Studying Customer

Loyalty In Online
Shopping of Apparels
28 February 2013
Research Proposal, Business Research
Methods

1
10

Nayanika
PGP16/327
Section F

Abstract:
This paper examines various factors that affect a customers loyalty towards online shopping of
apparels. At first, the key variables were identified. An analysis of Behaviour Over Time was
done. The key variables that were identified include convenience, price discounts, reliability,
variety, payment mode and trust. BOT graph indicates that there are causal relations between
some variables. A systems model of the problem situation was developed using a participative
group model building process. Analysis of this model revealed some feedback loops among the
variables that influence consumer behavior. The paper also studies the stakeholders involved in
an online transaction. Also, there is a framework of the academic research done in the field of
consumer behaviour in case of online shopping of apparels. It emphasizes the findings of the
study so far and also hints at the limitations of the study and how these limitations can be
overcome. The paper concludes by bringing to light the strategies that online apparel retailers
should make in order retain more customers and increase the customer loyalty.

Introduction:
Online retailing is the trend of todays time. Any online retailer would want to maximize sales
from his website and also maximize the profits. Online retailers like Amazon, Myntra, Jabong,
Zovi, Yebhi, Flipkart would like to maximize their sales and retain more customers.

Problem Definition:
Determine critical attributes of behavior that play an important role in prompting website
viewers to make an online apparel purchase. The problem can be further broken down into
the following specific components:

What is more convenient for consumers: online shopping of apparels or traditional outlet
shopping of apparels?

Is there insecurity amongst the customers in uploading financial details for online
payments?

How can the visual display of a website enhance the shopping experience?

Do price discounts act as an incentive for shopping apparels online?

Problem Structuring- BOT (Behaviour Over Time)

Graph
8 Key Variables That Were Identified:
1.) Online shopping of apparels
2.) Trust in online apparel retailers
3.) Price discounts expected
4.) Online apparel shopping convenience
5.) Competition from brick and mortar stores
6.) Online frauds
7.) Reliability of apparel items
8.) Retail prices of apparels

Explanation Of The BOT Graph:

As online shopping of apparels increases over time, consumer behavior is expected to change
over the coming ten years. Consumers would find it more convenient to shop online as browsing
through the internet is much easier than travelling from one store to another. Online shopping
takes less effort and time. With increasing online activities, online frauds are likely to increase.
Hence, consumers trust in the vendors is likely to reduce with respect to the online payment of
money. Also, consumers perception of reliability in terms of fit, size, color, material of the
apparels would decrease. With online shopping of apparels, consumers would expect higher
price discounts, which would decrease online retail prices. Similarly the competition from brick
and mortar stores would increase due to huge investment in FDIs again leading to lower prices.

The BOT graph:

Online shopping of apparels
Price discounts expected
Shopping convenience
Online frauds
Competition from brick and mortar
stores

Trust in online apparel retailers

hhbfuhreeeretretailers
Reliability of apparel items
Retail Prices

2013

2033

Stakeholders and Stakes Identifying:

The various stakeholders of online shopping of apparels are as follows:

STAKEHOLDERS

STAKES
-Quality of the apparels
-Value for money paid
-Risk of online fraud
-Risk of the fitting of the apparel
-Loss on account of failure of cash on delivery
payments
-Loss of customer and revenue if delivery not done
in time
-Business at stake due to more and more online
shopping of apparels

- Customers

- Online retailers

- Brick and mortar stores

- Courier service providers like bluedart, DTDC etc.

- Online banking service providers

-More business if more online shopping

-Loss of reputation if apparels not shipped on time
-More activities if more online shopping

Stakeholder Map:
Customers

Courier
Service
Providers

Online
Retailers

Online Shopping of
Apparels

Brick &
Mortar
Stores

Online
Banking
Service
Providers

Causal Loops :
Online shopping of apparels

Retail prices

Online frauds

Price discounts expected

Trust in online
apparel retailers
Reliability of apparel items

Competition from brick

and mortar stores

R
Explanation:
Two Re-enforcing (positive) feedback loops are formed which implies that the
system is out of control and can lead to exponential growth or decline. The first loop shows
that with increase in online apparel shopping there is an increase in online payments that
increases online frauds. The online frauds lead to a decrease in trust in the online retailers and
also the reliability of the apparel items. This leads to an increase in the expected price discounts
by the customers, which leads to fall in retail prices of the apparels that again leads to more
online apparels shopping.
Another loop which starts from online shopping of apparels leads to competition from brick and
mortar stores and therefore due to competition there is a price war leading to reduced prices
which again leads to more online shopping of apparels.

Literature Review :
The e-commerce activities picking up at a massive level and increasing apparel shopping has led
to an academic research in order to discover the features of consumer behavior in online apparel
shopping.
Historical research suggests that shopping is an emotional experience for consumers. Studies
on consumer psychology list out three key emotional variables that play a role in online shopping
experience: Pleasure, Dominance and Arousal

[1]

Pleasure is the satisfaction that a consumer

derives from shopping. Dominance is the degree of control in shopping perceived by consumers.
Arousal is the physical sensation during online shopping like feeling relaxed, tired etc.
Online retail businesses can be successful only if they know their target market properly. A lot
depends on how well they position their website and how they get the attention of their
customers.
To deliver a unique online apparel shopping experience is critical to the success of online apparel
retailers. In case of online shopping of apparels, a customer cannot try out the clothes, cannot
touch the material and know if it suits his needs or not.
Online shoppers are quite satisfied with their shopping but still many additional features can be
added to enhance the overall experience and improve the relation between customer and retailer.
These additional features include policies of return if defected, return if ill-fit etc. While online
shoppers are generally satisfied, there is room to improve their satisfaction related to shipping
and returns.[2] This also includes timely shipping of apparels to the customers.
Quick comparisons, easy surfing, easy browsing also adds to the aesthetics of a web page of
online retailers. It should be easy for them to filter their search and get to their required page in a
matter of few seconds.
It is also suggested by the research that unplanned shopping is a huge source of profits for the
online retailers. The factors discussed above influence the degree and amount of unplanned

shopping. Greater the convenience, more sales; greater the comfort, more sales; greater the
enjoyment, more sales. But, the more the customers control on purchase the lesser the sales.
Ease in making payment is also an important factor of online apparel purchase. Some people like
cash on delivery mode of payment, while some like online payment through debit or credit card.
Store loyalty in online apparel shopping is expected to decline. This is because a consumer does
not suffer much transaction cost in shifting from one website to other, which would be the case if
one is moving from one store outlet to another by road. Nevertheless, those who do not enjoy
shopping much would be loyal to the online retailers because even small amount that it costs to
shift from one retailer to another in the form of money as well as the time spent, might keep them
stuck to the same retailer.
The product varieties available online is also a key factor that influences customers loyalty
towards a particular online retailer of apparels. The more the varieties available, the more
satisfied the customer will be while making a purchase online. But, the number of variety should
not be too much because that also deters a customer from taking a decision as he gets confused.
The research suggests that the probability of buying search goods (e.g. books) online is more
than that of experience goods and credence goods (e.g. apparels, shoes).This is a big
challenge that online retailers dealing in apparels have to worry about and take effective actions
to fight the same. [3]
The research also suggests that brand value plays an important part in affecting the customer
loyalty in online shopping of apparels. An item can be categorized as a search good in
traditional store shopping scenario as it is easy to touch and hold the product in that case to
identify its benefits.

[4]

. But, the same item can be categorized as an experience good when

sold online because it becomes quite difficult to collect the same degree of information by just
having a look at it online.
The research suggests that big and popular brands that are sold online experience greater
customer loyalty because they have the essential attributes like trust, reliability and quality

products.

Therefore, big and well-known brand enjoy greater customer loyalty than small

unknown brands.
The visual appeal of the website is very important in case of online apparel shopping. The better
the display of the website, the more the customers will get attracted toward buying apparels from
the website. A user friendly website having advanced interactive features known as interactive
decision aids gains more viewers than a messy and tough to surf website.[5] Two basic types of
interactive decision aids are : (a) Recommendation Agent (RA)

[5]

that provides initial

screening of all the items displayed on a webpage and (b) Comparison Matrix[5] that allows
easy comparisons of selected items to help in making the final buying decision. The research
suggests that they have a very huge effect on consumers decision making.
Any mistakes in the contents of the website can pose a problem for the sales of online retailers
and might lead to loss of customers. Imperfect information will lead to bad impression of the
website and the customer might not come back to the site again. This will lead to moving of
buyers from one website to another.
The colors on the webpage, the ease of accessing items, the time to load a page all influence a
customers buying decision in online apparel shopping. Therefore, the authenticity of
information and correct look of the website go a long way in enhancing the trust in online
retailers.
There is a difference between online online browsers and online buyers.

[6]

In order to

convert online browsers into online buyers the online retailers need to make unplanned purchases
of apparels more frequent and more likely.
Security is another factor that plays a major role in online purchase of apparels. If an online
browser does not feel safe in transacting money online, he would not purchase the apparel
online. He would just browse through and move out. There should be various payment options to
gain every type of viewer as a regular customer. Cash on Delivery (COD) seems to be the best
option for many people.

Research has also been done to study the correlation between shopping orientations (how a
consumer views shopping) and demographic characteristics (age, income, education) with online
shopping.

[7]

Demographics like gender, education background and household income influence

a consumers preferences for online apparel shopping. For example, males like to purchase tools
and wallets, while females like to buy apparels. People who like to read books, buy books.
People with more income have a greater probability of buying online than those with lower
income level.
In addition to that, consumers with convenience i.e. those who look at online shopping as a
time and effort saving activity and recreational shopping orientations i.e. those who look at
shopping as a fun activity have strong inclination towards online shopping.[7]
Other things also include price-consciousness and variety-seeking that relates to the
promotional offers and discounts that are offered as well as the number of varieties displayed on
the website.
Word of Mouth (WOM) is another important feature that affects online apparel shopping
activities and customer loyalty. One person buys a dress online and then when she gets it, she
likes it, recommends the website to her friend. Then her friend orders a dress online, gets it, likes
it, she recommends the site to another friend. This is how WOM helps increasing the customer
base of the online retailers of apparels. Today, social networking sites, blogs etc. play the role of
increasing WOM activities.
Online retailers can make full and extensive use of technology to efficiently collect, organize and
analyze the information from large population. [8]
With a rich background of the available literature on online apparel shopping, we would utilize
this data in improving and further designing our research problem. The research paper would
attempt to find out more direct relationships among the key factors of consumer behavior. [10]

Research Objective and Research Questions

Research Objective:
The overall objective of the research project is to suggest strategies to online apparel retailers to
get maximum number of online viewers to come to the website and convert them into regular
customers and increase trust in online apparels shopping.

Research Questions:
1. How much online apparel sales took place in the last 2 years?
2. What all factors influence a consumers buying decision with respect to the mode of
purchase i.e., online purchase or traditional outlet purchase?
3. How can an analysis of consumer behavior through systems approach help online apparel
retailers to improve their sales?
4. What is the future of online apparel shopping? Positive or negative?

Proposed Methodology and Methods

Methodology:
The research would make use of primary data from apparel shoppers across different states in the
country. Metropolitan cities, tier-2 and tier-3 cities will be covered in the area of research. The
data and information would primarily be qualitative. The data collection methods would include
focus groups, in-depth interviews, and questionnaires.

Methods:
1. In-Depth Interviews:
1. No. of interviews: 10-15 interviews.
2. Demographics:
o Age: 18-40 years.
o Annual household income: 5-20 lakhs
o Educational Qualification: XII standard pass-out.
o Basic internet knowledge.
3. Purpose Of The Interview: To know personal feelings that might not be easy to tell for
a customer, in front of others.

2. Focus Groups:

Number Of Discussions: 4 , each focus group having 7-8 participants

Group Compositions: Two of the groups would have consumers against online apparel
shopping while the other 2 groups would have consumers who engage in online apparel
shopping quite frequently.

Demographics Of The Group Members:

o Age: 18-40 years
o Educational Background: XII standard pass-out
o Annual household income: 3-20 lakhs
o Basic internet knowledge
o Males as well as females
o English as well as Hindi speaking

Purpose Of The Focus Group: Some points that will be talked over will be:
o Online apparels shopping experience
o Level of convenience in online apparel shopping , felt by the consumers
o Price sensitivity of consumers towards apparels shopping
o Choice of one online retailer over others
o Trust in the online retailers
o Relation between education and income level with online apparel shopping

3. Questionnaires:
Preparation of a questionnaire that deals with questions relating to important aspects related to
apparel shopping. It would include questions relating to various determinants of online apparel
shopping. Various measures like Likert scales, Semantic scales etc. will be used for analysing the
likeability of different schemes online to get better responses from customers. The questionnaire
would be floated through hard paper copies as well as through the internet, using Qualtrics
software.

Significance of the study:

The findings of the study would help the online retailers dealing in apparels. Getting a clear
knowledge about what the customers need would help them in deciding upon correct strategies
for their websites functioning. It would help them better design their websites to attract more
customers. The study will help in finding out key insights about online behavior of customers
and help the company to beat the competition.
Also, it would give them an idea as to what sort of payment method is preferred by the customers
and accordingly it can modify its payment options. Adding features like feedback option and
exchange policies would aid in increasing customer satisfaction and help in customer retention.
Therefore, with the acknowledgment of customers needs through surveys and questionnaires
and internet, online apparel online retailers can give their customers the best online shopping
experience and increase its profits and market share.

Limitations Of The Study:

The study is qualitative in nature and does not look into quantitative side of the scenario.
The variables and their relations would not be defined quantitatively. Mathematical tools will
not be used. Therefore, the exact impact of the changes in website features will not be possible to
calculate. The conclusions would be subjective and there will be no scientific proof for it.
The sample selected for focus group might not be correct as in not representing the correct
population as such. This would lead to faulty conclusions about consumer behavior.
Adequate sample size might also not be taken. \

Scope For Further Research:

If further research is done on the project then verification of the conclusions will be required to
be done. The sample size would be increased and inclusion of more informed customers would
be done. Quantitative models should be used and more relations between various key variables
must be identified and verified.

References:
1. Marios Koufaris, Ajit Kambil and Priscilla Ann LaBarbera Consumer Behavior in WebBased Commerce: An Empirical Study, International Journal of Electronic Commerce,
Winter 2001/2002
2. Online Shopping Customer Experience Study- Commissioned by UPS- May 2012-By
Susan Kleinman , comScore, Inc.
3. Kuan-Pin Chiang and Ruby Roy Dholakia, Factors Driving Consumer Intention to Shop
Online: An Empirical Investigation, Journal of Consumer Psychology, Vol. 13, No. 1/2,
Consumers in Cyberspace, 2003
4. A Research Modeling to Understand Online Shopping Intention- Australian Journal of
Basic and Applied Sciences, 5(5): 70-77, 2011- ISSN 1991-8178
5. Gerald Hubl and Valerie Trifts, Consumer Decision Making in Online Shopping
Environments: The Effects of Interactive Decision Aids, Marketing Science, Vol. 19, No.
1, Special Issue on Marketing Science and the Internet, Winter, 2000
6. Factors affecting students attributes towards online shopping- African Journal of
Business Management Vol. 3
7. Elzbieta Lepkowska-White, Online Store Perceptions: How to Turn Browsers into
Buyers?, Journal of Marketing Theory and Practice, Vol. 12, No. 3, Summer, 2004
8. Tulay Girard, Pradeep Korgaonkar, Ronnie Silverblatt,

Journal of Business and

Psychology, Vol. 18, No. 1, Sep., 2003

9. Trends and Data- Internet Retailer- BiggEye
10. Malhotra & Dash, Marketing Research: An Applied Orientation, Sixth Edition, Pearson,
2011

Thank you.