Dav academic Review a refereed Research Journal



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DAV Academic Review A Refereed Research Journal

Issue-2, Vol-1 ISSN 2455 – 3999

December 2016 davacademicreview@gmail.com



A Study of Emerging Trends of Online Shopping Influences on Indian Retail Market And Customer’s Behaviour
Dr Parmil Kumar

Associate Professor in Commerce at Sahu Jain College Najibababad
1. Introduction

The Term Online Shopping is the most useable word in Present Technology Era, with the development of internet OSS emerged in a bright way, Basically This OSS is an ecommerce web model which enables the simplest way for consumers to perform shopping for consumer products. This research presents the comparative study of factors influencing consumer behaviour towards online shopping in Indian context. Online marketing becomes the key to open the lock of success for companies and online presence of the organization becoming inevitable. With many technical revolutions like affordable internet 3G connection, Data Modems, Smartphone’s with internet connectivity, the number of customer buying products online is increased. The average time spending and connectivity with internet increased many folds. Here in this paper our objective is to study the factors which are responsible for attracting customer to shop online. The study is descriptive and analytical in nature. We choose a non probabilistic sampling. As they were heterogeneous on same parameter, we divided them into different strata through stratified sampling. To know the views and purchasing habits of online buyers, Primary data are collected from mailing questionnaire. The data were recorded using a Likert scale. Analysis and interpretation of the data were done by the Statistical Program for Social Science (SPSS).



Keywords: - Online marketing, Internet marketing, online shopping, Online Shopping System[OSS], consumer, e-commerce, Internet technology, Analysis models, DFD etc.
Modern technical advancement in mobile and internet technologies brought lots of changes in the ways of marketing by retail firms. No matter how strong the brand name become, it’s the way of marketing which makes their product soaring new heights or touching toes. Online shopping in India which is at a nascent stage is poised to witness significant growth in the next few years, with the industry likely to touch USD 34.2 billion by 2015. A new trend of selecting Internet for different marketing function has come up. Consumers are fully loaded with gadgets like I-phone, laptop, iPads with 24 hour internet connections. Anew IBM study of 26,000 global consumers released at National Retail Federation convention 2013 found that customers are diversifying the way they shop for and acquire goods. They become increasingly open to buying both online and in-store depending on their needs at the time of purchase. Today’s consumer is intelligent and opportunistic, navigating between brick and mortar store and online websites, interchangeably to meet their shopping needs of the moment. These advancements, Created a need of adopting new ways of marketing for retailers. Retailers have to create a consistent, convenient shopping experience across each consumer touch point, whether it is in store or online or website of a third party. In recent 2 years because of advancement in mobile phone technology and telecommunication sector, access to internet becomes very easy and affordable. Internet can be accessed through USB modem and mobile SIM and Wi-Fi in mobile phones. Total Internet Subscribers (excluding Internet Access by Wireless Phone Subscribers) become 24.01 million . Along with it, It is estimated, that around 27 million (in India) are active mobile Internet users. These advancements leverages the use of the internet and online marketing for selecting internet as a marketing channel for marketing functions. Out of the approximate 125 million internet user base in India, the female population accounts for almost 40%, according to a joint study by apex industry body Assocham and ComScore. The study has observed that one out of every 10 Indians is online thereby making it about 10% online user penetration in India. "Interestingly, about 75% of the online audience between the age group of 15-34 years, India is one of the youngest online demographic globally . "The IBM study also found that nearly half of online purchases in studying categories resulted from “show rooming,” a burgeoning trend in which consumers browse goods at a store, but ultimately buy them online. In China, 26 % admitted to show rooming, compared with 13% in India and 7% in the United States. Hundreds of websites currently are operating as e commerce host and many more to join yet. The significant growth in internet users in India reflects the evolving nature of the market and the Indian consumer. Scope in e-commerce is huge because of a large population base, changing consumer lifestyle and lack of infrastructure for retail malls and stores. More and more customer are becoming technically savvy and loaded with technical gadgets like smart mobiles, laptops, I pads. Internet connection becomes so pocket friendly and affordable to everyone. All these factors are clear indication of a boom in online selling figure and a new trend in Indian retail market.

Now a days The Internet is inherently global in nature, as it is globally accessible and crosses national boundaries to allow consumers around the world to participate equally.

As This is a two way system from Customer to Firm and Firm to Customer.OSS Module has its double meaning having some point of view like customer and firm while based on optimized parameter . This OSS has its transfer function based on optimized parameters which decides module to be a best in e-commerce field. . May 19, 2016 Tim Cook, CEO of Apple announced the opening of a new office in Hyderabad, India that will focus on development. It will further encourage online shopping and affects on Indian Retail Market positively.
1.2. Review of Literature

Online stores are a form of multi-channel retailing which can now be used to gain access to a wider market (Kim & Park, 2005). Opening up online shops brings about great advantages as many consumers are leaning towards online shopping. It provides a very flexible way to sell products and services (Doherty & Ellis-Chadwick, 2006). People are finding it more convenient to do their shopping online instead of going out and doing it physically. They can buy almost any products or services they desire just by clicking on their computers or phones (Kau et al., 2003). However, online retailing does have certain downsides which should also be taken into consideration. Moreover, similar to offline retailing, online shops also have both hedonic and utilitarian aspects and individual consumers perceive the concept of online shopping differently.


Why Shop Online

Online shopping is more efficient in meeting the consumers’ needs and wants. It allows the consumers to easily attain knowledge about the brand’s product quality, availability, product specifications and prices, and compare that with those of another brand. This means they can now make more intelligent purchasing decisions in a way which is not possible through traditional shopping . Moreover, they can purchase anonymously which is convenient when it comes to personal products that they may feel uncomfortable buying in stores . Brown and Reid observed that routine tasks like shopping for groceries have become easier for customers who do not like crowds and driving the trolley around the store. It seems that people nowadays, especially young adults, are becoming more conscious about personal image and fashion. For these types of consumers, shopping is an entertaining, pleasure-filled activity that is like an escape. It is important to note that such shoppers are looking for good service standards too. In terms of online shopping, the consumer satisfaction will be high if, for instance, the company has a user-friendly website which makes shopping through it seem like a stimulating experience . Online retail shops often market themselves through low price. For example, Amazon.com uses this tactic to attract consumers away from traditional bookstores. These low price online retail shops are causing a great consumer surplus . Haubl and Trifts also mentioned that when shopping online, consumers can compare prices and look at alternative options. Websites such as Yahoo Shopping aid in making this comparison with just a few clicks. Furthermore, on online shopping websites, consumers have access to other customers’ reviews which can guide their purchasing decision . To comprehend consumers’ reasons to take part in shopping online, it is important to take into consideration the situational factors that lead to it. Wolfinbarger and Gilly concluded that the reason most shoppers like to make online purchases is due to high accessibility and great convenience. Shopping from home saves them the effort of travelling because it allows them to shop right from their house. This is especially good for people who have long working hours and not much spare time to shop, as the internet allows consumers to shop at any time during the 24 hours in a day. Therefore, one of the key situational factors is the time limitation. According to Avery , another factor is immobility; this is found in consumers who are unable to go out shopping to stores due to problems such as an illness or a physical disability . The third situational factor is geographical as it is related to the distance consumers often need to travel for the stores which have the items they need. Consequently, online shopping helps them overcome this burden. For instance, many people residing in busy cities may not have the appropriate transportation to travel to more affordable shops. They may be forced to shop at the costly town centres if it was not for the option to shop online . The next factor relates to situations when a specific good is needed to be purchased and it is not available in traditional shops. An example of this is plus-sized clothes or shoes, thus online shopping is an easy option to obtain such goods. How appealing alternatives are is the last situational factor. This means that if a store in the consumer’s area is selling the same good as an online store, the consumer may find the brick-and-mortar approach to shopping more attractive . Overall, convenience is a major factor which motivates consumers to opt for online shopping .
Online vs. Offline Shopping

In traditional shopping, features of the atmosphere are a key factor influencing the consumer’s perception. These features also affect whether the consumer is finding the shopping experience pleasurable or not. On the contrary, the environment in online shopping includes a much narrower range of experiences and certain technological abilities are needed to function in such a setting. All the senses cannot be used to perceive online shopping experiences. Therefore, Lunt (2000) expressed that the key explanation for consumers not shopping online is because of the limited experience factors involved (Dennis et al., 2007). However, Childers et al. (2001) claimed that online shopping does have several merits and interactions which can bring about interesting experiences (Demangeot & Broderick, 2006). Even though online shopping has many benefits, there are still consumers who have reasons to avoid it. Lee and Turban (2001) pointed out that navigating websites can prove to be tricky for consumers who are not familiar with shopping this way and they do not trust the internet as a safe source for transactions (Monsuwé et al., 2004). Such users frequently complain on factors such as: refunds, return policies, billing problems, exchange policies and faulty products. Dellaert and Kahn (1999) observed that if consumers face problems while shopping online, they only wait eight seconds to receive any response from the company’s system before giving up the purchase. Still, in contrast to the traditional shopping brick-and mortar retail environment, marketers of online shopping sites generally put forward more detailed product information. This does give them an edge as these days consumers want to know everything about a product before spending money on it (Chen & Chang, 2003). Online shoppers are more willing to take risks compared to offline shoppers. Several authors have talked about the risks faced by online retailers: Rowley (1998) mentioned the uncertainty surrounding online transactions, Forcht and Wex (1996) pointed out that organisations have to guard themselves when it comes to data authenticity and reliability, and Richards (1997) stated that there is insufficient legal material for online retailing which could prove risky if something goes wrong during the online purchase (Whysall, 2000). Authors have also discussed a way to measure the e-shopper’s trust towards online retail businesses by exploring: the security level for credit cards, private details of shopper, and the safety and trustworthiness of the website (Merrilees & Fry, 2003). These risks, especially security-related, do cause online businesses to lose potential customers. Additionally, in order to perform online shopping the consumer must have stable internet access and they must be comfortable with using the internet. This may be an issue for the older generation who are not as confident with their technical abilities (Kim & Park, 2005). However, it should be noted that these possible risks can be avoided or lessened through acquiring the necessary experiences and obtaining certain skills and knowledge on computers, the web, and shopping online (Li & Zhang, 2002).
Online Shopping Experience

According to Tauber experiences are an important part of consuming and shopping. Shoppers are not always simply looking to buy products, but also want to get pleasure from the shopping activity. This experience is affected by the customer’s shopping goals, what they expect, and what their motivations are (Demangeot & Broderick, 2006). Motivation for shopping online is an important factor to consider when analysing the shopping experience (Swatman & Chin, 2004). Holbrook and Hirschman (1982) established that it is highly important to create hedonic significance through good experiences in order to toughen up the

relationships with consumers. Customer experience involves engaging several of the customer’s aptitudes to satisfy and create value while he interacts with the organisation, its products and its other customers. Similarly, an online retailer’s role is to establish an appropriate environment to help customers in gaining a positive experience while shopping online (Pentina et al., 2011). When people shop online, they are not only consumers but also users of the computer (Demangeot & Broderick, 2007). Huang (2003) stated that the online shopping environment is highly interactive. Content of the website is a critical aspect in terms of how accurate and relevant it is. The website design is also very important if the company wants conduct a successful e-retailing business (Colla & Lapoule, 2012). The website visuals include: colour themes, font usage, photos, logos, graphic qualities and so on. These visuals capture the consumers’ attention by communicating a distinct image of the organisation and its products and services (Demangeot & Broderick, 2006). Factors such as low prices, good customer service, easy navigation, and also plainly stated return and exchange policies, are a part of the online shopping experience (Xu & Paulins, 2005). It is possible to improve the experience of online shoppers by responding to the problems they may face, particularly safety concerns. The best way organisations can handle this issue is through communication. They should let the consumers know that their website is secure and that privacy protection is a priority for the organisation (Strategic Direction, 2012).
Hedonic vs. Utilitarian

Consumers are motivated to shop on the internet for either utilitarian or hedonic elements. Consumers in the utilitarian environment are simply looking for a certain good or service, shopping is similar to a chore for them (Demangeot & Broderick, 2006). They just want to fulfil their shopping needs quickly and efficiently. However, most online shoppers look for hedonic value through their experiences. Consumers view shopping as a pleasure-filled activity and find it entertaining. According to Holbrook (1994), some people do not value the actual purchase as much as they value the contentment they gain from shopping online (Monsuwé et al., 2004). Clothing products are seen as hedonic and young adults are getting consistently more into browsing through online clothing shops (Strategic Direction, 2012). They do not only care about the quality of the clothes and their prices, but also the website’s visual interactive aspects (Liu & Forsythe, 2010).

Nowadays, shopping has become a hobby on its own. It is seen as a way to escape the busy world and forget about the troubles in our daily lives (Ozen & Engizek, 2014). According to Arnold and Reynolds (2003), hedonic incentives can be noticed when consumers feel emotionally attached to the experience of shopping on the internet. Such people can be referred to as impulsive buyers. Sherry (1999) adds that their actual motivation may not be to buy something when they visit the online retail website, but through positive experiences, they may decide to make a purchase. In comparison to this, utilitarian shoppers are more logical. Their shopping is not spontaneous; it is a result of wanting to fulfil their needs and they buy after thorough research of product information (Hill et al., 2013).
Perception of Online Shopping

The consumer's perception of their experience while shopping online is also a factor to consider. When the consumer’s experience exceeds their expectations, there is a high chance they will become loyal towards that particular online shop. This satisfaction is based on a number of features such as: how fulfilling the experience was, how smooth the transaction was and the ease of interaction .The shopper’s perception will also vary depending on what kind of product they are looking to purchase. For instance, Klein said that products which require searching before purchase (such as books) will be different from products that are purchased through experiences (such as clothes). Zhou et al also stated that the online shoppers’ perception will vary depending on the type of product because the risk factors are different for each . Some consumers do not shop online because they perceive traditional shopping as being soothing and fun. It improves their mood and turns into a social activity which they can do with their friends .


The future of Internet retailing

Whilst it may not be possible to predict with any degree of certainty how the Internet will shape the design of markets, the practice of marketing or the behaviour of on-line shoppers, in the future, it is very clear that on-line retailing’s market-share, and influence, will continue to rise. For example, in the UK, it has been estimated that the number of customers being served by the UK online and catalogue retail industry, which currently stands at 26.9 million active online consumers, will rise to around 32 by the year 2017.

So who will be getting the lion’s share of these rapidly expanding on-line markets? One thing seems clear, in a retail environment in which brand is getting more, rather than less, important , it is likely that the big names will continue to dominate Internet retailing. At least in the immediate future, the majority of these big names will be established retailers who will continue to retain a very strong position within the electronic market-place. Moreover, given the consumers’ desire to use the Internet as a flexible tool for researching products and locating stores, as well as purchasing merchandise, it would also seem likely that the multi-channel format will be the preferred design .However, the established retailers will inevitably continue to face stiff competition from the successful and high profile ‘virtual merchants’ and ‘disintemediators’, such as Amazon.com, Apple.com andDell.com. It is also very likely that the established retailers will face growing pressure from a variety of completely new businesses, keen to get their share of the electronic market. If one thing has become very clear, from the first fifteen years of Internet retailing, it’s that there is always the opportunity for the innovative and dynamic company, that has read the market well and has an effective business model, to make a strong impact, and in so doing, grow very big and powerful, very quickly . As we’ve seen from the experiences of organisations such as Amazon and eBay, the Internet can prove to be a very fertile environment if organisations have good ideas, supported by an appropriate set of core competences and capabilities.


  • In the future, it is very likely that there will be a significant struggle for power between the retailer and the consumer. On the one hand, all Internet retailers will want to get even more out of their customer data-bases, so that their ‘one-to-one’ marketing and customer relationship management initiatives will deliver even more value. Moreover, Kaufmann-Scarborough suggest that in future this wealth of consumer oriented data, will also allow retailers to better predict their customers’ requirements, and, in so doing, provide a better level of customer service.Retailers will also face growing pressure from consumers to allow their services to be accessed flexibly from a growing array of mobile devices, as they want to be able to shop on the move. All in all, it is likely that the power of the consumer will continue to grow, as they become increasingly willing and able to seek and use information, and then either directly or indirectly exert pressure on retailers. In parallel with this trend, it is also likely that the power of the electronic intermediaries will continue to grow, as consumers become more reliant on their information providing capabilities.


2.3. Contribution to the Society

Online Shopping offers immense choice. Retailers with bricks and mortar premises are limited in the amount of goods they can show or even keep in their inventories. That’s perfectly understandable, since both represent a significant investment of capital. Internet retailers have to show pictures and offer descriptions of the entire range, making things much better for consumers. Where those shopping in retail parks might have to wait for certain items for up to two months, generally online shopping offers a swift dispatch of goods, eliminating that waiting time-after all, once we’ve spent our money, we don’t want to wait. Online shopping offers so many advantages for consumers. Its easy retailers deliberately make their websites simple to navigate and use and with a credit card the world is your oyster. The choice can seem almost infinite, and we’re not longer restricted to just buying locally or through mail order catalogues. We don’t need to bother with opening hours, pushy sales staff, parking, traffic and the hundred other problems that accompany any shopping trip.


2.4. Limitation of Study

  • Lose the Tactile Experience :- When you shop online, you don’t have an opportunity to touch and feel items you are considering purchasing. With some products- like books and electronic equipment this isn’t an important consideration. However, furniture, rugs and other textile-based merchandise, it can be hard to gauge quality without hands on contact. Fit is also concern with any kind of apparel.

  • Shipping Adds to the Cost:- What looks like a bargain might not be such a good deal when the shipping and handling charges at exactly how much you are likely to need to pay to have your merchandise delivered to your door-or to the person you are purchasing it for- before finalizing your purchase decision.

  • Returns Can Be Costly:- Its essential to be aware of the return policy for any e-commerce retailer you are considering doing business with. The majority of sites do not pay return shipping if you have to send something back, so it often costs you more money than you planned to spend if you need to exchange an item. Returning merchandise for a refund can also be costly. Most online retailers do not refund shipping costs not the cost of return postage or the original shipping charge. This can mean that, for relatively low-dollor items, it can cost you nearly as much to return an items as it does to just keep the merchandise.

  • Dealing with an Unknown Vendor:- When you are shopping online, unless you are purchasing from a well-known e-tailor like Amazon or Zappos or the online arm of a department store like Kohl’s or JC Penney, you really don’t know who you are doing business with. Anybody can open an online store especially with products that are easy to access through a drop-shopping company but not everyone is honest are reputable. When you are shopping with an online store that you don’t know anything about, it can be difficult to feel confident that they’ll still be there if a problem arises with your order and to feel that the personal information you are required to share when making a purchase will really be protected. Online security concerns can certainly be an important consideration when selecting an e-tailor.


2.4. Formulation of Hypothesis

The study aims to find out the most important factors, which influence the customer to online shopping instead of in store shopping. Advancement in internet technology and increasing penetration of internet made us constructing following two general hypotheses as mentioned. The Null hypothesis (H0) for the study is:

.H0: the factors which help customers to take decision to shop random and uncorrelated.

The alternative hypothesis for the study is:



H1: the factors which help customers to take decision to shop are specific and correlated.
2.5. Research Design

I shall use primary data as well as secondary data for research purpose. For our Primary research Objective to understand the “The views of Indian consumer towards online marketing”, we have done analytical research. We gathered data from the sample by questionnaire. Samples to be selected from Moradabad and Bareilly regions in Uttar Pradesh state. Considering coverage of relevant occupation, age group, social class and benefit sought, samples were selected by probabilistic sampling. As the samples were heterogeneous on these parameters, they were divided into different strata through stratified sampling. As the objective was confided to know the perception of people who use the internet, only those samples were selected who were using the internet. Students of age group 16-26 and adult of age group 26-50 were selected as they are the most prominent one to use the internet. These samples were spread in different occupation like students Professional, Govt. Servant, Self employed and corporate executive. The secondary data was collected through books, journals and data published by TRAI and other website whose reference is appended. Primary data has been collected through well-structured questionnaire, and the relevant data has been collected.


2.6. Determination of Data Analysis Method

In the study, Factor analysis may be done to find out the important factors that make consumer to shop online. To find out the most important factor, a list of factors is made and each respondent to be asked to rate them according to their importance in their decision for online shopping, on a scale of 1 to 5 (1 being the least and 5 being the most important). These are the factors which may alluring customer to shop online. We listed the attributes of the particular factor and respondent to be asked to rate them according to the importance in their buying decision on the scale of 1 to 5. Bartlett’s test of sphere city to be used to test the hypotheses. KMO statistics may also be used to measure the appropriateness of the factor analysis. In the second part of the study, various motivators were studied by using percentage analysis. The respondents may be asked to name the motivator from the given list which motivates them to do online shopping then shopping in store. The data collected to be analyzed with SPSS 15 for factor analysis .The Bartlett test of sphere city may also be used.




Bibliography and References

1. Malhotra Naresh K , (2009). Marketing research fifth edition, Pearson education.Delhi

2. David Whitley (2001), E commerce- Strategy techniques and application, TataMcGraw Hills, New York.

3. C.R. Kothari (2004), Research Methodology, Second edition, New age international,Delhi.

4. Andy Field (2005), Discovering statistics using SPSS, Second edition, Sagepublication, New Delhi.

5. Bellman, S., Lohse, G., & Johnson, E. (1999). Predictors of online buying behavior.Communications of the ACM.


Web References

1. The Indian Telecom Services Performance Indicator Report (Sept’2012), retrievedfrom www.trai.gov.in,Link,(http://www.trai.gov.in/WriteReadData/PIRReport/Documents/Indicator%20Reports%20-%20Sep_2012.pdf)

2. Annual report for Indian telecom sector.(http://www.trai.gov.in/annualreport/English_Front_page.pdf.

3. Statistics for internet user’s in India (http://www.internetworldstats.com/asia/in.htm).



4. Internet Telecommunication union website http://www.itu.int/en/Pages/default.aspx

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