Iyer seethalakshmi balakrishnan assistant professor
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| “A STUDY OF CUSTOMERS’ PREFERENCE WITH REFERENCE TO STORE AND ONLINE SHOPPING IN KALYAN CITY”
IYER SEETHALAKSHMI BALAKRISHNAN ASSISTANT PROFESSOR VPM's K.G. Joshi College of Arts and N.G. Bedekar College of Commerce, Thane. 9167713538 seethas153@gmail.com DR. KISHORI JAGDISH BHAGAT M.Com., M.Phil., M.B.A., NET, Ph.D. VICE PRINCIPAL Pragati College of Arts and Commerce, Dombivli east 9819340105 kishoribhagat@rediffmail.com “A STUDY OF CUSTOMERS’ PREFERENCE WITH REFERENCE TO STORE AND ONLINE SHOPPING IN KALYAN CITY” Iyer Seethalakshmi Balakrishnan M.Com, CS, NET.
M.Com., M.Phil., M.B.A., NET, Ph.D. (Vice Principal, Pragati College of Arts and Commerce, Dombivli east) Abstract: Measuring customer satisfaction is critical in the process of serving the customer. Retailers have already realized that the growth of their business hugely depends on the quality of the customer service provided and overall satisfaction of the customer. Today, customers expect higher quality of services which, if fulfilled, could result in significantly improved customer satisfaction and higher customer retention levels. An in depth analysis of the perceptions of their customers is essential to achieve sustainable growth for the sector. This study focuses on study of customers’ preference with reference to store and online shopping in Kalyan city. Key words: Customers, shopping, store shopping, online shopping, customer preference. Introduction: Today’s customers are blessed with enormous choices, not only among different products and brands, but also among diverse retail formats such as shopping malls, hyper markets, specialty stores, department stores and online, electronic, TV shopping systems. Online retailing means the sale of goods and services via internet or other e-channels for personal or household use by customers. Considering the internet’s present growth rate and society’s paradigm shift from an industrial to an information age, it is worth to understand the competitive effects of internet commerce on the marketplace arise. Online retailing has evolved because of the facts like capability of internet to spread around the world on a fast pace, vital role of internet to make e-tailing a big hit, modernization of traditional retail formats and e-tailing has many advantages over the traditional retail formats. As there is surge in PC penetration, growing internet awareness and computer literacy and change of internet more as enabler-facilitator than messaging- entertainment, internet shopping has got much momentum growth. Online shopping is a recent phenomenon in the field of E-Business and is definitely going to be the future of shopping in the world. Though online shopping is very common outside India, its growth in Indian Market, which is a large and strategic customer market, is still not in line with the global market. In-fact these are acting as stepping-stones to concept of global village. More over the inventory management overheads also decrease significantly through online shopping. Online shopping brings many advantages to the customers. Customers can shop from any place and need not physically visit the shops/outlets for shopping purposes. Therefore, even if customer is staying in remote area, he/she can easily shop. If a customer goes to any retail outlet or any other shop, the choice of products is normally very limited. However, here customers can visit any number of sites to reach a final choice. Hence, online shopping provides unlimited choices to the customers in nut shell. The customer can shop any day of the year on any time of the day. This also helps in customers’ time and energy saving. More over due to unlimited choice and less excess time, customers can easily search for the desired things and can easily compare the products/items. As truly said nothing comes without a cost in business. Online is not an exception to this. As customer has unlimited choice, he/she can fall a victim to over choice. Customer may spend a good amount of time without taking any final decision. But the biggest disadvantage is that there is no “touch and feel factor” involved in online shopping. Apart from item/product cost, transaction cost is also very important. Therefore, it is very much possible that customer purchases from internet / TV by just looking at price, but ultimately may land up paying more due to transaction cost. Thus, these extra costs become very crucial in online shopping. Other important issue is that one of the major options to purchase from Internet / TV is through credit cards. However, it is quite possible that customers may fall victim due to security and privacy problems on the Internet. Today’s online shopping is replacing the physical store shopping all over India. The Indian customers seem to be undergoing a shift in terms of personality, buying motives, interest, attitudes, beliefs and values when he or she is making a shift from physical store shopping to online shopping. The scope of this research is to make an overall cost benefit analysis of customers’ mode of shopping with regard to the availability and quality of products and services offered at physical and online shopping. Shopping The term “shopping” refers to a state of searching for or buying the goods or services. This term can also be used to refer to different commodities or goods that are purchased from different stores. It is the process of browsing and/or purchasing items in exchange for money. Online Shopping A online business employs electronic means to transact business as opposed to a traditional brick and mortar business that relies on face-to-face transactions with physical documents and physical currency or credit. Amazon.com was an online business pioneer. As an online bookstore, it delivered and brokered bookstore services without a physical retail store presence; efficiently connecting buyers and sellers without the overhead of a brick-and-mortar location. As Web 2.0 services have risen in popularity, many businesses have begun to use these communicative and collaborative technologies to reach their customers. With heightened security, PCI DSS compliance regulations, and more stringent monitoring abilities, credit card transactions via the Internet are even more secure than other options such as phone or fax. Along with connecting customers with physical products, online businesses are starting to provide important services as well. Recently, the online delivery of professional services such as administration, design, and marketing services have risen in popularity. Such companies have refined their offerings to include services such as a Online Assistant, in which the person providing the service works out of his/her own office and provides services via the Internet or other technology. Objectives of study: 1. To study the perception of Customers towards stores shopping and online shopping. 2. To understand major factors that influence customers’ preference in stores shopping and online shopping. 3. To identify and compare the level of satisfaction among customers in stores shopping and online shopping with special reference to customers in Kalyan city. STATEMENT OF THE PROBLEM The lifestyle of the Indian customer pervades various aspects of his/her life and varies according to the sociologically relevant variables. Family incomes are seeing a jump in recent times resulting in the customer spending more and a change in the lifestyle of the Indian customer is of great interest to society at large, manufacturing and customer companies, advertisers, super mall owners, economists, census, researchers and so on. This study could also be used in the context of positioning new products, repositioning an old/existing product, developing new product concept and creating promotional strategies. The objective of this research is to study the metamorphosis in the life of the Indian customer and his attitude after the advent of online shopping in the country and how the gradual ongoing shift in his/her attitude has affected sales of customer products. It will help to analyze the customer’s level of preference towards store and online shopping facilities of select brand, as an increasing number of urban customers are beginning to see themselves in a more modern context. Scope of the study The study is specific only to the customers in Kalyan city. The study revolves around customer preference and its related factors. REVIEW OF LITERATURE Sultan and Henrichs (2000) in India. A survey among 150 internet users, including both users and non-users of online shopping, was carried out to understand why some purchase online while others do not. The results suggested that convenience and saving of time drive Indian customers to shop online; while security and privacy concerns dissuade them from doing so. The work of Kim and Park (2005) using U.S. samples suggests that their positive attitudes as well as willingness to search for pre-purchase information leads to a strong likelihood that they will buy online. Online shoppers are required to have computer skills in order to use the Internet for shopping. Hence, those who are not comfortable with using the computer, will likely do their shopping at the traditional store, modern shop, or discount store (Monsuwe 2004) because it will be faster shopping there than in the Internet shop. Goldsmith and Flynn (2004) state that the home catalogue is another traditional selling channel where people can shop at home because of the varieties of products offered in the catalogue. They can order through the phone or by mail. It is convenient except that they are not able to touch and feel products before purchasing. For Internet buyers, gender, marital status, residential location, age, education, and household income were frequently found to be important predictors of Internet purchasing (Fram & Grady, 1997; Kunz, 1997; Mehta & Sivadas, 1995; Sultan & Henrichs, 2000). Sultan and Henrichs (2000) reported that the customer’s willingness to and preference for adopting the Internet as his or her shopping medium was also positively related to income, household size, and innovativeness. In 2000, women represented the major online holiday season buyer (Rainne, 2002; Sultan & Henrichs, 2000). According to a report by the Pew Research Center (2001), the number of women (58%) who bought online exceeded the number of men (42%) by 16%. Among the woman who bought, 37% reported enjoying the experience “a lot” compared to only 17% of male shoppers who enjoyed the experience “a lot”. A survey conducted by MasterCard worldwide, (December 2008), The survey showed that the Asia-Pacific region was found to be an active one for online shopping, where 76 percent of respondents said they intend to make a purchase in the next six months. The survey also highlighted the rise of shoppers in the fast-growing markets of China and India. The rising population of upper-middle income urban elites is likely to boost the online shopping markets in China and India underpinned by a paid pace of urbanization, robust economic expansion and rising spending power. Activity from these markets is expected to topple the current "pre-eminence" of Japan and South Korea in terms of share of the total online shopping population in the region. The study projects China's online shopping population to increase to 480 million by 2010. In India, 54 per cent of the respondents had used internet for shopping. Interestingly, among all the markets surveyed, India is the only one where the 18-29 year age group has the highest average spend on online shopping. The majority of the online shopping conducted in the region was planned, with 83 percent of online shoppers admitted that they tend to plan their shopping in advance and conduct research on their planned purchases. Most online shoppers either bought items impulsively “hardly ever” (36 percent) or “just a couple of times” (38 percent). Study by Vijay, Sai. T. & Balaji, M. S. (May 2009), revealed that Customers, all over the world, are increasingly shifting from the crowded stores to the one-click online shopping format. However, in spite of the convenience offered, online shopping is far from being the most preferred form of shopping in India. A survey among 150 internet users, including both users and non-users of online shopping, was carried out to understand why some purchase online while others do not. The results suggested that convenience and saving of time drive Indian customers to shop online; while security and privacy concerns dissuade them from doing so. Hypothesis: There is a gradual shift from store shopping towards online shopping among the customers in Kalyan city. Null hypothesis:
Research methodology The research is both exploratory and descriptive in nature and relies on both primary and secondary data. Secondary data was collected from the available sources like journals, articles and website. A convenience sample of 50 customers in Kalyan city, thane district Maharashtra was selected for the present study. The respondents’ were from different age groups, gender, educational backgrounds. A close-ended structured questionnaire was prepared and administered to ascertain their preferences. The data collection method involved direct interview. For measuring various phenomena and analyzing the collected data efficiently, a number of statistical techniques were used including cross tabulation, Chi-square test, Phi test and Cramer’s V test. Survey results and interpretation The Figure no.1 depicts the classification of respondents on the basis of age. Figure No. 1 From the above figure no.1it is observed that 23respondents are from the age group of 19-22, 10 respondents are from the age group 23-30, 8 respondents are from the age group 31-40, 9 respondents are from the age group 40 & above. The Figure no.2 depicts the classification of respondents on the basis of gender .Figure No. 2 From the above Figure no.2 it is observed that female online shoppers are to the extent of 58% and Male online shoppers are to the extent of 42%.
From the above Figure1 it can be observed that majority of people who shop from online are students to the extent of 44% and people who are in service to the extent of 38%, self-employed customers to the extent of 14% and house wives to the extent of 4%. The Figure no.4 depicts the issues in online shopping.
From the above figure no.4 it is observed that one of the biggest issue in online shopping is lack of security in payment procedure as per the opinion of 62% customers surveyed. 54% respondents felt that absence of touch factor is a limitation of online shopping. 64% of the customers surveyed are satisfied with the return policy and do not feel it is complicated.70% of the respondents surveyed are satisfied with the online shopping procedure. The Figure no.5 depicts the attractions of online shopping. Figure No. 5 Subsequently it is tried to establish relationship between the variables using statistical techniques of Crosstabulation, Chi-square test, Phi test and Cramer’s V test. Table 1
Table 1 assesses the relationship between gender of an individual and his or her preference for online shopping. The perusal of Table 1 reveals that online shopping is quite popular among men and women as 80 percent of women and 90 percent of men prefer online shopping. Out of 29 females, 12 shop online, 14 shop at store as well as online and 3 shop only at stores. Whereas out of 21 male respondents, 15 shop online, 5 shop at store as well as online and 1 shop only at stores. Table 2: Chi-Square Test
Table 2 indicates the result of Chi square test where the value found is 4.430 which is less than the table value. Thus, we accept the null hypothesis that there exist an association between Gender and preference of shopping. Table 3
Table 3 assesses the relationship between the availability of door step delivery convenience of online shopping and customer’s preference for online shopping. Out of 4 customers who shops only at store, 1would prefer to shop online due to door step delivery option whereas, 3 would not. Out of 19 customers who shop at stores as well as online, 17 would prefer to shop online due to door step delivery option whereas, 2 would not. Out of 27 customers who shop online, 25 prefer to shop online due to door step delivery option whereas, 2 do not. The cross tabulation table explains us that 86 percent people like the door step delivery option provided by online shopping. Table 4 Chi-square test
In order to examine the strength of association between the two variables Phi test and Cramer’s V test has been performed. The test results explain that there exists a strong statistically significant association between the two variables. Table 6
The table 6 Table 3 assesses the relationship between the availability of offers/discounts in online shopping and customer’s preference for online shopping. Out of 4 customers who shops only at store, 1would prefer to shop online due to availability of offers/discounts; whereas, 3 would not. Out of 19 customers who shop at stores as well as online, 18 would prefer to shop online due to availability of offers/discounts; whereas, 1 would not. Out of 27 customers who shop online, 26 prefer to shop online due to availability of offers/discounts; whereas, 1 do not. The cross tabulation table explains us that 90 percent people prefer online shopping due to availability of various offers and discount. Table 7 Chi-Square Test
Table 7 Chi-square test of association between two variables explains that there exists a statistically significant association between two variables. The Chi-square test result rejects the null hypothesis that there is no association between the two variables. This means that more offers and discounts promotes online shopping. Table 8 Test of strength of association
The Phi and Cramer’s V test confirms that there exists a strong relationship between two variables. As they affect each other by 63 percent. Findings and suggestions:
Suggestion & ConclusionOnline shopping is a recent phenomenon in the field of E-Business and is definitely going to be the future of shopping in the world. Though online shopping is very common outside India, its growth in Indian Market, which is a large and strategic customer market, is still not in line with the global market. In-fact these are acting as stepping-stones to concept of global village In this study even though the number of male and female online shoppers are very close it is interesting to observe that the reason for such preference is not similar among male and females. Females preference comes due to the presence of a variety of national and international brands at discounted rates along with attractive offers. Whereas the male preference is dominated by the convenience of time and delivery option The absence of touch factor, being one of the limitation of online shopping that the customers cannot actually feel the product before making a purchase , which they really enjoy doing in a store. Sensory factors in a human body are very strong and they influence largely any buying behavior. Even though today websites satisfy the sight and sound senses to a large extent with the help of virtual reality, Touch, Smell and Taste are something which cannot be experienced through a website even in a virtual world. It can be observed that around 54 % of customers surveyed held this opinion. Around 46% of customers surveyed think that the virtual experiences offered by the websites are satisfactory enough to make a purchase decision. Hence it is suggested that the websites must make efforts to create more virtual reality experiences. One of the reasons for unsatisfactory online shopping experience is the complexity of the return policy. Many customers specially females worry about the fact that what if they a unhappy with the product delivered to them, easy return facility like in a store is not available to online shoppers to a large extent. Refusal to take back the products delivered or compulsion to buy an alternate product against the unsatisfied product scares 36% customers, preventing them from shopping online. In spite of all this 64% customers are satisfied with the easy return policy offered by most of the websites today. These sites provide the customers offer to get a complete replacement of product, repair facility, reimbursement of expenses incurred by the customer on account of repairing a defective product and also money back policy. Due to all these options today it is observed that customers have a preference for online shopping. The research has helped us to understand that more satisfied customers are online shoppers but still why one would like to go for store shopping is for the level of security it offers. Hence it is suggested that the websites should work on making their transactions more safe and secure. Majority of the customers surveyed express their complete satisfaction in things right from having a good internet access, searching a product of their choice in the website , placing an order , making secure payment, delivery issues, after sales services to return policy of the sites; customers think in comparison to store the procedure is as user friendly as possible. Hence the hypothesis stands proved that there is a gradual shift from store shopping towards online shopping among the customers in Kalyan city. References [1] Anderson E A and Sullivan M W (1993), “The Antecedents and Consequences of Customer Satisfaction for Firms”, Marketing Science, Vol. 12, spring, pp. 125-143. [2] Engle James F and Blackwell Roger D (1982), Customer Behavior, Holt, Rinehart and Winston, New York. [3] Hallowell R (1996), “The Relationships of Customer Satisfaction, Customer Loyalty and Profitability: An Empirical Study”, International Journal of Service Industry Management, Vol. 7, No. 4, pp. 27-42. [4] Hunt Keith H (1977), Business Research: A Practical Guide for Undergraduate and Postgraduate Students, Macmillan Press Ltd. [5] Oliver Richard L (1981), “Measurement and Evaluation of Satisfaction Process in Retail Setting”, Journal of Retailing, Vol. 57, Fall, pp. 25-48. [6] Oliver Richard L (1997), Satisfaction: A Behavioral Perspective on the Customer, Irwin/McGraw-Hill,New York. [7] Rust R T and Oliver R L (1994), Service Quality: New Directions in Theory and Practice, Sage Publications, Thousand Oaks, CA. 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