Beruflich Dokumente
Kultur Dokumente
1.0
Introduction
The benefit of the internet as a strategic tool is so phenomenal that it has been a major catalyst to boost internet retailing in the 1990s. Amidst the hype of E-retailing, the dot-com bubble-burst in 2000, veered this mirage toward organisations failures, such as Webvan (Ecommerce-Land, 2004). Yet only the fittest survived and since then, E-retailing has carried its legacy in the name of Amazon or Tesco; ______________________________
Vanisha Oogarah-Hanuman (Corresponding author), Lecturer in Strategic Management and Marketing, Faculty of Law and Management, University of Mauritius, v.hanuman@uom.ac.mu, Tel: 403-7524 HOK YIN Michael Stephen Fook Chong, Senior Auditor, Deloitte Ltd Mauritius, mikastefh@yahoo.com, Tel: 799-1107.
2.0
Literature Review
Consumer behaviour is the successful marketers passion and obsession. The consumer buying process forms the core of the consumer behaviour theory. It is composed of five stages (Kotler and Keller, 2006) (See Appendix-1). An insightful marketer knows that selling a product or service is not the final stage. With a satisfied post-purchase behaviour, the consumer may repeat purchase again and starts a fruitful relationship with the buyer in the long-term (Kotler and Keller, 2006). However, not all individuals engage themselves into such a technique systematically. It depends on the degree of the purchase involvement (Hibbard et al. 2008). Contrarily to habitual or low involvement purchase, a consumer will pass through a complex buying behaviour process for a higher involvement purchase, due to significant difference between brands, products, high risks and high financial requirement (Hibbard et al. 2008). High and low involvement purchases are inherent in online-shopping (Constantinides, 2004).
Online-shopping has been on the lips of many researchers recently and has attracted numerous studies on online consumer behaviour. An outcome perhaps derived from the increasing popularity of internet usage which increased by 362.3% worldwide from 2000 to 2009 (Internet World Stats, 2009). These studies described important factors such as attitudes, perceptions and motivations, which can influence consumer behaviour and dictate the success or failure of internet marketing strategies (Goodwin, 1999). Therefore, understanding and predicting the customers mindset is not an option or a luxury but it is an absolute necessity for survival (Chaffey and Smith, 2008, p.140). Contrary to traditional means, online customers are now empowered due to the information power shift to consumers (Pires et al. 2006, p.946). There has been a revolution from information scarcity to information democracy (Swahney and Kotler, 2001, cited Pires et al. 2006, p.939). Internet consumers have acquired a transcendental role to affect directly the outcome of any transaction and the firms value creation (Hoffman and Novak, 1996; Weiber and Kollmann, 1998, cited Martnez-Lpez et al. 2005 p.313). Indeed, online consumers have been empowered and their actions, if not monitored, can cause the collapse of an E-retailer. 2.1 Factors affecting E-consumer behaviour The stimulus-response model states that the marketing stimuli and the other stimuli will exert pressure on the consumers psychology and characteristics, to affect the buying decision process and the purchase decision (Kotler and Keller, 2006). Constantinides (2004) further developed this model to incorporate the web experience element (figure 2). The latter comprises of functionality, psychological and content ingredients. The web experience is the consumers total impression about the online company (Watchfire Whitepaper Series, 2000, cited Constantinides, 2004, p.113) and the marketer has direct control over it, to influence consumer behaviour (Constantinides, 2004). All the three factors mentioned in the model below will influence consumer behaviour and will need to be analysed separately.
2.1.1 Other Stimuli: Psychological Factors Motivation, perception, learning, beliefs and attitudes are the four major psychological factors that can motivate a consumer to buy a product or service (Armstrong and Kotler, 2000). Motivation Motivation is the driving force to solve an unsatisfied need within an individual (Schiffman and Kanuk, 2000). Chaffey (2004, cited Chaffey and Smith, 2008) identified 6Cs of online customer motivations:
Figure 3 Motivation
Adapted from: Chaffey and Smith, 2008. p143.
Motivation to shop offline or online is mainly founded on hedonic (pleasureoriented) and utilitarian (goal-oriented) factors (Babin et al. 1994.). Onlineshopping confers less hedonic benefits (Dholakia and Uusitalo, 2002) and is thus a deterrent for individuals who requires high social interaction (Swaminathan et al. 1999). Conversely, goal-oriented individuals enjoy the freedom and control of the E-shopping (Bidgoli, 2003). However, hedonic consumers can be attracted online, especially to a specific class of products or hobby-related websites while goal-oriented consumers are attracted towards information, convenience, selection and control (Sorce et al. 2005). Perception Perception is the way someone perceives the world around him. It can be framed by the Technology of Acceptance model (Davis et al. 1989), which includes perceived ease of use and usefulness dimension, to determine information-technology adoption. Ease of use, which is based on hedonic factors, refers to the effortlessness of using a specific process - the internet to produce an outcome (Monsuw et al. 2004). Usefulness, which is based on utilitarian elements, refers to the benefits of using this process to arrive at the desired outcome (Monsuw et al. 2004). Moreover, perception will be influenced by differences between costs, convenience, enjoyment and risks (Huang and Oppewal, 2006). However, perception can also vary among individuals, based on selective: attention, distortion or retention. (Kotler and Keller, 2006). For instance, uncertainty and risks can influence the perception of an individual and deter them online 5
2.1.3 Cultural influence and Social influence Cultural influence Culture is a way of thinking, behaving and feeling that is pervasive among members of a society (Thomas, 1997). It is also comprised of subculture like religions, nationalities, racial groups and geographical regions (Kotler et al., 1999, p.230). Social influence Social factors are composed of family, reference groups and social roles and statutes (Kotler and Keller, 2006, p.176). Reference group The reference group influence can take three forms:
Figure 4 Reference-groups
Adapted from: Carmen, [no date].p.1137.
Virtual community allows the sharing of information across online consumers and it can act as a social motive to shop online, especially for socialisation seeking-shoppers (Allred et al. 2006). Family Family, friend, and colleagues are influential factors toward online-shopping, especially if these reference groups are E-shoppers themselves (Ramus and Nielsen, 2005). Offline-shopping is a womans treasure as it gives her the opportunity for social interaction and reinforcement with her family (Dholakia, 1999). Therefore, this can deter women online. Shopping nurtures a loving relationship within a family (Miller, 1998) and the internet edges out family time (Mcgann, 2005). Conversely, time saved by E-shopping can be spent on social events with the family or friends (Ramus and Nielsen, 2005, p.351). Role and Status Parson (2002, cited Dennis et al. 2004) stated that individuals having a higher role, status and authority will be more likely to shop online. 2.1.4 Web experience factor Propounded by Constantinides (2004, p.113), web experience factor consists of three pillars: Functionality, Psychological and Content factors.
Functionality Functionality is how efficiently the online environment serves the consumer and is sub-categorised further by usability and interactivity. Usability and Convenience Web-usability is the quality and effectiveness of the web in helping the user to reach his purpose with minimal efforts (Nah and Davis, 2002). Internetshopping saves more time than brick and mortar stores (Alreck and Settle, 2002). According to Lohse and Spiller (1998), convenience is in term of: Timely delivery: getting the product on time. Ease and swiftness of ordering online. Attractive online product display. Industry researches reveal that around 60-75% shopping carts are abandoned because of unclear and slow checking out procedures (Business Link, 2009), which defeat the convenience advantage of E-shopping. Moreover, convenience is a questionable point as generally, physical delivery is slow and prevents immediate receipt of certain type of goods and physical inspection is deficient (Bidgoli, 2003). Nielsen survey (2008b) showed that convenience, time saving, avoiding crowds and saving gas are among the top four reasons to shop online. Interactivity Interactivity is made-up of two dimensions (Constantinides, 2004): Interactivity with the E-seller to customise products/services. Interactivity with the web users is about availability of customer service. The latter is a highly sought element online (Ghose and Dou, 1998). Effective after-sales services and lenient refund policies will help to reduce perceived risk level toward E-retailing (Singh, S. 2006). Forrester-Consulting (Internet Retailer, 2008) underlined how by constructing a flexible return policy, about 81% of shoppers would be tempted to buy online and would remain loyal to an E-retailer. However, E-retailers must also ensure that their interactivity is speedy (Novak et al. 2000) and that they provide customer reviews (Lim and Dubinsky, 2004). Nevertheless, some consumers regard absence of human interaction as imposing less pressure on them and less reliance on unhelpful or uninformed sale force (Bidgoli, 2003). Customisation 9
3.0
Methodology
E-retailers business opportunities are so vast that traditional retailer cannot ignore this anymore (Enders and Jelassi, 2000, cited Kennedy and Coughlan, 2006). This research will help answer the questions whether Mauritius is ready to catch this bandwagon of innovation and welcomes the Cyber-island vision. This study will definitely shed light on E-retailing opportunity in the local context and will ascertain the consumer behaviour towards innovative way of shopping. After all, The way we choose and buy goods will, of course, evolve, as it always has... (Anon, 2006, p.21), but is this evolution inherent in the Mauritian consumers? The research objectives of the study are: To identify the readiness of Mauritians toward E-shopping To identify the percentage of consumers familiar with online shopping Determine consumers behaviour towards E-shopping Determine the security and risks implications of online shopping. Hypotheses: 1: Is there a relationship between psychological factors and the intention to shop online? 2: Is there a relationship between gender and perceived risks? 3: is there a relationship between gender and products preference 4: Is there a relationship between gender and social influence 5: is there a relationship between gender and the intention to shop online 6: Is there a relationship between risk and intention to shop online. This study was based on a cross-sectional descriptive research from a survey technique. The target population is the population of Mauritius. A mixture of sampling method had been chosen. Convenience-sampling (none-probability sampling) was used for the pre-test phase of the questionnaire construction. While a quota-sampling, which combines both subjectivity and probability (Singh, Y.K. 2006), was used in the main survey to distribute the sample according to each district gender proportion; due to cost, timing and practicality, a sample size of 150 individuals was deemed appropriate. 11
4.0
4.1
Demographics/ determine the readiness of Mauritian towards Eshopping Internet Access About 90% of the respondents have an internet connection at home. 50% of them have been interviewed through an online-mail survey. Internet access has increased from 13% to 15%, after the recent decrease in internet connection cost and the rising availability of Internet Service Providers (ISP), which amount to nine in 2008 (CSO, 2009c). The average growth rate of internet access amounted to approximately 2% per year (CSO, 2009c). There was about 20% of households in Mauritius having internet access while 29% have a computer at home (CSO, 2009c), Computer and internet are only available to middle-income earners and above, as the lower-income-earners still find it expensive to buy or rent them respectively. Others stated they were unnecessary, as they see television as a better means of entertainment (CSO, 2009c). Internet growth rate is still low and to increase it, further reduction in internet connection cost and computer price are desired. Broadband (rapid) internet connection in Mauritius is about 78.9% among internet subscribers in 2008. However, the percentage of people having access to it is only 12% (CSO, 2009c). E-retailing normally needs a swift internet connection. The latter is more expensive than a dialup connection and this explains why people are more reticent to rent it. Purpose of using the internet The most common purpose of using the internet is checking email, as it is fast, has a worldwide reach and global popularity. Many respondents searched a lot of information online as the web holds lots of easily available information. Searching information involves lots of surfing, hence explaining the latter third position. E-banking and other purposes are low as few opportunities are available in Mauritius.
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Figure 6: Purpose of internet The study came up with the figures below, for the percentage of respondents per purpose. It has been contrasted with a CSO study (2009c). The two studies showed relatively similar figures about the most popular internet purpose. Table 1: Study v/s CSO
The CSO study involved people greater than 12 years old while the current study included those greater than 18 years old. This may explain why CSO having a larger denominator, sometimes had a more diluted percentage. The high entertainment purpose is because the internet itself is an entertainment tool and offers other opportunities as well (music, surfing), for each according to his/her taste. 4.2 Percentage of consumers familiar with E-shopping About 27% of the respondents have shopped online. The few internet access percentage among Mauritians hinders E-shopping. Moreover, the latter is still in an introduction stage of the product-life-cycle, as we still do not have an internet-shopping culture yet entrenched compared to developed countries. However, their shopping frequency revealed that the few people shopping online, do it regularly, as 40% of them have shopped more than 4 times. They are repeated and hence, experienced shoppers in this niche market as sometimes, E-shopping satisfies them better than offline-shopping, due to the benefits it provides. 13
Figure 7: Shopped-online
Age Younger individuals (80% in the 18-35 age-bands) shopped online more than the older people. The internet and E-shopping were born recently; therefore, younger customers are earlier adopters and are more accustomed to using them. Table 2: Age
Intention The buyers on average agreed to the idea of shopping again in the future. No one was less than indifferent about it. This indicates that E-shopping can satisfy customers with the benefits it procures and is thus sustainable. Table 3: Intention
Income & Job status Income range of none was excluded in the analysis. It is because the respondents have shopped through their families earning and including them will distort the mean. Most of the shoppers income-level fell around the Rs20,001Rs30,000 range (mean=4). E-shopping demands an adequate amount of income status due to its cost requirements (for example hardware). Job occupations average was near middle level, due to job position and income range relationship. 14
Gender The buyers were 70% male and 30% female, highlighting the strong prevalence of male in this cyber-field. Research has shown that males are earlier online-shopping adopters than women are, as they are more accustomed to new technology (Bidgoli, 2003, p.14). Location Most of the shoppers were from the districts of Plaines Wilhems and Port Louis, two Mauritian urban areas that are advanced in term of internet connectivity and economic development. There seemed to be a possibility of E-shopping in these kinds of areas. It should be noted that Tantebazar.com has been implemented in Plaines Wilhems.
Figure 8: District
4.3 Determine consumers behaviour toward E-shopping. Physiological (a) Motivation Most respondents were motivated to all of the six stimuli of E-shopping, with the mean of each stimulus being greater than indifferent (more than 3). People were relatively motivated to shop online because of the different benefits it provides compared to offline-shopping. 15
Convenience and the large number of products or services available, were among the strongest stimuli. Saving time and 24/7 accessibility, had motivated many of the respondents. Consistent with other studies, convenience was the highest motive to shop online, especially for goaloriented shoppers (Kare-Silver, 2001). Individuals were motivated by larger panoply of offering as online-shopping is one of the main methods to acquire products/services not available in Mauritius and the internet enables online products comparison and better evaluation as well. (b) Experience Experience is also linked to those people who had shopped online before (R.O-2). About 66% of the people use internet everyday or almost every day. The total percentage of people using the internet at least once per week was 82%. This is consistent with CSO (2009c) which had an 86% figure. The respondents seemed to be having a wired lifestyle and are experienced surfer (Bellman et al. 1999). They connect everyday for the purposes highlighted in R.O-1: information search or surfing. Table 0-6 Internet-usage
Compatible to Montoya-Weis et al. (2003, cited Martnez-Lpez et al. 2005), SPSS cross-tabulation revealed that the greater the internet usage, the greater the intention to shop online. It is due to the increased familiarity and ease of using the internet.
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Figure 9: Experience (c) Attitude, beliefs and Perception The answerers considered online-shopping as not difficult to learn or to use (hedonic perception) (mean=2.52). However, although the mean of Eshopping is value for money (utilitarian perception) bended towards indifference (2.76), a significant percentage of the respondents, disagreed to this idea (43%).
Figure 10: Physiological People generally did not think online-shopping is difficult as most of them are experienced internet-users. However, they were pessimistic about whether it could hold more value for money than offline-shopping. A pessimistic perception about E-shopping can be caused by a high-perceived additional cost or high-perceived risk, as can be seen by the high mean perception (4/5) that E-shopping is risky. Consistent with Dowling and Staelin (1994), this perceived risk appears to deter people online.
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Figure 11: Gender-1 Conversely to Rollins (2005), men did not feel more powerful online than women did. Moreover, women did not have a higher view of E-shopping helping to conquer time limitation than men did. Both were indifferent about feeling powerful online. They either did not realise the consumer empowerment benefits that the internet offers (Pires et al. 2006) or they were not attracted to it. They were rather relishing mostly the convenience benefit as they unanimously agreed that E-shopping helps to conquer time limitation.
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Figure 12: Gender-2 While both sexes agreed that offline-shopping leads to better social interaction, a significant percentage of females strongly agreed about it. Females value social interaction more than men do. Men have a higher intention to shop online while females were mostly indifferent about it, because the latter valued social interaction and shopping as a family ritual, more highly than men did. These statements had been proved in Hypothesis-5 and Hypothesis-4. In contrast, Mastercard (2008, cited China View, 2008) found women are most likely to adopt E-shopping nowadays while men will spend more from it. The two studies difference lay with the divergence of demographics or cultural factors. 4.4 Determine the security and risks implication of E-Shopping of existing & new shoppers. As can be seen in part Attitude, beliefs and perception, individuals agreed that E-shopping is risky. Risk itself is composed of many factors. By breaking it down, this study had pinpointed what are the most feared common risks and why individuals think it is risky. The ranking was done through the Friedman test, which is similar to one-way ANOVA. Its purpose is to measure subjects under different conditions (Pallant, 2005, p.296) or in this study, different risks conditions. Therefore, the ranking of the common fears of online-shopping, showed that individuals categorised them as follows:
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People were considerably perturbed about the riskiness of E-payments, as they were very sensitive to financial risk and personal risk. They feared of losing their money or be involved in an online fraud. The new and unfamiliar environment amplifies this fear. Performance and economic risks were second, as respondents were concerned about the inability to inspect the product and thus the risk of making a poor purchase. These two fears are increased with a pricier purchase. Delivery risk was in term of personal risk involved of not receiving the products after being ordered. Privacy risk came fourth, as they feared their personal information could be exposed to other person, who can usurp their identity or defraud them. No after-sale service was fifth because respondents were more concerned about the risks that may occur by ordering online than the remedy to take after a risk has occurred. As for social risk, section Error! Reference source not found. proved that the interviewees were indifferent by their peers online-shopping customs. Tackling risks Among the most prevalent means of tackling risk of E-shopping are after-sale service and law. This study has similar results to Internet Retailer (2008), as people were agreeable that this would encourage them to shop online. Aftersale service will decrease post-purchase dissonance and will diminish perceived risk of a product being damaged. However, law has a greater influence in tackling risks (mean 3.93/5). A decent legislation with an online regulatory body protecting E-consumers, can reduce part of the risks although not completely, as perceived risks level depend on each individual perception. E-retailers will be afraid to cheat on consumers for fear of legal actions and the latter will have a greater sentiment of security.
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Figure 13 Tackling risk Familiarity and reputation of the seller have a direct relationship with perceived risks. The more familiar and reputable is the E-seller, the less perceived risks of online-shopping. Similar to Park and Stoel (2005); as the customer gains positive experience and familiarity when trading with a trustful E-retailer, he/she will repeat purchase.
Figure 14: Brand and Risk The respondents were indifferent about having a higher price in return for an increased online security. Better online security is a right that E-customers demand rather than to pay for it. Moreover, consumers can buy the same product offline without the increased price.
5.0
Recommendations
The recommendation has been made for E-Marketers and for the government. For E-Marketers 21
The target consumers must be the young population (18-35 age-ranges) as they are more receptive to innovation. Older consumers will require more convincing. Males have a higher shopping potential than females and thus, can be easier to target. By promoting convenience and saving time benefits, females can discover that E-shopping can allow them more time to spend with their family. E-shopping can be useful for some types of products while social shopping can be left for other products. As such, females may be attracted by products that they do not like to social-shop for, or by selling appealing, but unavailable products in Mauritius, at better cost than offline. Marketers can also offer virtual communities, websites and products customised for each gender to attract them. Risk & cooperation with other institutions Product and delivery risk can be decreased by providing an efficient after-sale service, perhaps at no extra cost. E-vendors should provide solid security and display these certificates of securities on their websites to reassure consumers (Allred et al. 2006). They should register themselves to reliable third-party endorsement, such as E-payment security system (for example Verified by Visa) and work with banks to ensure a more efficient and safer financial transaction. Marketers should provide online guarantees, attractive insurance package, customer reviews and fraud protection programme to reduce financial risks and purchase dissonance (Allred et al. 2006). Escrow22
6.0
Conclusion
We can conclude that all of the studys research questions were answered and its results were mostly consistent with other researches. However, more analysis of the Mauritian market is necessary to validate these findings. According to this study, the internet culture is still an infant in Mauritius and not all consumers might be online ready. The future of E-commerce and the Cyber-island vision lie mostly in the hand of the government. Only if it provides the necessary ingredients, can marketers follow suit. Presently, there are some possibilities of online niche marketing especially among the young, educated, online-experienced and male shoppers. The living local examples in the likes of tantebazar.com, lecygne.com or the emerging one like lexpressproperty.com, prove that E-retailing can be sustainable in Mauritius. In a world of intense competition, Blue-Ocean opportunities (Chan Kim and Mauborgne, 2005) exist. However, not everything that shines is gold and companies should not be bewitched by E-retailings hype. Rushing online blindly can lead to another dot-com bubble burst. Mauritius is a small island but Singapore is smaller than it is. Yet, the latter is more developed and has many B2B and B2C E-commerce opportunities. The internet is not a revolution but an evolution of our traditional way of shopping. With the advancement of the 24/7 culture; more and more demanding working life; long end of month queues at hypermarkets; endless traffic jam and the government intention to implement E-government Gateway, it is surely not the last of what we will hear about E-retailing.
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