary constructs higher for

distribution center (DC)-based pickiiVg than for store-based

picking. Their study suggested that' a DC-based picking

strategy is viable if grocers .can re-shape customer

perceptions and master the numerous intricacies of the supply

chain. ;

Web sites are very important and companies canattract customers by promoting various features of the web

site. Tang Qian' has presented an arialysis on the impact of

Web Site Eunctions, He presented an analysis of the

relationship betwee n web site ; functions and flrm

performance, A research model based on the DeLone and

McLean (D&M) model and customer service life cycle

(CSLC) theory was used to investigate the impact of web site

functions on e-business success. In this, the research model

considered web site functions, web site use, customer

satisfaction and flrm performance. According to the CSLC

theory, there are three stages in a customer service life cycle.

Therefore, the web site functions•

are divided into threestages: requirements, acquisition • and ownership, :The

functions in each stage serve to encourage usage and thus

enhance customer satisfaction and flrni performance.

The theoretical model and hypotheses were tested

using data collected from 72 wholesale and retail flrms in

China using the partial least squares (PLS) method. The

results suggest that web site functions in the acquisition stage

have the strongest impact on web site use and that the

improvement of customer satisfaction can signiflcantly

increase firm performance.

Previous electronic com merce, (EC) studies havefound that consumer characteristics are important when

considering issues related to the acceptance of online

shopping. However, most studies have focused on a single

product or similar products. The effects of different product

types have been relatively neglected. Previous studies have

limited the generalization of their results to a few products at

best, Jiunn-Woei Lian^ had overcome this limitation in this

study of Effects of consumer characteristics on their

acceptance of online shopping: Comparisons among different

product types. He mentioned that thé purpose of this study

was to explore the effects of different product types.

— - • •-•:-- , "- -".V ol. 4 ( 1 ) Jan. (201

A survey based approach was employed

investigate the research questions. Regression analy

demonstrated that the determinants of online shoppi

acceptance differ among product or service type

Additionally, personal innovativeness of informati

technology (PUT), perceived Web security, personal priva

concerns and product involvement can influence consum

acceptance of online shopping, but customers influence variaccording to product types.

Wei-yu Kevin Chiang'" has mentioned that w

stores, where buyers place orders over the Internet, hav

emerged to become a prevalent sales channel. In his researc

he developed neural network models which are known f

their capability of modeling non-compensatory decisio

processes, to predict and explain consumer choice betwee

web and traditional stores. He conducted an empirical surve

for the study.

In the survey, the purchases of six distinct produc

from web stores were contrasted with the correspondin

purchases from traditional stores. The respondents' perceive

attribute performance was then used to predict the customer

channel choice between web and traditional stores. H

provided statistical evidence that neural network

signiflcantly outperform logistic regression models for mo

of the surveyed products in terms of the predicting power. T

gain more insights from the models, he identifled the facto

that have signiflcant impact on customers' channel attitud

through sensitivity analyses on the neural networks.

The results indicated that the influential factors ar

different across product categories. The flndings of his studoffer a number of implications for channel management.

Tien-Chin Wang^ has mentioned that implementin

B2B e-commerce in small and medium enterprises (SMEs)

a long-term commitment and such enterprises are mor

limited in terms of resources than large enterprises, th

predicted value of successful implementation is extremel

useful in deciding whether to initiate B2B e-commerce. H

investigation had established an analytical hierarch

framework to help SMEs predicting implementation succes

as well as identifying the actions necessary befor

implementing B2B e-commerce to increase e-commerc

initiative feasibility. The consistent fuzzy preference relatiois used to improve decision-making consistency an

effectiveness,

A case study involving six influences solicited from

a Taiwanese steel company was used to. illustrate th

feasibility and effectiveness of the proposed approach. Th

analytical results showed that the three most influentia

factors are management support, industry characteristics and

government policies; meanwhile, the three least influentia

factors are organizational culture, IT integration and flrm

size.

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Table 1

Prefer Online shopping with experiencethan the Retail market

Vol. 4 ( 1 ) Jan. (2011)

Valid

Ye s

No

Total

Frequency

126

24

150

Percent

84.0

16.0

100.0

Valid

Percent

84.0

16.0

100.0

Cumulative

Percent

84.0

100.0

84% of respondents prefer online shopping than the

retail market and 16% of respond ents prefer retail market

than the online shopping.

Table 2

Frequent Online Shopping

ValidYes

No

Total

Frequency

74

76

150

Percent

49.3

50.7

100.0

Valid

Percent

49.350.7

100.0

Cumulative

Percent

49.3100.0

49.30% of respondents use the online shopping

frequently and «50.70% of respon dents mod erately use the

online shopping.

Table 3

Recommend online shopping to others

Valid

Strongly

Aeree

Agree

Undecided

Disagree

Total

Freq-

uency

5

62

82

. 1

150

Percent

3.3

41.3

54.7

.7

100.0

Valid

Percent

3.3

41.3

54.7

.7

100.0

Cumulative

Percent

3.3

44.7

99.3

100.0

54.70% of respondents are in undecided state to

recommend online shopping to others, 41.30% of respondents

agreed to recommend online shopping to others, 3.30% of

respondents strongly agreed to recommend online shopping

to others and 0.70% of respondents disagreed to recommendonline shopping to others.

Table 4

Access to useful shopping information

Valid Strongly

Agree

Agree

Freq-

uency

13

136

Percent

8.7

90.7

Valid

Percent

8.7

90.7

Cumulative

Percent .

8.7

99.3

Undecided

Total

1

150

.7

100.0

.7

100.0

100.0

90.70% of respondents agreed that online shopping

provides access to useful shopping information, 8.70% of

respondents strongly agreed that online shopping provides

access to useful shopping information, 0.70% of respondentsare undecided that Online shopping provides access to useful

shopping information.

Table 5

Online Shopping save time

i

ValidStrongly

Agree

Agree

Total

Freq-uency

145

5

150

Percent

96.7

3.3

100.0

Valid

Percent

96.7

3.3

100.0

CumulativePercent

96.7

100.0

96.7% of respondents have strongly agreed that

using online shopping w ould save time and 3.3% of

respondents agreed that using online shopping would save

time.

Table 6

Easy to do online shopping

; , [ • . ' 'Í -

Valid

Strongly

Agree

Agree

Undecided

Disagree

Total

Freq-

uency

8

31

99

12

150

Percent

5.3

20.7

66.0

8.0

100.0

Valid

Percent

5.3

20.7

66.0

8.0

100.0

Cumulative

Percent

5.3

26.0

92.0

100.0

66% of respondents say that it is not easy to learn

how to operate Online shopping, 20.70% of respondents

agreed that it is easy to learn how to operate Online shopping,

8% of respondents disagreed that it is easy to learn how to

operate Online shopping and 5.30% of respondents strongly

agreed that it is easy to learn how to operate Online shopping.

Table 7

Online shopping fits with lifestyle and shopping needs

Valid

Yes

No '

Total

Frequency

100

50

150

Percent

66.7

33.3

100.0

Valid

Percent

66.7

33.3

100.0

Cumulative

Percent

66.7

100.0

66.70% of respondents agreed that online shopping

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fits well with the lifestyle and shopping needs and 33,30% of

respondents did not agree that online shopping fits well with

the lifestyle and shopping needs.

T a ble 8

Online Shopping is a Good and Wise Idea

Valifl

Strongly

Agree

Agree

Undecided

Disagree

Total

Ereq.uency

38

94

16

2

150

Percent

25,3

62,7

10,7

1,3

100,0

ValidPercent

25,3

62,7

10,7

1,3

100,0

CumulativePercent

25,3

88,0

98,7

100,0

62,70% of respondents agreed that online shopping

is good and wise idea, 25,30% of respondents strongly agreed

that online shopping is good and wise idea, 10,70% of

respondents are in undecided state that online shopping is

good and wise idea and 1,30% of respondents disagreed that

online shopping is good and wise idea,

38,70% of respondents agreed that web is safe

environment to provide the personal information, 36% of

respondents are in undecided state that web is safe

environment to provide the personal information and 25,30%

of respondents strongly agreed that web is safe environment

to provide the personal information.

- i : : : ; : : r - - V ol , 4(1) Jan, (2011

T a ble 9

W eb is safe environment to provide personal information

Valid

Strongly

Agree

Agree

Undecided

Total

Freq-

uency

38

58

54

150

Percent

25,3

38,7

36,0

100,0

Valid

Percent

25,3

38,7

36,0

100,0

Cumulativ

Percent

25,3

64,0

100,0

T a ble 10

Online Shopping give a wider range of product choices

Valid

Strongly

Agree

Agree

Undecided

Total

Freq-

uency

44

96

10

150

Percent

29,3

64,0

6,7

100,0

Valid

Percent

29,3

64,0

6,7

100,0 "

CumulativePercent

29,3

93,3

100,0

64 % of respondents agreed that online shopping

gives wider range of ptoduct choices, 29,30% of tespondents

strongly agreed that online shopping gives wider range of

product choices and 6,70% of respondents are in undecided

state that online shopping gives wider range of ptoduc

choices.

Gender Male

Female

Total

1500C0-

200000

28

12

40

T a ble 11

Gender and Income Range

200001-

300000

28

15

43

Income Range \

300001-

400000

22

11

33

400001-

, 500000

15

3

18

Above

500000

11

5

16

150000-

200000

104

46

150

Results and Discussion

Ou t of 150 respondents,

- 40 respondent's income ranges between 150000-200000, in

which 28 respondents are Male and 12 respondents are

Female,

-43 respondent's income range between 200001-300000, in


Female,

-33 respondent's income range between 300001-400000, in


Female,

- 18 respondent's inconie range between 400001-500000, in

which 15 respondents are Male and 3 respondetits ate

Female, 16 respondents are in income above 500000, in

which 11 respondents are Male and 5 respondents ateFemale,

T a ble 12

Chi-Square Tests

Pearson Chi-Square

Likelihood Ratio

Linear-by-Linear association

N of Valid Cases

Value

2,140 (a)

2,330

,244

150

df

4

4

1

Asymp. Sig.

(2-sided)

,710

,675

,621

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Null Hypothesis Ho: There is no significant relationship

between respondents Gender and Income Range.

Alternative Hypothesis Hi: There is significant relationship

between respondents Gender and Income Range.

Since asymp. sig. value is >0.05, HQ is accepted and

H i is rejected. This implies that there is no significantrelationship between respondents Gender and Income Range.


between respondents Age and Income Range.


between respondents Age and Income Range.

Table 13

Chi-Square Tests

1 . , , - ,Î • ' •

1 ' • . ,.

Pearson Chi-Square

Likelihood Ratio

Linear-by-Linear

Association

N of Valid Cases

Value

11.779 (a)

13.276

.447

150

df

8

8

1

Asymp. Sig.

(2-sided)

• . 1 6 1

.103

.504


H | is rejected. This implies that there is no significant

relationship between respondent's age and Income Range.

T a b l e 1 4

Gender * Prefer Online Shopping with experience than the Retail m arket

Chi-Square Tests

Pearson Chi-Square

Continuity Correction (a)

Likelihood Ratio

Fisher's Exact T est

Linear-by-Linear As.sociation

N of Valid Cases

Value

.096 (b)

.005

.094

.095

150

df

1

1

1

1

, Asym p. Sig. '

i (2-sided)

.757

.946 •

• . 7 5 9

.758

Exact Sig.

(2-sided)

.811

Exact Sig.

(1-sided)

.465


between respondents Gender and Online shopping preference.

Alternative Hypothesis Hi: There is significant relationshipbetween respondents Gender and Online shopping preference.

Since asymp. sig. value is >0.0 5, H,, is accepted and

H i is rejected. This implies that there is no significant

relationship between respondents Gender and Online

shopping preference. '

Table 15

Gender *Frequent Online Shopping

Chi-Square Tests

. 1 . :

Pearson Chi-Square

Continuity Correction(a)

Likelihood RatioFisher's Exact Test

Linear-by-Linear Association

N of Valid Cases

Value -

.667 (b)

.409

.668

.663

150

df

1

1

1

1

i Asymp. Sig.

i (2-sided)

.414

. 5 2 2 •

.414

.416

Exact Sig.

(2-sided)

-

.480

Exact Sig.

(1-sided)

.261


between respondents Gender and Frequent usage of online

shopping.


between respondents Gender and Frequent usage of online

shopping.

Since asymp. sig. value is >0.05 , Hj, is accepted and

H i is rejected. This implies that there is no significant

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relationship between respondents Gender and Frequent usage

of online shop ping.

Table 16

Gender *Web is safe environment to provide personal

information

Chi-Square Tests

Pearson Chi-Square

Likelihood Ratio

Linear-by-Linear

Association

N of Valid Cases

Value

2.007(a)

1.964

1.805

150

df

2

2

1

Asymp. Sig.

(2-sided)

.367

.374

.179


between respondents Gender and web is a safe environment.

Alternative Hypothesis H^ There is significant relationshipbetween respondents Gender and web is a safe environment.


H i is rejected. Th is implies that, there is no significant

relationship between respondents Gender and web is a safe

environment.

Table 17

Age Range *Frequent Online Shopping

Chi-Square Tests

Pearson Chi-Square

Likelihood Ratio

Linear-by-Linear

Association

N of Valid Cases

Value

.595 (a)

.599

.353

150

df

2

2

1

Asymp. Sig.

(2-sided)

.743

.741

.553


between respondents Age range and usage of online shopping

frequently.


between respondents Age range and usage of online shopping

frequently.

Since asymp. sig. value is >0,05, HQ is accepted and

H i is rejected. This im plies that there is no significant

relationship between respondents Age range and usage of

online shopping frequently.

Findings from the Study

• From the observed d ata, it has been identified that 14% of

respondents are very satisfied and 70% of responden ts are

satisfied with online shopping. Only 16% of responden ts

have mentioned that they are not satisfied with the online

shopping. The reason being, the delivery delay and

defective products shipped. The online retailers should

make sure that they deliver products with quality at the

promised time, which will ultimately increase the

customer satisfaction.

• Around 84% of respondents preferred online shoppingthan the Retail product and their level of satisfaction is

also high.

• Online shopping does provide the comp arison shopping as

per 84% of respondents and 99.3% respondents agreed

that online shopping provides access to use shopping

information. These are the critical factors that infiuence

the customers to go for online shopping.

• 96.7% of respondents strongly agree that using online

shopping would save time for purchasing than the Retail

stores, as it would save traveling time and the time taken

to search for particular product in the retail stores.

• Shopp ers should take most care in the security of credit

card information during the online transaction. Only 64%

of respondents agreed that web is safe environment to

provide the personal information including the Credit card

information. Online retailers should work on achieving

100% security over the information provided during the

transaction.

• This study brings that the males with the income range

between 200001-300000, are using the online shopping

than the females with the same income. Respondent's age

group between 26-30 years prefers online shopping whencompared to the age group of 20-25 years and above 30

years. Also from the chi - squa re test, it. has been

identified that there is no significant relation between

respondents age and income range.

• As per the study, it has been found that 88 male

respondents prefer online shopping and only 38 female

respondents prefer online shopping. The online retailers

should consider imprc ing the online shopping service in

order to encourage the female customers.

Conclusion

This study is to determine the role of online

shopping within the broader retail market and using the

survey method we have collected the data from the internet

users. With respect to the collected data, it has been identified

that males prefer online shopping more than the females. The

preference is based on the comfort level of the customer.

Economic factors also play an important role in the

preference towards the online shoppin g. The study concluded

that consumers prefer online shopping because of the

following reasons:

• People shop online to avoid crowd s.

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• Shopping online is popular with people who have hectic

schedules. It saves time and allows consumers to do other

things.

• There are a variety of products available. The prices are

competitive.

• Product information isalso easily available at same site.

• Consumers appreciate the easy gift delivery option.

• People like to receive stuff in the mail.

The popular products purchased through the online

are Software's; Music, CD's,Recordings; Tickets (Concerts,

Movies etc.); Travel (Airlines, Car rentals. Hotels); Cell

phones; Books or Magazines; Computer Hardware; Videos,

DVD's and Services (Insurance, Legal),

References

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(Received 24'" September 2010, accepted 3 0* October 2010)

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