People have many shopping venue in life, such like shopping at shopping centre, high street, outlet village, markets or department stores. However, there is another form of shopping fast developing from recent years — online shopping. Similar with its name, online shopping is the process make customer purchase through internet (Markham, 1998).
Market wire (2009) organization have research and found that the online shopping now accounts for more than 10% for retail sale overall within UK. And on the Christmas sale pinnacle, UK shop online population is set to achieve at 86%. This indicates a 6% increase from 2008, which indicated fast speed of the online shopping growth and also as well as future increase. The traditional shopping such like high street sale suffers as online shopping sales soar. Online sales will keep increasing, but only by attract customer from the high street (Clarke, 2007).
Linn (2007) put forward that online shopping could not increase ultra rapid and would grow slow in next decade. Because there are many people have not participate in online shopping. and many retailers already found their web site, but the online shopping process also inadequate (for example, the IKEA ltd maintain its official website but most of its furniture did not supply shopping online service). This would make a loss of online shopping sales. Although the online shopping sales increase quickly, it still accounts no more than 15 percent of overall retail sales. So the traditional store based shopping is also the mainstream.
So with the different point in this area, following are review of some factors in online shopping and traditional shopping.
Some factor in online shopping and traditional shopping:
The online shopping is typically done at home or office that you could convenient use a computer to search online. Generally, the usual discussion the online shopping takes place on the internet web site, so the location does not play an important role on online shopping (Markham, 1998).
The traditional shopping location expands with the developed business trade and international communication. From the supermarket to department stores, the traditional shopping included many types of venue. No matter the convenience store at street corner, the shopping mall at city centre or outlet centers at outskirts, the traditional shopping has many location choices in the life. The traditional retail is more depend on location (Timothy, 2005).
To compare with the general population, online shopping customer are characterized as having higher education and income and a greater tendency to hold jobs in upper and middle management or work as trained professionals (Kehoe, 1998. Hoffman, 1996).
But Enrique, carla and silvia (2005) comment that the middle classes appear to be the most receptive segment to direct sales and the main users of online shopping were young people with a high level of income and a university education. And the point from Rosenberg and Hirschman(1980) is like traditional shopping, the online shopping as new sales systems are made for everyone. According to provide a wide range variety of products and services for all customers and retail could increase customer that ignore the distinction between social classes.
Schaupp & Belanger (2005) research and identify convenience as a 'fundamental objective' related to online shopping. They are comment that online shopping is easy of searching for trade from a variety of suppliers at home without having to walk from shop to shop. So it would save times than the traditional shopping in retail stores that you must go out the door. And in addition to these convenient, customer could shop online without any time limitation. You can search online for any time that the World Wide Web opened 24 hours, from Monday to Sunday and also full year. It is also convenient to customer share information through chatting or discussion forums to help other make good shopping decisions.
And because the internet wide range, customers are allowed to shop worldwide, achieve great internet sales, and comparison shop all from the comfort of home. Online shopping make convenience of remove the limitation that customer shopped at stores or purchase items must based on what was their locally available (Vasi, 2009).
Underwood (1994) also thinks shopping online at home is safer than spending time in the places that large amount of people congregate. This idea would also apply to avoid large crowds during midseason, such like Christmas holiday. But in this way, it may lose the enjoyment of shopping outdoor. And traditional shopping could make social connections than that shopping independently online.
Kolesar and Galbraith (2000) stated online shopping seeks to provide customers with greater utility in comparison to traditional shopping. With the tool online, it specifically facilitating extended product search and compare product prices and features to make a better decision. But in Bhatnagar, Misra &Rao (2000) opinion, compare prices or features are not enough with shopping. Online shopping could not make customer fully experienced product function. This worried online shopper about received product would not be what they have expected. For example, customer could see the picture of clothes online but cannot try it on to consider if it is fitted (size, colour etc.). However this would not be a problem to traditional shopping. As to solve this problem, online retailers often encourage sales by offering refund or exchange service to make customer convenient shopped.
The price of online shopping is competitive with traditional shopping. Traditional store-based retailer need to burden pesky cost of store rent, inventory, employee wage and other miscellaneous cost. These costs must reflect at the price of their goods. And online shop retailer do not need to pay that expenses, so the good online often show a low price than it in a brick-and-mortar store (Neidorf & Neidorf, 2001).
However, the advantage of price is not always useful. Markham (1998) mentioned that there is a problem of delivery with a small purchase. Customer would not buy the item online when the value is less than delivery fee. And of course the retail also would not pay the shipping fee when online shopper purchased low-value goods. So despite the price of online shopping has obviously advantaged, the delivery cost also could not ignore. From convenient review above, customer could purchase online from all over the world. But the tariff would be a trouble to add the shopping price for customer who shopping outside the country. Ebay.com (has many cases about the trouble of multinational trade tariff. Such like one customer buy a cuckoo clock from USA with a good deal of low price. But when he receives the good, he needs to pay extra fee on UK tax. Then the total fee is much more than the value of clock. So the tariff make a good deal become a bad deal. Therefore, customers need to notice that whether it is worth buying the good online or not.
Privacy and Security
Privacy and security is two top ranked reasons that drive shoppers does not shopping online (Schaupp & Belanger, 2005).
sneddon (2004) point that credit and debit card is still the main method of payment used for making purchases from online retailers. So online customers would concern with credit card fraud and are willing to purchase only products with low levels of purchasing risk. These also are common reason that customer perceived online shopping to be more risk than traditional shopping. So the online payment security is concerned by online shopper. Many online shopping web sites use a number of security measures, such like cryptography and authentication to help keep online shopping transactions safety. Camp (2000) indicated Cryptography can provide authentication and integrity for online payment if properly used. And authentication as the operating that a specific online shopper is authorized to pay a payment. Personal identification numbers (PIN) and passwords are the most widespread types of authentication. And with the promotion of E-bank security technology and the trust of high reputation online shop, the other factor like privacy would more important than online security.
Fernandez (2001) stated that privacy of personal information is important perceived risk for most online shopper. Customer shopping online would put some personal information (credit card information or telephone number, etc.) to web site. If the site leaks this information, it would cause puzzle (spam or telemarketing, etc.) to customer. So, many online shoppers do not trust the privacy of the Internet and are concerned with their credit card frauds and uses of their information for other purposes. The privacy problem also occurs on traditional shopping when the brick-and-mortar stores collect customer information (such like when customer applies the loyalty card). To response this risk, many retailer promise not to use customer information for other purposes without promise.
Ghosh (2001) think that Internet-based trade transactions would increase of 25 percent of all retail transactions in the next decade; therefore it is need online retailers to continue to provide a secure, private and trustworthy shopping environment for their customers.
The traditional shopping and online shopping have different models of retailers communicate with customers.
The traditional shopping business is built on “one to one” and “one to many” model. That means customer is connecting to one business by the company introduce the product offered. And with the mass media developed (TV, newspaper, etc.), customer could connecting the products in many way.
The online shopping business reflects the “many to many” model. The internet provides more interactivity than mass media, and this make more communicated with more customers to products (Salim, 2008).
The factor of online shopping trend is important. Nielsen (2008) report that the trend of people finds website by word of mouth become a primary way than that use a search engine. People find online shopping provides more control and freedom than traditional shopping, and the trend of it would be very routine and predictable that great attract more customers.
Online shopping sales increase quickly from these years. It reflects many advantage of shopping online whether to the society or customer individuals. If you have a computer or other electronic that could access to internet and a credit card, then you could shop online without any time limitation. It is also convenient to you to compare prices or features among so many sites and help you make best shopping decision. Although the perceived risk is existed, choose trust site and careful use would bring you best online shopping experience.
And traditional shopping as the long history shopping format has many advocator. The variety shopping venues provide many choice to customer, it make customer enjoy the brick-and-mortar stores shopping experience. Traditional shopping could satisfied customer’s social communicate need (to enjoy shopping with friend or family). It is safer than online shopping to pay and could make customer immediately try the product function to avoid complex refund or exchange.
Dawson (2000) agree that online shopping will become a significant force in satisfying customer market over the future, and it make online shopping as an important competitor to traditional shopping.
With the World Wide Web developing maturely and the increasingly of E- commercial, online shopping become an important behavior in people’s life. From the retailer’s view, they would attach importance to establish and improve of online stores. This could help retailer avoid sales and customer losing from online shopping and traditional shopping campaign. Under the trend of shopping behavior, retailers should adjust their sale strategy in order to attract more customers and earn more profit. So, research on discovering a better method is needed.
The overall aim of the project
to found the factors affecting the competitive advantage of online ships over traditional shops
* To find significance of online shopping
* To identify what drive people to online shopping
* To increase retailer’s online store quality
* To research on customer shopping behavior’s future trend
* To research out factors that drive people to online shopping
* To identify online shopping’s advantage and disadvantage
* To identify traditional shopping’s advantage and disadvantage
* To find out the reason why some people do not shopping online
* To find the lack of online shopping in this period
* To find out what make online store attract customer from high street
The purpose of the project is to identify online shopping’s competitive and how to improve it for an online retailer to confront with traditional shopping. So in the project, the key aspect is to find out factors drive people to shopping online and analyses them to relate other dependent variables.
Among the many factors that drive people to online shopping, I found that whether or not customer choose to shopping online was affected by the main factors of location, convenient, pricing, privacy and security. Schaupp & Belanger (2005) identify that convenience would be a ‘fundamental factor’ influence customer to shopping online. Is it easy to get touch with retail trade? Is it save time compare with traditional shopping? Is it could buy product without area limitation? If customers agree with questions, then they would get reason to shopping online. And in the other hand, they could continue keep their shopping behavior. In the convenient factor, customer could easy search for deal from a variety of retailers at home. It saves time compare with traditional shopping that need have to walk from shop to shop. And without time limitation and area limitation, shop online would be a pleased choice. As explained above, convenient is probably the most important factor in determining customer to shopping online.
Another variable influenced customer whether or not to shopping online is privacy and security. Fernandez (2001) point that privacy and security are rank first two reason that drive shopper not to shopping online. Varied with the degree of customer’s confidence and faith, whether or not to shopping online is changed. And mail factors discussed also affect the online store’s quality, customer loyalty and so on.
In order to collect useful data to fulfill with the project individual objectives, I will use qualitative research method to get primary and secondary data sources. The primary data need design a questionnaire to collect and I will use grounded theory to analyse out secondary data.
· Questionnaire design
The questionnaire’s population was defined to the shopping people, no matter the online shopping customer or traditional shopping people. I will put the questionnaire on online store website or some BBS forum website to get online reply and put out some questionnaire on traditional shopping venue (such like shopping mall, high street). While the population could usually be defined by a single statement, the sampling procedure needs to be described in extensive detail (Walonick, 2005). And because the wide range population was defined, I will choose random sampling method to select representative sample. The sample size designed to get at least 50 copies of responses.
At the top of questionnaire an instruction about my research aim and ground is needed. I will describe the shopping manner and its trend in brief and write my aim ‘to identify factors could improve online shopping competitive power to confront with traditional shopping’ to ask people complete my questionnaire. At first step, the questionnaire will collect basic information of representative sample, Such as their sex, age, education level and monthly income information. Then, using unbiased and clear word design the question under the thought of project objectives. Such like to ask people the preferred manner of shopping and list some factor let people choose why they are preferred. Or list the barrier of the reason people do not shopping online. At last is the opened question to ask people comment what need to improve on online store now.
After I finished collecting questionnaire responses, the analyses process would begin. I will use statistic analyse tool to process quantities data, for example to use histogram to express sample’s monthly income distribution condition or find if there is relationship between several variables. Then I would analyse the opened question part and try to summarize some useful information.
* Grounded theory analyse
In this section, I will collect secondary data to consolidate my fundamental of theory ground. Secondary data included books, periodical, related on-line data and many source. It could save time and cost to acquiring useful information (Sekaran, 2000). So a literature review is required.
According to literature review, I could find literature systematically and efficiently. I could easily find previous researcher’s related literature to improve my research and cooperate with my questionnaires. Horrigan (2008) had research that conveniences, save time, get bargained as reasons people would embrace online shopping. And worried over security, frustration, complicated are the barriers of people to online shopping. So, I could develop ideas that how to improve online store to decrease customer’s worry about those barriers inductively by other researcher from data bank.
As to make the research working efficiently, I design a timetable to operating every process.
This would show a gantt chart format next page :
The detail of every activity
Activity 1: Choose research topic
Activity 2: Research on related literature and information
Activity 3: Doing first assignment--- literature review
Activity 4: Decide research title
Activity 5: Doing second assignment--- proposal
Activity 6: Design questionnaire
Activity 7: Distribute questionnaire
Activity 8: Collect responses
Activity 9: Analyses data
Activity 10: Doing third assignment---quantitative financial research
Activity 11: Doing final report
· The problem and overcome
The project design to begin at September 2009 and end at 22nd march 2010, I forecast some problem during these period when conducting some process. At beginning, I quickly choose out the topic with exploring of any interesting area. But after that, I confused about first assignment of literature review. In my topic area of online shopping, there are so many literatures are found in library or online source. It is very mess and variability to me to set out the research title. To overcome this problem, I use ‘key word’ analyses (cooper, 1995) to get relevant data and discuss research title with my supervisor.
And the next problem was the method taken. Firstly, I want to use interview method to get contact with specific company manager and staff. But I found it is very hard to get touch with them, the email send them to ask an appointment to interview are all no reply. So I decide to use questionnaire method, it a quite easier way for people to response than make an interview. Then the envisage problem of low responses was appeared. Because this is a nonprofit project, so I could not provide any benefit to research samples. Some people would not response the no benefit questionnaire. As to solve this problem, I will distribute it in several places including at shopping mall and online websites. In the shopping mall, I will ask friends as a group to help distributing questionnaire and get responses. And the research sample is free to decide whether or not to response us. I think it is an efficient method to get responses that without require research sample to send it back and this also the cause of low responses rate. And at online website, I will put the questionnaire to some biggest online shopping website forum, like amazon.com, play.com or ebay.com. The people who have seen this questionnaire and response it at forum will become my research sample. And I will keep this process long time leads to get enough responses to analyses.