Acknowledgement
Abstract
CHAPTER
1. Introduction
2. Literature Review
2.1 Online Shopping
2.2 Motives to online shopping
2.3 Barriers to online shopping
2.3.1 Perceived Risk
2.3.2 Online shopping experience
2.4 Underlying framework
2.4.2 Technology Acceptance Model
2.5 Product Involvement
3. Methodology
3.1 Research Instrument
3.2 Sampling
3.3 Measurement and questionnaire design
3.4 Validity and Reliability
3.5 Data analysis
4. Findings and Discussion
4.1 Questionnaire results and analyses
4.2 Online behaviour
4.2.1 Internet use
4.2.2 Online clothing purchases
4.2.3 Online purchases
4.2.4 Intention to purchase clothing online
4.3 Influence of gender
4.4 Evaluation of online shopping
4.5 Testing hypotheses
4.6 Summary and Discussion of findings
5. Conclusion and recommendations
6. Bibliography
7. Appendices
7.1 Appendix 1
7.1.1 Theory of Reasoned Action
7.2 Appendix 2
7.2.1 Questionnaire (piloted version)
7.2.2 Questionnaire (final version)
7.3 Appendix 3
7.3.1 SPSS Findings: Descriptive Statistics
Model 1: Technology Acceptance Model
Figure 1: Age groups of the sample
Table 1: Gender and age groups of the sample
Figure 2: Frequency of Internet use for private purposes
Chart 1: Online clothing purchases in the last year
Chart 2: Online purchases in the last year
Chart 3: Intention to purchase clothing online in the near future
Table 2: Chi-Square: Association between gender and online clothing purchases
Table 3: Crosstabs: Association between gender and online clothing purchases
Table 4: Chi-Square: Association between gender and intention
Table 5: Crosstabs: Association between gender and intention
Table 6: Correlation between intention, prior online purchases and prior online clothing 32 purchases
Table 7: Correlation between intention and perceived usefulness
Table 8: Perceived usefulness: “Online shopping enables to save money“
Table 9: Correlation between perceived ease of use and intention
Table 10: Correlation between intention and perceived risk
Table 11: Correlation between intention and product involvement
Table 12: Correlation between shopping frequency and product involvement
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This dissertation is a study in the area of e-commerce. The aim of this study was to examine the adoption of online shopping and online shopping for clothing in particular and factors influencing the intention to purchase clothing online. A quantitative research method was used and a questionnaire designed on the website www.surveymonkey.com and then distributed by sending out the link leading to the survey via facebook and emails. 94 useful questionnaires were gathered from female and male UK students. SPSS 17 was used to analyse the collected data by conducting chi-square tests and Spearman’s rho correlation tests to examine the relation between different variables.
The constructs of the technology acceptance model (TAM) were used as a framework and basis for this research and were extended by further constructs. Therefore, the impact of perceived usefulness, perceived ease of use, prior online shopping experience, perceived risk and product involvement on the intention to purchase clothing online was analysed. Perceived usefulness, perceived ease of use and prior online shopping experience had positive effects on the intention to purchase clothing online. Perceived risk had a negative effect on the intention to purchase clothing online. These findings supported the hypotheses. Other than hypothesised, clothing product involvement did not have a significant positive effect on the intention to purchase clothing online.
The characteristics of the Internet offer new ways for consumers to interact not only with one and another but also with firms and the online marketplace (Gay et al., 2007). A constantly growing number of consumers shop online nowadays or gather information about products and services online which leads to a new perspective for many businesses (Demangeot and Broderick, 2007). The number of people that shop online and the amount they spend is constantly on the rise due to an increasing number of online retailers and the acceptance of the online medium as a channel to shop. Since 2005 the market in the UK has grown 25% per year. In 2009 online sales reached about 17.8 billion pounds in the UK, accounting for 6.6% of all retail sales (www.academic.mintel.com). UK consumers are among the most enthusiastic online shoppers in Europe (www.acadamic.mintel.com). It is therefore becoming increasingly important for UK online retailers and marketers to develop an in-depth understanding of consumers’ attitude and adoption of the Internet as a shopping channel.
Online shopping differs significantly in its characteristics from shopping in a traditional way.
Some of these characteristics may appeal to consumers and therefore contribute to consumers’ intention to shop online, while other may alienate them. This depends on a high extent on consumers’ psychographic backgrounds that can affect their attitudes towards online shopping (Xu and Paulins, 2005). Any aspect of consumers’ motivations, perceptions, beliefs and attitudes that might influence their online buying behaviour and their intention to make a purchase can be defined as psychographic factors and are crucial as they directly influence the process of consumer purchase behaviour and are the tools for people to identify their needs, obtain information, develop thoughts and opinions and take actions (Doherty and Ellis-Chadwick, 2010; Wu, 2003). That signifies that people form attitudes based on their motivation and perception, that in turn influences their decision making process. However, simply the attitude towards something is not necessarily a good predictor for actual behaviour as people are constantly influenced by external factors such as opinion of peers, personal experiences and information from new media (Wu, 2003).
To consider significant factors that can influence buying behaviour with regard to online shopping, this research is based on the technology acceptance model (TAM) with the aim to analyse the beliefs and attitude of consumers towards online shopping, the adoption of the Internet as a channel to shop and the resulting intention to purchase clothing online. The TAM was originally developed by Davis (1989) and is one of the most widely used frameworks to test technology acceptance (Yousafzai et al. 2007).
This model is not widely used in the field of marketing. However, since it was developed from the theory of reasoned action (TRA) that defines the links between a persons’ attitude, subjective norm, intention, and behaviour (Fishbein and Ajzen, 1975), it is well grounded in an established marketing and social psychology theory. Thereby, it connects the user acceptance of an information system with consumer behaviour which matches the context of online shopping.
Moreover, since this research focuses on clothing as a product category it will be analysed how consumers’ product involvement influences the intention to purchase clothing online.
Thereby, it is of special interest how consumers who are highly involved in the product category and to whom clothing is personally important, adopt the Internet to shop for clothing. According to Goldsmith and Flynn (2004) fashion and clothing involvement is not related to online buying. Moreover, they state that this outcome is due to the type of clothing that is available online and a lack of variety of fashion clothing online. However, the rise of online fashion stores (www.acadamic.mintel.com) since the release of their research in 2004 could have changed this outcome which justifies the field of research.
Nowadays, clothing is one of the most purchased products online (www.acadamic.mintel. com) and studies about factors that influence the attitude towards online shopping for clothing is limited up-to-date. The underlying research questions of this study are:
(1) Which factors influence consumers to purchase clothing online?
(2) How do consumers evaluate the Internet as a channel to shop?
(3) How likely will consumers use the Internet to purchase clothing in the near future?
To be more specific it will be analysed whether several factors such as prior online shopping experience, perceived usefulness, perceived ease of use, perceived risk and product involvement have an effect on the intention to purchase clothing online. This will be tested through the following five hypotheses:
H0: Prior online shopping experience has no effect on the intention to purchase clothing online.
H1: Prior online shopping experience has a positive effect on the intention to purchase clothing online.
H0: Perceived usefulness has no effect on the intention to purchase clothing online.
H2: Perceived usefulness has a positive effect on the intention to purchase clothing online.
H0: Perceived ease of use has no effect on the intention to purchase clothing online.
H3: Perceived ease of use has a positive effect on the intention to purchase clothing online.
H0: Perceived risk has no effect on the intention to purchase clothing online.
H4: Perceived risk has a negative effect on the intention to purchase clothing online.
H0: Product involvement has no effect on the intention to purchase clothing online.
H5: Product involvement has a positive effect on the intention to purchase clothing online.
In this study business to consumer (B2C) e-commerce will be viewed as the adoption process and will be applied to a modified version of the technology acceptance model (TAM) to investigate the adoption of e-commerce and the potential resulting intention to purchase clothing online. By applying the model in this research, online shopping will be analysed from different viewpoints.
While the numbers of online shoppers have been constantly on the rise, research on what factors influence their behaviour and which factors have the strongest effects on consumers, are limited up to date. This however, puts also a constraint on this research. Since the Internet is a very complex and continuously evolving medium with very fast changing market trends, literature used in this research regarding e-commerce and consumer behaviour in the online marketplace, can partly be limited in terms of its topicality.
Within the literature review an overview of various subjects related to the research is presented. First, an introduction to the Internet as a means to shop will be given and advantages and disadvantages will be discussed and linked to the underlying framework for this research. Based on the literature review five hypotheses were developed concerning factors that influence consumers’ intention to purchase clothing online.
There has been a clear accordance in prior researches regarding the attractive attributes of Internet shopping compared to traditional shopping which include convenience, time- and money-saving, easy product accessibility, to select from a wide range of alternatives and the ability to shop 24 hours a day (Kim and Kim, 2004). Consumers don’t have to go to stores to find the products they want to buy, they can compare products by browsing through websites and in addition they don’t have to face salespersons, which can make the buying process more private. This anonymity can be of special value when consumers want to shop for sensitive products (Perea et al., 2004). Furthermore, the Internet provides consumers with more access to products and selection due to unlimited physical boundaries (Kotler et al., 2009).
Beyond that consumers gain more power by getting access to more information about products, companies and competitors through their websites and online quality rating systems by other consumers. In this way consumers can extend their competency in making the right decision while they are shopping (Perea et al., 2004, Smith and Rupp, 2003).
The growth of online shopping is also an outcome of consumers’ changing and more efficient use of time and the rising familiarity with computers and the Internet (Kim and Kim, 2004). About 82% of the population in the UK have access to the internet today, a rise of around 235% from 2000 to 2010 (www.internetworldstats.com).
At first sight, these attributes seem to give online retailers a great advantage over traditional shops. However, even if the convenience and selection benefits are large there are clearly some deterrents to online shopping. First of all, shopping from home can be perceived as more risky than shopping in a traditional way.
Sorce et al. (2005) supported the view of Bhatnagar et al. (2000) who defined two types of risk: financial risk and product category risk.
The first one concerns privacy and security factors and refers to the consumers fears about the security of financial information online regarding transaction security and misuse of bank details (Goldsmith and Flynn, 2004).
Perceived risk depends also on the type of product. In the case of fast – selling products like books, the information one can get online may be sufficient to decrease the risk that is involved in the buying process. Some products are more suitable for online retailing than others which depends on the characteristics of the products being marketed (Kim and Kim, 2004). Consumers’ risk perception is especially high when consumers want to `feel and touch` the product before they make a purchase. For products like clothing that are of sensory nature, consumers like to examine the product and assess their quality, colour and design. Also, fit of clothing is very important and the inability to see, examine and try the product on contributes to the high level of risk that is associated with online shopping for clothing (Ha and Stoel, 2004; Hansen and Jensen, 2009; Sorce et. al, 2005). This risk level can be lowered when there is little inconvenience and costs involved when returning the product by either cheap or no shipping back costs or the possibility to return the product in a store (Smith and Rupp, 2003). Due to improvement of technology and a significant rise of online shops, products that thought to be only saleable in a conventional way, in touch-and-feel environments, do now enjoy more widespread and higher sales (Kim and Kim, 2004). The online market for clothing and fashion has seen exceptionally rapid growth with a rise of 21% in 2009 and large numbers of new entrants to the virtual market place (www.academic.mintel.com). Most traditional fashion retailers like e.g. H&M, Next, Top Shop, M&S have launched online shops, following the multi-channel concept with a strong brand appeal. Multichannel retailers are taking the main part of the online clothing market with around 44% in 2009 (www.academic.mintel.com). Besides, online retailers are undergoing improvements in terms of service proposition, with free and next-day deliveries, easier guidance through their web shops and trend tips, attempting to make online shopping not only easier but also more interesting, thereby trying to enhance the shopping experience of customers online (www.academic.mintel.com). Despite that, many people continue to regard shopping and especially clothes shopping in a traditional way, as a leisure activity and want to buy clothes personally so that they can try them on, try on different outfits while interacting with other people. This will limit the growth of e-commerce at some point (www.keynote. com).
After introducing the Internet as a means to shop, the next part will further analyse motives and barriers to online shopping in more detail.
Like in the traditional shopping context there are two main motives for consumers to engage in online shopping which include utilitarian and hedonic dimensions. People either shop for fun (hedonic) or have a specific goal in mind (utilitarian) (Wolfinbarger and Gilly, 2001). Hedonic shoppers, for example, are motivated by their personal interest and their resulting involvement with a specific product category that makes them browsing through web-sites and online stores while he or she regards online shopping as an “enjoyment”, thereby looking for a “product specific online shopping experience” (Sorce et al., 2005, p.123).
In contrast to that, utilitarian shoppers want to achieve their shopping goals with a minimum of effort and irritation and are mainly driven by four motives which are informativeness, convenience, product selection and better control over the shopping experience (Sorce et al., 2005, Perea et al., 2004).
Concerning this matter and according to Park and Kim (2003), wide selection of products can increase the probability that needs of consumers will be met and satisfied.
Even both, hedonic and utilitarian motives have been identified in the online shopping context; Wolfinbarger and Gilly (2001) also suggest that online shopping is more likely to be focused and goal-orientated than experimental, therefore rather utilitarian than hedonic.
This is something marketers need to be aware of, as the competition in e-commerce is, according to Zhou et al. (2007), intensified which results in the fact that it becomes crucial for online retailers to understand the antecedents of consumer acceptance of online shopping. Such knowledge is essential to customer relationship management, which has been identified as an effective business strategy to attain success in the electronic market.
With regard to Wolfinbarger and Gilly’s (2001) thesis, that online shopping is mainly goal orientated there is considerable research to support their conclusion. Parsons (2002) portray consumers who shop online as time-poor and to be averse to traditional shopping. Constantinides (2004) identifies convenience as the main motivator for online customers to interact with online retailers whereby convenience was associated with easy and quick information access, browsing and settling of the transaction.
In line with that, Koo et al. (2007) point out that utilitarian benefits such as information quality, range of products, and customer service, have a stronger effect than hedonic aspects on the evaluation of attributes and the intention to revisit a web store.
The Internet facilitates utilitarian behaviour as product information is widely available and search costs are significantly reduced, allowing shoppers to compare products and prices more efficiently, as they can just click from one online retailer to another with global reach of the Internet (Kotler et al., 2009) In addition to that consumers can make use of websites that have the function to compare prices of different online retailers (Chiang and Dholakia, 2003; Kotler et al., 2009).
Another reduction of time and cost through online shopping can be found within the respect of travel. Both time and costs are practically removed for consumers who can shop (provided that they have access to the Internet) from anywhere at anytime (Chiang and Dholakia, 2003).
To summarise one can say that the main reasons why online shopping has a more appealing affect on utilitarian shoppers are; more freedom in terms of timing and the attributes of online shopping such as convenience, accessibility, rich product assortment at a glance, as well as availability of information and the reduction of search costs (Wolfinbarger and Gilly 2001; Chiang and Dholakia, 2003).
In contrast to this, consumers with a hedonic shopping tendency were found to be mostly attracted to visually appealing online shopping sites that were easy to navigate as such websites are able to support relationship building to generate some kind of community for consumers (Wolfinbarger and Gilly, 2001).
Apart from the motives to online shopping stated above for both utilitarian- and hedonic shoppers, there is, according to Wolfinbarger and Gilly, 2001, a general lack of impulsive shopping. This is due to the inability to get the products right away and the fact that returning later to the web store without extra effort is possible. Consequently, consumers can put off a purchase when they are uncertain and come back to complete the buying process at a later date without going through the hassle of going back to a store.
Even though this can be regarded as a negative factor for the marketers, since it keeps shoppers from buying products impulsively, e.g. directly, it has a positive effect for the consumers as they have more time to think about their purchases which enables them to save money that they might would have spend on an impulsive purchase in retail stores.
As already mentioned before, a significant barrier for many e-commerce transactions is that of perceived risk. Andrew and Boyle (2008) supported the view of Mitchell (1999) on the power of perceived risk, saying that consumers often rather try to avoid mistakes by not taking a risk than to maximise utility when making a purchase. That means that even when consumers believe that they could take a benefit from shopping online like for instance cost-savings, they could yet refuse to use it, if they perceive the Internet to be a risky medium for shopping purposes.
Regarding the uncertain context of online retailers, it is obvious that purchasing online can be perceived as risky. The characteristics of the online environment and the entailed uncertainty of an open infrastructure for transactions have made risk an unavoidable part of e-commerce (Pavlou, 2003). Online transactions are much more anonymous and impersonal, therefore building trust to minimise risk is crucial for online vendors to succeed and to be adopted by consumers. Consumers have to rely on what they see as they have to come to a purchase decision based on the information they get on the website of the online retailer. Thus, the higher the trust a consumer has in a website, the lower the barrier of a consumer to make a purchase (Barnes and Chen, 2007).
Privacy issues are high barriers for consumers to make use of online services as they are not willing to give up full control regarding their own behaviour. Internet transactions are operated over a public domain and issues such as network security, transactional privacy and security can lead to high concerns of consumers due to a loss of control. Moreover, privacy policies of online retailers can vary widely, from those who use collected data only for internal purposes to those who sell customer information (Grewal et al., 2004). Consumers want to fully understand for what purposes data is collected, how long it will be recorded and if there are any consequences (Pikkarainen et al., 2004). This is due to non-transparent web site policies often not possible.
Perceived risk of online shopping is very different from that of traditional shopping. Consumer’s inability to value the quality of products directly on the spot, the lack of social contact and interaction with other people, the discomfort for consumers who are not familiar with using the Internet and the security of payments and personal information can all be causes for risk perception of consumers (Martin and Camarero, 2009).
However, the perception of risk is not the same for all consumers. When scholars refer to the risk involved in Internet shopping, they talk about the perceived risk rather than the objective risk. Consumers normally decide intuitively whether something is risky or not. This judgement is normally affected by previous experience, the price of the purchase or the level of involvement and can therefore vary significantly from one person to another (Harridge-March, 2006). While some buyers find e-commerce risky and perceive it as an impractical way of buying, others value the advantages of e-commerce for their shopping purposes such as the ease of information searching and of comparing prices and products (Martin and Camarero, 2009).
As with the traditional way of shopping it is important for marketers to gain satisfaction and trust in the online context. Online retailers have to create trust to develop their commerce and the loyalty of consumers. This however is more difficult than in an offline context. First of all, online retailers have to face fierce competition as consumers have a large choice between alternatives and can easily switch from one web store to another that offers the same or similar products. Competition does not longer only come from a store around the corner, but from thousands of online stores from all over the world (Solomon et al, 2006).
Aspects such as web site quality, customer service and satisfaction with previous online shopping experiences, are crucial in decreasing the risk that consumers may perceive online (Martin and Camarero, 2009).
Another problem that is associated with shopping online is that it does not offer the shopping experience that the traditional way of shopping does. Many people regard shopping, especially shopping for clothing, as a leisure activity and value social interaction and the experience aspect (Dennis et al., 2002).
In agreement with this, Hansen and Jensen (2009) state that shopping acts that are related to clothing, are often experienced as a fun activity and consumers may not want to give up this shopping experience that they get when they buy clothing in a traditional way. Therefore, a lot of people who have all premises to shop online (Internet access at home, the knowledge of how to shop online) may yet refuse this means to shop because they don’t want to miss the shopping experience and rather examine the products before purchase, try them on and interact with other people (Dennis et al., 2002). According to Brown et al. (2003) people who do not value this shopping experience and regard shopping as stressful and not as a fun and leisure activity, would therefore rather purchase clothing online.
The link between shopping experience and online shopping will be further discussed in the chapter about product involvement.
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