Developing a scale to measure service quality of online retail sites as perceived by youngsters

By

Ashish viswanath Prakash Prashanth K N Yashwanth krishna School of Management Manipal Institute of Technology Manipal University

The growth rate of Online Shopping is gaining pace in India. 39% during FY 2013 to FY 2016.(E&Y report rebirth of ecommerce in India) World average 6-7 % lacking behind only USA and China The revenue generation

$2.5b in 2009 $6.3b in 2011 $14b in 2012 $24b by 2015.

It is expected to contribute 4% to our GDP by 2020.

cash-on-delivery facility Increasing acceptance of online payment. discounts & offers Strong courier network Emerging logistic providers Busy lifestyle
(Indian Online Retail Market Analysis june 2012

RNCOS report)

24/7 Availabilty (Malhotra & singh 2013)

Internet shopping sites as web retail sites in which customers can browse, evaluate, order, and purchase a product or service
(yoo and donthu 2001 )

Sites can be classified into six retail models (Clark 1997)

services are deeds, processes, and performances provided or co-produced by one entity or person for another entity or person.
Zeithaml et al. (2009, p. 4)

A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer.
(James Fitzsimmons)

Service means different things in different contexts.. Despite more than 25 years of study, scholars in the field of services management do not agree on what a service is. (Haywood-Farmer and Nollet (1999))

Service quality is the single most researched area in services marketing to date.
Baron et al., (2009, p. 167)

Improving service quality is crucial for gaining a competitive advantage (Baron et al., 2009; Parasuraman et al., 1985) Poor quality -> disadvantage potentially driving away dissatisfied customers (Lovelock and Wirtz, 2011)

The conformation to specifications Crosby (1979, p. 15) a measure of how well the service level delivered matches customers expectations. Lewis and Booms (1983) service quality stems from a comparison of a consumers general expectations with their actual perceptions Parasuraman et al. (1988),

Perceived service quality (Zeithaml etal,1990) Concept PSQ Emerges from subjective nature (Rust and Oliver, 1994) Hill (1995) ->co-production>participation/involvement of the customer.

Despite numerous attempts by academics, no single model of service quality is universally accepted (Clewes, 2003) service quality is difficult to define (Parasuraman et al., 1985). Due to the intangible nature of services, making conceptualization more difficult for services than goods (Palmer, 2011)

Generic instrument not sufficient Voss (2000) argued that electronic channels are simply so different from the bricks-andmortar environment - a complete rethink of electronic service quality is necessary.

Competition among online retailers has become fierce (yang et al., 2003) quality of Internet sites will play an important role in differentiating sites. High quality sites will be able to attract more browsers and shoppers quality builds sustainable competitive assets - ( Yoo and donthu 2001)

As identified by previous researchers

120 million people online in 2011 3rd largest 60 percent of web users in India visit online retail sites. 72- 78 % of online population <35 years of age(Mckinsey report 2013) College students are among the most active online buyers (yoo and donthu 2001) 45% of college students went online everyday average spending -$305 per year (educational marketer 1999).

young generation provides an emerging prospect for online retailers in india

(Malhotra & singh2013)

Trend among youngsters Addiction ? Most of youngsters stick to internet for grabbing best deals in online instead of shopping in malls and supermarkets (malhotra & singh 2013 )

Young at heart ???

12 to 25 years (UNESCO)

16-29 years (James (1986) )

15 -35 (mckinsey report 2013 )

16- 30 (malhotra and singh 2013 )

To systematically develop a scale to measure service quality of online retail website from youngsters perspective in Indian context.

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Restricted to Indian youngsters

Not many papers in Indian context Not many previous studies which considers youngsters (exclusively) perception of service quality.
(Malhotra & singh (2013)

Data primary
Type exploratory

Analysis & interpretation- IBM SPSS v. 20.

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1. 2. 3.

Item generation literature review, focus group Data collection pretest - questionnaire The scale was tested for reliability
The item-to-total correlation and coefficient alpha were used to assess the reliability of the scale and improve upon items to improve the reliability of the scale

Data collection 2nd round 5. Factor analysis was used to assess the construct validity of the scale 6. Testing predictive validity
4.
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Literature Open ended questions (Yoo & donthu 2001) Focus group ( jain et al. 2012)

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Questionnaires distributed Total questionnaires received Not used online shopping Valid feedback
Response rate : 51/112

112 51 6 45

Regular shoppers among MBA students (operations, marketing, HR ) of SOM Manipal Sample size : 10 (MacFarlane Smith, 1972; Cox et al., 1976) Duration :30 mins Procedure for analysis video recording (Market Research Society R&D subcommittee, 1979

Total pool focus group / questionnaire- 285

Removing redundancy 91

Screening 68

Items : 68 Latent variables : 16

91 initial items ; Collier & bienstock (2006)

121 items ;Parasuraman et al., (2005)

Hinkins (1995) suggests to include numerous measures in the initial survey to allow for deletion of items after factor and reliability analysis.
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SYSTEM AVAILABILITY PRIVACY SECURITY DESIGN ORDER CONDITION ORDER ACCURACY RESPONSIVENESS
INFORMATION ACCURACY

PROCEDURAL FAIRNESS PERSONALIZATION EFFICIENCY EASE OF USE COMPETITIVE VALUE PRODUCT UNIQUENESS
CORPRATE BRAND EQUITY

Service Quality

PURCHASE PROCESS

Convenience sampling Items (belonging to different groups )were deliberately mixed to avoid bias. Data collection link
Management ,engineering, commerce and

hospital administration, contacts in FB 1 day to fill Response rate : 256/310 Sample size 237 after screening

A 5-point Likert-type scale was used to increase response rate and response quality along with reducing respondents frustration level (Babakus and Mangold 1992).

Mean (AGE) RANGE

23.41 15 - 30

Reliability test Purification of an instrument begins with Cronbachs alpha & item to total correlation Churchill (1979) Cronbach's alpha is the most common measure of internal consistency ("reliability")

Item-to-total correlations < 0.3 Deletion of item for improving cronbachs alpha of latent variable Latent variable with <0.5 alpha unacceptable (george and mallery (2003) )

13 items got eliminated. Now we have : 55 items under 13 latent variable group
Next stage : construct validity - EFA

New questionnaire - 55+ 3 global items distributed to

MIT Mtech students MBA Jewelry Management students MHA students Contacts in FB

Response rate : 236/300 78.6% After screening 228 samples

(yang et al., 2003) - 137 (Yoo and donthu 2001) -

207

Mean (AGE) RANGE

22.41

18 - 29

EFA was performed using principal component analysis and the Varimax rotation (jain et. Al 2012)

KMO measure of sampling adequacy

KMO should be >0.7 (hair et al. 1998) Communalities >0.5 (hair et al. 1998)

Criteria for deletion of items: (jain et. al 2012)

< 0.4 loading on any of the factor

Cross loading > 04. on more than one factor

KMO value 0.865 (significant at .001)

0.80's meritorious Andy field(2005)

All communalities > 0.5

15 factors explained 68.643% of variance

among items.

Items coded as EFF1,INFA4,PERS3,INFA5,FAIR2,EASE6 were having loading <0.4 so could be eliminated

RES4,PERS1,PERS4,EASE7,FAIR4,INFA 2 were removed due to cross loading >0.4 on more than one factor Items were removed and EFA was performed again. link

KMO value =0.865 sig at 0.001 Number of Factors 10 Items coded as INFA1 & EASE3 were removed as its loading was<0.4 (jain et al 2012) Items coded as EASE2,BRAND1,DESG4,PRIV3,SECU4 were removed as it was loading >0.4 on more than one factor (jain et al 2012)

37 items grouped under 10 factors 3 items for global variable quality Link

Validity is established when a criterion external to the measurement instrument is correlated with the factor structure (Nunnally, 1967).
Correlation test each factor against quality

DIMENSIO CORRELATION WITH N SERVICE QUALITY SIGNIFICANCE LEVEL

FACTOR1 .326** 0.000

FACTOR2
FACTOR3 FACTOR4 FACTOR5 FACTOR6

.424**
.193** .296** .338** .404**

0.000
0.003 0.000 0.000 0.000

FACTOR7
FACTOR8 FACTOR9 FACTOR10

.303**
.385** .303** .195**

0.000
0.000 0.000 0.003

The results provide empirical evidence that there are 10 dimensions for online retail service quality. The results of the EFA and predictive validity indicate that the scale is psychometrically sound

This can be used as a diagnostic tool that allows various online retail sites to align the process of service provision with customer expectations. Potentially, this scale will benefit Internet shopping site designers and researchers and can be used to evaluate and track the quality of Internet shopping sites

Link