Online Shopping Versus Traditional In Store Shopping Marketing Essay

Nowadays, popularity of online shopping has been rising rapidly amongst consumers and it is becoming part of their life style. The usage of the internet as a communication and transaction medium in customer markets is increasing fast (Castells, 2000; Hart, Doherty, & Ellis-Chadwick, 2000). Following the globalization for last few decades, every industry had to shift to the new changes or new technologies to compete with each other. Consumers are adopting the changes quite well. One of the big examples would be online shopping (e-commerce). Most of the brands already have their own web sites that selling their goods and services through internet. Also, there are major websites that sells and buys goods such as Amazon.com, EBay etc. Internet shopping is not about selling clothes only, there are various types of things can be sold including electronic goods, jewelries, booking airplane or movie tickets etc. Online shopping can be B2B (business-to-business), B2C (business-to-consumer) and C2C (consumer-to-consumer). Customers believe online shopping as a nearer alternate of catalog shopping or traditional shopping (Ward, 2001). Companies choosing to use the internet to cut their marketing costs, in order to stay competitive in market, they are reducing the price of their goods and services. On the other hand, traditional shopping is still powerful, there are people who do not like to do online shopping. They prefer go to the store by their self and see the actual goods and feel and try them. As a woman who loves to shop a lot, I prefer traditional shopping than online shopping.

Consumers who do not like online shopping has some common issues such as is the web site is reliable or not when making payment, or the product quality is as good as mentioned on the web sites etc. However, for those consumers who like online shopping, it allows them to save time, energy, and traveling cost. Consumers do need to leave their home or office to do shopping, all they need to do is go online search for the product or service they need and then just make the transaction. Today’s competitive market companies are trying to get more customers than their competitors. They are trying to improve their technologies of communicating and advertising and selling their goods and services. Besides the brand’s or store’s websites, now we can use our smart phone to make purchase, there are these applications just as same as using computer to buy items. These applications are very convenient for consumers, whether they are buying the goods or not, they can still see the product and its price so they can compare and even which outlet has that item. Around 75% of the U.S. Internet populations are “online shoppers.  These online shoppers average 2.13 shopping sessions per month and $41.50 basket cost per session (J.P.Morgan 2011)

Summary of literature review

Internet shopping is developing successfully for last decades. Since early 1990s, e-commerce has enormously developed and as a consequence of it, the retail infrastructure of the world has been changed fast (Chen & Chang, 2003). The reason for the research on this topic will examine what are important things to consider when companies operating online stores.

Factors influencing consumers to shop on the Internet

There are some situational factors influencing consumers to go for online shopping than traditional store shopping. There is situation that consumer needs certain specific products, and these products are not available in the country or region the consumer lives. Geographical problems occur quite often, the reason is not every country has the same products, or brands have different products in different countries depending on the consumer’s needs and wants. Another factor influencing is people who are working long hours or those who have very little free time, do not have enough time to go for shopping such as house wives, people who are sick and unable to go to the store find internet shopping more convenient. Internet shopping helps these people to save time and effort. Also, since internet is 24 hours accessible, comparing to the traditional shopping, this becomes one the main drive to go for online shopping. To most customers main attributes of online shopping are convenience and ease of access (Wolfinbarger and Gilly, 2001). Some consumers like to do online shopping because it allows them to look for information about the product or service available in different websites or different brands. Therefore, consumers can compare and contrast the price or feature differences to make best choice for them.

The experiences gained from the online shopping are very important for consumers. The reason is it will affect the consumer’s perception to continue to shop online. Consumers will make specific evaluations, such as given information about the product, privacy, security, form of payment, how he delivery terms work, what are the risks that consumers will be facing, when the items delivered to the consumers, if the products are satisfactory (Burke, 2002; Parasuraman and Zinkhan, 2002; Mathwick et al., 2001). According to the (Shim et al., 2001) if the online shopping experiences resulted satisfactory to the consumers, the outcome leads consumers to carry on to do online shopping in the future. On the other hand, if the consumers past experiences with the online shopping are unsatisfactory, consumers are hesitant to keep on doing online shopping in the future. Thus, this says that companies to provide fulfilling online shopping experiences to keep their existing customers, so that customers will shop on the internet repeatedly (Weber and Roehl, 1999).

Comparing traditional in-store shopping to online shopping

As for traditional shopping consumers simply need to go to store where they can meet the seller and interact with each other to do the transaction. In-store shopping they can browse the products or services they need and want. Traditional shopping let consumers to see the actual product and so they can touch and feel or to try them on before purchasing them it is less risky and tangible. When consumers shop traditionally they get the chance to pay by many payment ways such as cash, credit cards or pay check. On the other side, when consumers shopping on the internet their only way to make the payments will be by credit cards.

There are certain products that consumers need to go the store and buy; it is because they need these items immediately, such as groceries. Normally, shopping online will take few hours to few days or sometimes it will take several weeks to deliver the items depending on the delivery terms of the websites or the distances.

Consumers who choose in-store shopping over the online shopping is because they think that they will be cheated by the seller. It is because there are scammers who are placing fake products or products which are unworthy of the price in this situation the traditional in-store shopping is advantageous than online shopping (Umar, 2004). However, there are several secure companies that provide trusted services for example PayPal and iKobo etc.

When consumers doing online shopping they will have an opportunity to read through the other customer reviews regarding to the product before making the decision. While, the traditional in-store shopping cannot provide customer reviews. This is the one of the online shopping benefits to the consumers.

Marketing mix of internet shopping (e-marketing)

Product – when it comes to internet shopping, the tangibility of the product is not there when consumer making purchases. However, there will be specific information are given to the products so that consumers know what are specification.

Pricing- Most of the time online shopping offers the products cheaper than stores. Online shopping can be very rewarding as every time when customer make a purchase, the system will automatically keep the track. In that way online shopping can provide loyalty programs such as certain percentage of discounts for the product or for the delivery charges, easily than traditional in store shopping. Moreover, consumers are buying directly from the manufacturers, so they are saving money by cutting the cost of intermediaries or retailer.

Place- For the online shopping place would refer to the websites of the manufacturers. It is very important for the online retailers or manufacturers to have well recognizable domain name. Most retailers place their banner advertisements on the other web pages. When the consumers enters to the websites of those shops, the structure of the web pages has to be very understandable, easy to browse through the products, instructions of how to make an purchases have to be clear to the consumers. So the consumers will enjoy shopping on their websites. Organizations do not need to spend large amount of capital on retail stores, branches and staffs etc.

E-Promotion- placing their banner advertisement on other web pages is considered as e-promotion. This is the most common form of e-promotion and banner advertisement should be placed on the web pages that where consumers mostly browse. Another way of promoting online shopping is web public relations. Web public relation manages the placing the articles, news and reviews related to the products on the company’s website for consumers to read. Also, direct e-mailing is very popular form of e-promotions. Companies send tons of electronic leaflets to the consumer.

In order for the company to achieve successful online marketing strategy, e-marketing mix should not be separated from each other. According to the (Abramson and Hollingshead, 1999) there will be more and more consumers will be using the internet to shop in the future. Existing retailing trends prove a change from traditional in-store retailing to an increased make use of the internet shopping (Keen et al., 2002).

Research questions and hypotheses 

RQ1. Is the purchase of goods or services satisfaction affects consumer’s overall satisfaction on online shopping?

RQ2. Whether the trust issues affecting consumer’s motivation to shop on the internet?

RQ3. Does the geographical location affecting consumer to choose shop on the internet over traditional in-store shopping?

RQ4. Does the reliability of the website have an effect on consumer’s willingness to go for online shopping?

RQ5. How does the customer service result consumers online shopping experience?

The hypotheses tested to be are as follows:

H1. There are correlation between customers overall satisfaction and satisfaction of their purchases made through online shopping.

H2. The trust issues and consumer’s motivation to shop on the internet is correlated.

H3. Consumers choose online shopping over traditional shopping, because of geographical location.

H4. Reliability has strong effect on consumer’s willingness to shop on the internet. There are correlation between reliability and willingness of shopping online.

H5. Customer service of online shopping is one of the vital parts effecting consumers experiences through online shopping.

Summary of method

On this research study data collection will be gathered by primary data collection method through consumer survey questionnaires among the consumers. The purpose of survey is to gather detailed information in order to clarify existing phenomena, to classify the problems or to validate existing condition and practices and to evaluate the current situations.

Author used secondary data to in order to do this research proposal.

Primary data research – The primary objective of this type of research is to collect information directly from people (in the field), which should serve to provide data that can fulfill the objectives of the paper. However, collecting data in this way can consume valuable resources, whilst also seeking to ensure the facts and data obtained from the participants is both accurate and unbiased.

Secondary data research – This is one of the most utilized methods to obtain data because it can be found relatively easily and in some cases freely. It is also data that is already published or available either via books, articles and also many online websites and web addresses. When such data is obtained, care must be taken to ensure that it is selected based on its relevance to the topic under investigation, especially data or information that was published or available, and may be considered to be out-of-date at the time of sourcing.

Qualitative research tools – This form of researching endeavors to discover the motivation behind the topic and reasons why the topic is under investigation. Normally this research method is undertaken by means of open-ended questions, yet accuracy is not always achievable as opinions and insight can vary according to the participant’s personal experience and viewpoint.

Quantitative research tool – This quantitative method utilizes surveys from various pre-determined sources, and evaluates the answers from respondents to be elicited via questions that are formulated so as to be structured. The objective of this form of research is to ensure that more accurate and unbiased answers are collected by systemizing the survey and utilizing larger volumes of participants.

Sampling – sampling is a procedure used in statistical analysis in which a determined amount of interpretation will be in use from a bigger population. There are two types of sampling:

1. Probability sampling. Every member of the population has the same and known possibility of being chosen.

2. Non-probability sampling. A lot of surveys are not based on a probability samples, but somewhat finding an appropriate group of participants to complete the survey.

Preparation stage

In this stage survey questionnaires will be prepared and ready to provide to the consumers. In my opinion since the research study is about online shopping versus traditional shopping experiences, survey should be conducted among the consumers in all categories. I will prepare half of the survey questionnaires as a hard copy and the half of it I will be using internet, creating survey and will be sending out to my friends in my home country and other friends around the world.

Data collection stage

Once the survey questionnaires are ready they will be provided to the consumers, as I mentioned earlier half of the questionnaires will be printed out to provide to the consumers. These printed questionnaires will be conducted in Singapore, includes my fellow classmates, other students at MDIS campus and shoppers along the Orchard road. Printed survey questionnaires will be given to the respondents in person, so that means data will be gathered by personal interview. Personal interview refers to researcher will seek answers to a set of prepared survey questions.

Other half will be sending through internet to my friends in Mongolia and other countries. This is also known as mailing of questionnaires. This method refers that researcher and the respondents do not meet in person, researcher will send an e-mail that contains the questionnaires to the consumer with the request to return after filling it up.

The reason the author will be sending the questionnaires through internet first, by sending through internet will reach a huge number of possible subjects and provide them direct admission to the questionnaire. Second, it will recommend an inexpensive and trustworthy method for collecting data.

Quantitative research data will be utilized in the part of the research, as both accuracy and balance will be balance the objective behind the surveys. As for the sampling size, there should be enough number of consumers to fill out the survey questions. So that, there will be even more accurate information will be gathered.

Analysis stage

In this stage author will be analyzing the information gathered from the surveys. In order to analyze the data there will be tables, diagrams and other ways to analyze the data to translate into meaningful findings such as linear regression analysis, correlation analysis and demographic percentage analysis etc based on the design of the survey questionnaires are prepared. The intention of multiple regressions is to learn more about the relationship between a number of independent or predictor variables and a dependent or criterion variable. Correlation analysis is to evaluate the correlation’s strength between the variables.

Implications

When the research is done and the results come out, there will more understanding of consumers of both online and traditional in-store shopping. Also, there will be more understanding of what are the main factors affecting consumer’s positive and negative attitude, perception towards online shopping and what are main reasons that consumers actually choose online shopping over traditional in-store shopping. So the companies can apply to their businesses to improve their goods and services. The study will also show that who the potential users of the online are shopping; this will be examined by respondents demographic information that includes gender, age group and occupation etc.

Limitations

Limitations of the research will be data gathered from the consumers cannot represent the all the consumers around the world, as that is impossible to do so. Also, there will be participants who are going to provide some untrue answers to the survey questions. Therefore, the information gathered from respondents will not be 100 % accurate or true. In the future, maybe try to cover up and widen the sampling size, as a result there will be even more valuable could be gathered comparing to the previous research.