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It has been a key focus area for digital retailers in an attempt to make Indian consumer comfortable to shop online. For quite few years, almost all online retailers were dependent on third party logistics companies for delivery to customers. Now many have started delivering the orders themselves. The number of courier companies has also been rising, with about covering all the pincodes of the country. The cost of logistics is high due to lack of good quality infrastructure. With creation of its own logistics, the retailer can benefit by higher profits; competitive advantage over local and new global entrants; lastly, it can open its delivery options to other retailers and charge them e.

Amazon encouraging small companies to use it marketplace platform and cloud services. Suppliers have changed their supply chain from delivering to shops to creating a full strategic operational supply chain cycle. Also a major population in India did not have a debit or a credit card. COD allowed customers to make payment when the items were delivered to them. Furthermore, even those who did possess a card, preferred to shop via COD.

But unlike electronic payments, collecting cash manually is expensive, laborious and risky. The current need is to make credit or debit card more popular as payment option. Customers can easily navigate to various websites in case they do not find the product. The problem becomes worse in places where broadband speed is very slow.

About 40 per cent would not wait for more than 3 seconds for a webpage to respond Roland, Research objective: As online shopping is gaining rapid interest in India, an investigation on the consumer switching behavior, online trust, E-service quality and consumer value has therefore become a timely topic for research.

The main objectives of the research would be: i. To identify key factors which influence Indian consumer switching behavior when shopping online. To determine crucial elements which influence online loyalty, consumer value and E-service quality perceptions of Indian customers towards e-commerce companies. Though attracting new customers is a key strategy for major players, retaining many of them by studying a switching behavior might give them larger loyalty and thus bigger profits.

Hence, in order to retain and attract consumers in a thriving competitive market, e-commerce store owners need to recognize on how web-consumers perceive value and loyalty Goldsmith, At the same time, understanding reasons and patterns of customer exit can help them offer prolong and enriching shopping experience. Therefore to meet the objectives of the research, I have developed three research questions.

They are: i. What are the factors which influence customer exiting behavior amongst Indian consumers? Which are the key variables which determine online loyalty for E-commerce companies by Indian online shoppers? What are the factors which help Indian customers determine value and E-service quality of online retailers? It would focus on various previous research frameworks. Lastly, a conceptual research model is discussed in this chapter.

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It would illustrate research plan, design and action plan of data collection. Also, it would highlight new and major findings linked to research objective. Conclusion: In this chapter we were able to have an overview of evolution of internet retailing in the world and how it has grown in India in past few years.

Not only has it evolved in number of shopping websites being offered, it has seen sales in new product categories. As per the sales analysis of GOSF , the partner online websites saw per cent growth in daily sales and 50 per cent of buyers were shopping for the first time Chaudhary, Also surprisingly was seen that highly valued items like five houses worth Rs 25 crore, 34 Nissan cars and over Tata motor vehicles being bought in four days of online shopping festival Sushma, Overall, electronic commerce in India still accounts for only small fraction of total sales, but looks to grow to a considerable amount due to the factors of rapid urbanization, support of demographics, increasing adoption, ease of payment modes, penetration of internet and technology, invitation to foreign direct investments and customer centric innovative policies.

While the online retailers view future opportunities as being first movers and acquiring and retaining customers by various marketing strategies, they must understand the challenges which stand in terms of logistics, difficult payment options, acquiring new customer or exit of existing customer. The introductory chapter thus provides background and future of online retail in relation to growing Indian market. It also presents various opportunities and challenges which can be a crucial service differentiator. In the successive section we would lay the research objectives and questions followed by a breakdown of research outline by chapters.

The chapter showcases an overview on consumer exiting behavior and provides previous studies and researches conducted in relation to above mentioned parameters. The chapter starts with an introduction to online retailing and how it shares common attributes of offline stores followed by literature on online purchasing behavior.

Then the chapter brings about various influencers of online purchasing behavior. Next, the chapter sets forth the consumer switching behavior model and discusses various switching costs. The chapter then ends with a summary of the complete Literature Review. Online retailing: The rapid rise in growing number of online shopping customers has brought forward numerous opportunities and challenges for organizations Bai et al, Srinivasan and Anderson suggested using a service marketing framework which was initially created for offline businesses.

They felt it could also investigate the consumer purchasing behavior patterns of e-commerce business models. In contrast, few researchers emphasize on the fact that few of the crucial fundamentals of online retailing environment and behavior, were distinct to conventional offline or physical store context Janda et al, ; Liu et al, Regardless to these different approaches to various frameworks, most researchers admitted that by offering anticipated quality and satisfaction, retailers can control the consumer behavior and limit their switching habits Janda et al, ; Bai et al, This also helps to create a long lasting loyalty and trust platform offering them a distinctive competitive advantage.

The magnitude of the internet to facilitate communication with consumers, provide information, collection of market data, promotion of products and services and supporting online shopping experience, provides retailers innovative, flexible and rich channel Muylle and Basu, But it was not until last decade that internet touched shopping world. In few years it redefined the conventional world of retailing. Retailing is defined as a list of business activities which add useful value to services and products sold to customers for their use Levy, On the other hand, Internet retailing, Electronic retailing, E-tailing or E- commerce can termed as retail-ing business over the internet Rosenbloom, It can also be explained as, on one side, sellers sell products or provide services over their online platform i.

Non-digital products get delivered by linking supply chain and logistics whereas digital products are delivered over the internet. Ellis-Chadwick and Doherty divided the research on online retail in three categories. The first category examines customer perception, psychology and focuses on online purchasing behavior of consumer.

The third category researches technology perspective on how innovation in emerging IT sector can influence future trends e. But many researchers believe that much of the business model and strategies of online retail have been developed from traditional stores. Many concepts which online retailers use have been developed by traditional brick-and-mortar shopping methods.

The same is presented in next section which focuses on how similar and how different is online platform from conventional retail stores. Many of the attributes which consumers favor while shopping in department stores, are seen while shopping online Berry, Some of the researches have categorized physical store into areas of function like store polices, merchandise selection, price and layout of a store.

These areas are also considered when designing a business model for an online platform. Lindquist, further explains these attributes by categorizing into four groups of service, promotion, merchandise and navigation. The variable of service showcases general service process in a store and sales service for product returns.

The variable of promotion records marketing, advertising and features to attract customers e. The variable of merchandise measures product selection, quality, variety, pricing, guarantee and warranty. The variable of navigation defines layout of the store and checking out process.

Figure 2. We can see how sales desk customer service in physical store is replaced by aspects such as product page, search function and customer service on phone or email in an online platform. The above literature gives a perception on how online retailing is identical in some aspects of conventional retailing and how some forms are modified for consumers, all of which serves as a variable for online shopping behavior which is discussed elaborately in upcoming section. Online shopping behavior: Electronic commerce has emerged as one of the most distinctive characteristics of internet era.

As per UCLA, , it is third most popular activity on the internet after email and web browsing. It even beats trends like looking for entertainment and news on the internet, two most common activities people think what internet users do. The shopping process involves five steps similar to traditional shopping process Liang and Lai, Online shopping is viewed complex in nature and can be subdivided into various processes such as customer interaction, navigation, search for information, online transaction etc.

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It is highly unlikely that consumers evaluate each sub-process individually and in detail during single transaction. Rather they would evaluate and rate the overall shopping experience Van Riel et al. The Online shopping process starts when consumers feel the need for a product or service, go on the internet and search for related product. However, most of the times potential consumers are engaged by product or service information which they feel fits their need.

They then compare various options, make an evaluation and Finally, a payment is made for the product and after-sales service is provided. Donthu and Garcia said that online shoppers were innovative, variety seekers, less risk adverse and more impulsive when compared to non-online shoppers. As they exhibited higher level of self-confidence, they were found to have better knowledge and information about shopping online.

In order to ensure that internet spreads and propagates as retail channel, it is critical to realize customer shopping intentions and conduct in relation to online buying practice. Johnson,Lohse and Bellman examined relationship between personal characteristics, demographics and attitude in relation to internet shopping. They found that consumers who have more wired lifestyle and have more time constraints, tend to shop more frequently i. Dholakia claimed that items which sold the most through online platform were usually of low risk and had low cost convenience e.

However with higher internet penetration, over the years consumers have started shopping largely on other product categories. However products with low investment are purchased frequently, have intangible value and high on differentiation are likely to be purchased more through online retail than conventional shopping method. Consumers also use both offline and online platforms in combination to make a purchase decision. Francis found that online research also drove offline sales. Many consumers navigate through websites, find product information, compare prices and in the end make the final purchase from a physical store.

A study on consumer attitude towards online shopping in New Zealand included several variables towards four main categories; shopping experience, value of product or service, quality of service offered by e-retailer and risk perceptions of e-commerce. It was found that regular and loyal shoppers were more satisfied by all four variables compared to rare or trial buyers Shergill and Chen, The above two studies suggest that regular shoppers tend to be relatively more comfortable shopping online and perceive risks as non-existing.

Also, e-commerce is widely accepted by young age customer base with loyalty and trust being developed by long term service and ethics. They also presented that positive effect of effective communication, privacy and user friendly features of the website developed trust and consumer satisfaction. On the other hand, Chowdhury and Ahmad found in their study of Malaysian online shopping behavior that four key variables which were trust, ability, benevolence and integrity, were directly positively influenced Though trust and ability emerged as major influencers of online shopping behavior, integrity instigated customer exit.

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The study however does not take into account other major variables like consumer switching, competition etc. The most critical feature of internet is that it regulates pre-buying stage as it facilitates consumer to compare various options of the same item Dickson, In the purchasing stage, assortment of products, sale service and quality of information are the most important purchase decision factors for the consumer Koo et al.

They decide the end product and the online retailer. The major influencers of online shopping are - efficiency, availability of products, information, convenience and cost efficiency. Post-purchase behavior comes into picture after the sale is made. Customers might have concerns or problems relating to product or service and might need to return or exchange.

Thus, two major dimensions of post- purchase behavior are return and exchange services Liang and Lai, Few of the conclusions from above literature is that need for a product or service initiates the online purchasing behavior where information plays the role of the catalyst. Online buyers seek diversity of options, comfort and cost capacity.

Internet has also emerged as a tool for comparison of shopping as consumers often browse through various websites, compare products, and maybe make a purchase online or offline. Also online consumers do more research for products and prices compared to offline shoppers. With the increasing size, more demand by youth and change in the behavior of youth towards shopping has clearly indicated a huge market is available to the incumbents and existing performers. And at this stage it is important to understand the buying behavior of Indian customers towards online shopping which is mandatory for a great marketing strategy by the players in this industry.

And considering all this, the present study has made an attempt to understand the online shopping behavior of Indian customers. Content privacy, vendor profile, security of transactions, logistics timeframe and discounts are crucial factors which influence electronic exchange Rao, Donthu and Garcia presented convenience, risk aversion, income, impulsiveness, age, attitude towards direct marketing and advertising and variety seeking propensity as key elements to influence online buying behavior. Lukas and Maignan and Rowley presented a research which conveyed that financial risks were cited as primary reason to stop shopping over the internet and personal security had become dominant concern in both online relationship as well transactions.

Perceived risk is also seen to negatively affect the online purchasing behavior. Internet shopping experience is also affected with privacy and security concerns. Therefore the above literature suggests that with online shopping still not be in comfort zone of most shoppers in developing countries, it should be a prime strategy of online vendors to assure customers of transaction security, managing website traffic, minimizing return hassle for better online shopping experience. Apart from the above mentioned influencers of online shopping, few distinct have been consistently mentioned. The past literature and research have suggested that there are three main influencers which govern online shopping behavior and are discussed in upcoming section.

Influencers of Online shopping behavior: a E-Service Quality: The main goal for functioning of any business is to earn high and long term profits. E-Service quality is one of the crucial aspects to determine failure or success of an e-commerce has been developed from traditional internet marketing. A perceived service quality framework incorporates guaranteed tailored web services, optimum performance of logistics Doney and Cannon, , and warranties provided by the online retailer Kim et al.

In order to deliver superlative quality service over the internet, e-commerce organizations need to understand consumer perceptions regarding how they evaluate the quality of their services. Santos studied E-SERVQUAL and found that electronic service quality is assessment of extensive consumer intuition and measurement of delivery of internet retailers on virtual marketplace.

The importance of e-service delivery is highly recognized in business world and also as to why consumers seek an increase of these services is due to its ease of making comparison among various service providers in contrast to traditional offline ways Santos, Because comparing product prices, information and features becomes much easier than traditional methods of shopping, E-service quality becomes a crucial factor for consumers Santos, Therefore it would be correct to mention that online consumers expect equal or higher level of E-service quality compared to traditional shopping method.

Online consumers believe that when internet and technology potential is realized by e-retailers, ideal E-service quality can be achieved Yang, Few of the studies have probed in comparison of conventional service quality and outcomes of trust Sharma and Patterson, , loyalty and consumer satisfaction Cronin et al. With improvement in technology, most internet based companies have modified their interaction with consumers. Ample studies have been conducted which focus on evaluating and measuring online e-service quality.

E-service is also an interactive information tool which provides firms a mechanism to differentiate their key strategies and gain competitive advantage Santos, Key notes from E-service quality literature, various dimensions of web experience were used in relation to factors such as trust, satisfaction, convenience and loyalty Rowley, A research by Hitt and Chen concluded that Electronic service quality was negatively correlated to consumer switching behavior and costs. The findings also showed that high levels of electronic service quality can increase customer intentions like repurchase of products and services from website, site revisit and reduced switching behavior.

All of the core variables of E-service quality when put together in strategic business framework of online retail leads trust and customer satisfaction which in turn leads to long term customer loyalty. Zeithaml et al. They are divided into core service and recovery scale depending on when the consumers contact to experience the e-service. While the core-service variables control the pre- purchasing online shopping behavior, recovery scale variables come into effect after the sale, usually in cases of service failure.

Therefore it can be concluded that efficient and exceptional E-service quality is a critical factor for online vendors as it is one the factors that would not only enable them to attract more online consumers but also prevent customer switching. These benefits include objective, subjective, quantitative and qualitative attributes.

From the viewpoint of marketing, creating consumer value means ensuring consumer needs are met and increasing consumer satisfaction Porter, The concept of consumer value management is extensively used by market oriented companies to differentiate their selling points from competition Heiman, And in terms of e-commerce, if the company has presence on internet by selling products or providing information, then consumer expects different value and service compared to offline retail. Consumer value has received extensive research in marketing segments in the past two decades e. Parasuraman et al.

Not only it plays a key role in consumer choice prediction, but also influences long term loyalty. If retailers offer optimum value to their customers, they create enormous competitive advantage Chen and Dubinsky, Despite its critical importance in offline environment, consumer value has been less studied in online retail context.

Online consumer value is different from offline counterpart in many aspects. In e-commerce settings, not only the product but even the e-store and internet channel affect value quotient for consumers Keeney, There have been two key streams of the research; product value and shopping value. While we can derive some similarities, there are key differences between two. Therefore two retail stores selling the same item could be offering different value to consumers. Secondly, certain share of product value, e. Also consumer value is used as underlying concept which encompasses both product and shopping value.

It focuses on perceived core value as core variable and other antecedents and mediating factors. The framework also justifies two scenarios. Firstly, consumers spend too much effort and time on pre- purchase evaluation and internet is an ideal medium for this activity. Secondly, perceived consumer value also influences purchase intentions of individuals. They are price, emotional experience, perceived risk and perceived quality. Each of these factors can either negatively or positively provoke perceived consumer value.

For e. It means that there is positive relationship between product quality and price. Consumer behavior is a function of both, the environment and the person Wilkie, Customer perception is a process of sensing, selection, interpretation of stimuli from physical world to mental world of a person.

Perceived product quality in terms of online shopping can be explained as a situation when customers have no intrinsic attributes for products to develop opinion about product quality in pre-purchase shopping stage i. Online retail only provides visual showcasing of product categories. This lack of demonstration, further promotes lower level of tangibility perception among the customers. The three risks associated with online shopping are privacy, financial and performance.

Broydrick claims that eliminating risk is one of the ways to enhance perceived consume value. Fornell found that perceived risk, perceived quality and price not only effect perceived consumer value but also influence consumer switching behavior by controlling satisfaction levels. He claimed that consumer value is positively related to customer satisfaction. High consumer value heightens customer loyalty, reduces consumer service failure sensitivity, enhances brand name and prevents customer churn or exit. A few key observations can be drawn from the above mentioned literature.

Firstly, if consumers are to give up traditional retail stores, they must be offered value added features and benefits which are not available in conventional marketplace. It would offer them additional customer value. Secondly, as both shopping and product value make consumer value, both online store operation effects as well as product effects affect online shopping behavior. Thirdly optimum consumer value not only provokes online shopping behavior but also reduces customer exit. To reduce these costs and earn profit, online retailers must push customer loyalty which would mean convincing consumers to return to their websites to purchase again and again.

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For grocery and apparel categories, the figure is also a year. But it electronics the average is about four years to break even. Given these timeframes, pushing for more customer loyalty becomes an economic necessity Zhu. As a behavioral notion, consumer loyalty is defined as consumer intentions to do more business with seller and recommend him to other consumers Zeithaml et al. Heskett et al, suggested that one of the ways to increase consumer loyalty is by offering superior e-service quality. As quality is something consumers typically demand and value, by offering high quality service they would be willing to return and do more business with the e-retailer.

On the other hand, consumers experiencing low service value are more inclined to defect, switch or exit to other retailers Reichheld and Schefter Customer loyalty increases revenue and growth in many ways.

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Firstly by increasing customer loyalty by 5 per cent, revenues can increase from 30 to 85 per cent Chow and Reed, ; Heskett et al. Considering the type of industry, the revenue is even higher for online retailing industry Reichheld and Schefter, They are also easier to satisfy as retailer knows their expectations Heskett et al.

The success stories of many online retailers can be linked to their high inclination to customer loyalty. For example, Amazon. Loyal customers also reduce advertising and For example, EBay highly capitalized on this aspect by attracting consumers through a similar referral system. Another key antecedent of consumer loyalty is degree of trust which consumers have in the retailer Reichheld and Schefter, Trust can be defined as willingness to make oneself susceptible towards actions taken by trusted party upon feelings of assurance and confidence Gefen, Trust is of imperative importance when it is nearly impossible to fully regulate business agreement or when it is necessary to depend on third party on not to take unfair advantage or engage in opportunistic behavior Young, Consumer trust on online retailer is significant because there is minimum guarantee on online platform that the retailer with refrain from opportunistic, undesirable, unethical behaviors, such as distribution of personal data, unfair pricing, purchase activity without permission, inaccurate information presentation and unauthorized use of payment methods Kollock, Given these risks, consumers who do not trust the retailer would be least inclined to do business or return for repeated purchases Jarvenpaa and Tractinsky, Therefore trust can be considered as compelling and imperative constituent of a long term business interaction.

Trust is also a major precedent for consumers who are willing to do business with e-commerce marketplace vendor Jarvenpaa and Tractinsky, There is always scope for presentation of wrong information, unfair prices, distribution of personal data, unauthorized use of debit and credit cards and monitor purchase activities Naquin, Customers also have the option to contact the manufacturers, fashion advisors, publishers etc.

Retailers encourage customers to write post purchase feedback but with different intentions. For example many Chinese e-retailers ask customers to leave a positive feedback for a promo coupon whereas online giant Amazon, investigates reviews for product flaws Mckinsey, They sell well because they have clear product specifications which can communicated easily. Customers can also read user reviews and compare with other online retailers.

Some of the websites offer trying out the apparels on virtual models in order to facility buying Parvinen, The competition can be easily seen in market fragmentation as in every top 30 markets, 50 retailers account for about 80 per cent sales Morganosky, Many retailers with global dominance are now partnering with e-commerce channels and logistics companies in order to sell their products to international consumers Colla, The above changing trends significantly indicate on how consumer perception towards e-commerce has evolved.

We can certainly claim that this change offers them a larger and wider platform of choices, and thus more options to choose and switch. The successive section would discuss consumer purchasing and switching behavior. Consumer behavior towards Online Shopping: Existing research suggests that growth of online retailing looks optimistic, and there is a rapid increase in numbers of customers worldwide Ernst and Young, Product categories of apparel, electronics and grocery are among the top selling on most online platforms.

As per UCLA Centre Communication Policy, , online retailing has become third most favorite internet activity after emailing and web browsing. As the internet penetration and scope increases worldwide, it hints towards the massive sales and opportunity ahead. The interactive nature of web browsing and internet has improved over the past to offer many opportunities to upsurge the efficiency of online shopping behavior of customers.

Some of them are detailed product information and prices which enable direct comparisons reducing customers search costs and time Alba et al, Liang and Lai state that there are five steps involved in this process compared to traditional shopping. In a standard online shopping process, when individual recognizes a need for an item, they search for need related information on the internet. However most of the times, they are attracted by information presented about the product linked to their need.

They then compare and evaluate the options, and choose the one which best fits their need. In the end, a transaction is made and a post sales service conducted. Online shopping attitude can be termed as psychological state of customer in making a purchase decision on the internet Davis et al, Consumer purchase decisions are influenced by cyberspace appearance such as product info, images, videos, reviews etc and not on actual experience A framework developed by Laudon and Traver , comparing offline decision making and online customer decision suggested that when customer want to purchase a product, they would evaluate the brand and the features of the product or services.

While some products can be easily bought and shipped over the internet e. Customer skills or customer experience with online shopping which means consumer knowledge about products, technology and competition affect the buying decision of customer Broekhuizen and Huizingh, A lot of retailers invest to improve their website features and quality in order to influence customer perceptions of web environment and hence affecting their decision making Prasad and Aryasri, Click-stream behavior is another critical element in online purchase decision making.

It refers to online behavior of customers as they search for information through numerous websites many websites at the same time , then to a single website, to a single page, and finally to a decision to buy Laudon and Traver, At last the key influencers of online buying decision are availability of products and services, convenience, efficiency of cost and time and authenticity of information Prasad and Aryasri, Consumer switching behavior: With internet users increasing to a quarter billion worldwide and estimated about 30 billion by , growth in online retail has been exponential.

It is a concern which parallels problems of customer switching behavior in online retail industry. Some of this churn is discontinuance of online service, where consumers try a service but subsequently stop using service category on the whole. For example, 10 million tried and started using internet by but stopped by Kingsley, On the whole, with e-shopping developments becoming more prevalent, online retailers have the benefit of more consumer loyalty than their brick and mortar competitors. But the bigger question which has started reflecting on their business is how much customer loyalty persists within the online retail community.

The cost involved in locking up new customers means that loyalty has become economic necessity and business differentiation among e-commerce retailers. In addition to costs related to customer acquisition, retaining and winning back lost consumers, a lot of other expensive activities develop like marketing expenditure to build value equity, brand equity and relationship equity. This is the reason that a lot of focus has developed in order to study and investigate the buying patterns and switching behavior of customers. With this pattern, two key strategies have developed to increase behavioral form of loyalty.

The first being increasing customer satisfaction so that consumers see fewer gaps to switch to a competitor; the second being to make it difficult for consumers to switch i. Customer satisfaction and switching barriers are seen as antecedents of customer loyalty Dick, Therefore in order to stay profitable, retailers have to ensure that their customers stay with them on online channel of shopping.

E-commerce vendors need to showcase integrated multi channel operations and value packages which generate interest and offer product differentiation Sinioukov, Also, to retain customers and minimize switching to other retailers, some companies need to provide same shopping experience on both online and offline platforms.

By carefully synchronizing its channels, activities and operations, a retailer can offer a superior service output which gives consumers fewer reasons and opportunities to switch. This would entail comparison of multiple retail channel benefits and costs viewed by customers more holistically. It is surprising because it has a very low internet penetration of 8. As per Boston Consulting Group report, the figure of million Indian internet users in , the number would rise to million by Brown, Therefore the first wave of e-commerce was met only by small online shopping consumers due to low internet penetration, slow broadband speed, low level of acceptance of online retail and poor logistics.

Travel started emerging as one of largest segment in online retail segments. Consumers were now depending on internet websites and portals to search of travel information, bookings, payments etc. With a ripple effect, the acceptance of online travel made Indian consumers comfortable towards the concept on shopping online, thus leading to growth of online retail industry. This rapidly increasing internet penetration and scope is believed to directly impact Indian Online shopping business and trends or e-tailing.

They have a combined usage of 60 per cent which is greater than eight metro cities added together Ling, With the rise in literacy rate, these figures are projected to rise further. Out of this, about 67 million access web via their mobile devices. This behavioral change has been nourished by high cost of ownership by broadband companies.

The major usage is towards social networking, emails, browsing, and downloading digital content Economist, The same Indian market is seen as 8. The online platform in India is burgeoning by offering various options of movies, books, travel, hotel reservations, matrimonial services, gadgets, groceries etc. India is a nerve center to import hubs, e-commerce hubs, export hubs and rural hubs Ebay, Scope of business and major Indian players: With introduction, implementation and revolution in the technology and internet, a new market has been created for service providers as well as manufacturers.

It has also handed over a new arena which involves constant improving strategies and innovative marketing Yulihasri, There have been numerous reasons as to major shift of consumer buying patterns towards e-commerce. The ease of comparing products with competitive items on basis of color, size, price, quality and shipping speed has been one of the biggest benefits perceived.

With evolution of online shopping in India, new terms became popular like web stores, virtual store, online storefront, web-shop, e-shop, internet mall etc Na Wang, With increasing sale of smartphones, mobile commerce or m-commerce is also becoming popular by which consumers can simply place orders via mobile application of websites. Even the rising inflation in past few years has not affected the performance of leading online shopping portals of India. Earlier the Indian online shopping market was only limited to sale of mobile phones, books and electronic gadgets, but in past two years products reflecting lifestyle, viz.

Now the e-retailers are aiming to make categories like e-books, jewellery, kitchen appliances more acceptable to consumers. This rising popularity of e-commerce websites is also significant in addition to global online retail leaders like Amazon and Ebay. The following Table 1. Table 1. Across wide number of categories, there are numerous retailers spending money on marketing to grab some portion of market share.

The scenario is quite similar to dot com bubble in US, where several companies tried to sell the same common concept to consumers, with little or no differentiation Chen, With past studies and examples, the e-commerce industry shows that only a few early starters and companies offering differentiated services, products, marketing and customer relationship management will emerge as long run winners.

Flipkart and recently launched Amazon are seen as big players in Indian market. If CLTC is twice the cost of acquiring a new customer, with 1X coming in first 12 months after it acquires, the company is doing very well Bauer, A successful retailer needs to invest in business analytics and study parameters like website performance, conversion, returning traffic, customer service etc to create better customer acquisition strategies. With low internet penetration, limited payment options and slow growing infrastructure, pure click retailers might face slow growth and revenue.

Digital platform can thus be an additional benefit to big physical stores who wish to take their business online. These physical stores can leverage on their size, brand name, operations efficiency and marketing strategies to penetrate the online platform better Crisil, With growing economy, the disposable income is also rising. A successful e-retailer needs to create a delivery and business network of about pin codes out of total , pin codes in India Crisil, It has been a key focus area for digital retailers in an attempt to make Indian consumer comfortable to shop online.

For quite few years, almost all online retailers were dependent on third party logistics companies for delivery to customers. Now many have started delivering the orders themselves. The number of courier companies has also been rising, with about covering all the pincodes of the country. The cost of logistics is high due to lack of good quality infrastructure.

With creation of its own logistics, the retailer can benefit by higher profits; competitive advantage over local and new global entrants; lastly, it can open its delivery options to other retailers and charge them e. Amazon encouraging small companies to use it marketplace platform and cloud services. Suppliers have changed their supply chain from delivering to shops to creating a full strategic operational supply chain cycle. Also a major population in India did not have a debit or a credit card.

COD allowed customers to make payment when the items were delivered to them. Furthermore, even those who did possess a card, preferred to shop via COD. But unlike electronic payments, collecting cash manually is expensive, laborious and risky. The current need is to make credit or debit card more popular as payment option. Customers can easily navigate to various websites in case they do not find the product. The problem becomes worse in places where broadband speed is very slow.

About 40 per cent would not wait for more than 3 seconds for a webpage to respond Roland, Research objective: As online shopping is gaining rapid interest in India, an investigation on the consumer switching behavior, online trust, E-service quality and consumer value has therefore become a timely topic for research. The main objectives of the research would be: i. To identify key factors which influence Indian consumer switching behavior when shopping online.

To determine crucial elements which influence online loyalty, consumer value and E-service quality perceptions of Indian customers towards e-commerce companies. Though attracting new customers is a key strategy for major players, retaining many of them by studying a switching behavior might give them larger loyalty and thus bigger profits.

Hence, in order to retain and attract consumers in a thriving competitive market, e-commerce store owners need to recognize on how web-consumers perceive value and loyalty Goldsmith, At the same time, understanding reasons and patterns of customer exit can help them offer prolong and enriching shopping experience.

Consumer heterogeneity and online vs. offline retail spatial competition

Therefore to meet the objectives of the research, I have developed three research questions. They are: i. What are the factors which influence customer exiting behavior amongst Indian consumers? Which are the key variables which determine online loyalty for E-commerce companies by Indian online shoppers? What are the factors which help Indian customers determine value and E-service quality of online retailers? It would focus on various previous research frameworks. Lastly, a conceptual research model is discussed in this chapter. It would illustrate research plan, design and action plan of data collection.

Also, it would highlight new and major findings linked to research objective. Conclusion: In this chapter we were able to have an overview of evolution of internet retailing in the world and how it has grown in India in past few years. Not only has it evolved in number of shopping websites being offered, it has seen sales in new product categories.

As per the sales analysis of GOSF , the partner online websites saw per cent growth in daily sales and 50 per cent of buyers were shopping for the first time Chaudhary, Also surprisingly was seen that highly valued items like five houses worth Rs 25 crore, 34 Nissan cars and over Tata motor vehicles being bought in four days of online shopping festival Sushma, Overall, electronic commerce in India still accounts for only small fraction of total sales, but looks to grow to a considerable amount due to the factors of rapid urbanization, support of demographics, increasing adoption, ease of payment modes, penetration of internet and technology, invitation to foreign direct investments and customer centric innovative policies.

While the online retailers view future opportunities as being first movers and acquiring and retaining customers by various marketing strategies, they must understand the challenges which stand in terms of logistics, difficult payment options, acquiring new customer or exit of existing customer. The introductory chapter thus provides background and future of online retail in relation to growing Indian market.

It also presents various opportunities and challenges which can be a crucial service differentiator.


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In the successive section we would lay the research objectives and questions followed by a breakdown of research outline by chapters. The chapter showcases an overview on consumer exiting behavior and provides previous studies and researches conducted in relation to above mentioned parameters. The chapter starts with an introduction to online retailing and how it shares common attributes of offline stores followed by literature on online purchasing behavior.

Then the chapter brings about various influencers of online purchasing behavior. Next, the chapter sets forth the consumer switching behavior model and discusses various switching costs. The chapter then ends with a summary of the complete Literature Review. Online retailing: The rapid rise in growing number of online shopping customers has brought forward numerous opportunities and challenges for organizations Bai et al, Srinivasan and Anderson suggested using a service marketing framework which was initially created for offline businesses.

They felt it could also investigate the consumer purchasing behavior patterns of e-commerce business models. In contrast, few researchers emphasize on the fact that few of the crucial fundamentals of online retailing environment and behavior, were distinct to conventional offline or physical store context Janda et al, ; Liu et al, Regardless to these different approaches to various frameworks, most researchers admitted that by offering anticipated quality and satisfaction, retailers can control the consumer behavior and limit their switching habits Janda et al, ; Bai et al, This also helps to create a long lasting loyalty and trust platform offering them a distinctive competitive advantage.

The magnitude of the internet to facilitate communication with consumers, provide information, collection of market data, promotion of products and services and supporting online shopping experience, provides retailers innovative, flexible and rich channel Muylle and Basu, But it was not until last decade that internet touched shopping world.

In few years it redefined the conventional world of retailing. Retailing is defined as a list of business activities which add useful value to services and products sold to customers for their use Levy, On the other hand, Internet retailing, Electronic retailing, E-tailing or E- commerce can termed as retail-ing business over the internet Rosenbloom, It can also be explained as, on one side, sellers sell products or provide services over their online platform i. Non-digital products get delivered by linking supply chain and logistics whereas digital products are delivered over the internet.

Ellis-Chadwick and Doherty divided the research on online retail in three categories. The first category examines customer perception, psychology and focuses on online purchasing behavior of consumer. The third category researches technology perspective on how innovation in emerging IT sector can influence future trends e.

But many researchers believe that much of the business model and strategies of online retail have been developed from traditional stores. Many concepts which online retailers use have been developed by traditional brick-and-mortar shopping methods. The same is presented in next section which focuses on how similar and how different is online platform from conventional retail stores. Many of the attributes which consumers favor while shopping in department stores, are seen while shopping online Berry, Some of the researches have categorized physical store into areas of function like store polices, merchandise selection, price and layout of a store.

These areas are also considered when designing a business model for an online platform. Lindquist, further explains these attributes by categorizing into four groups of service, promotion, merchandise and navigation. The variable of service showcases general service process in a store and sales service for product returns. The variable of promotion records marketing, advertising and features to attract customers e. The variable of merchandise measures product selection, quality, variety, pricing, guarantee and warranty. The variable of navigation defines layout of the store and checking out process.

Figure 2. We can see how sales desk customer service in physical store is replaced by aspects such as product page, search function and customer service on phone or email in an online platform. The above literature gives a perception on how online retailing is identical in some aspects of conventional retailing and how some forms are modified for consumers, all of which serves as a variable for online shopping behavior which is discussed elaborately in upcoming section.

Online shopping behavior: Electronic commerce has emerged as one of the most distinctive characteristics of internet era. As per UCLA, , it is third most popular activity on the internet after email and web browsing. It even beats trends like looking for entertainment and news on the internet, two most common activities people think what internet users do.

The shopping process involves five steps similar to traditional shopping process Liang and Lai, Online shopping is viewed complex in nature and can be subdivided into various processes such as customer interaction, navigation, search for information, online transaction etc. It is highly unlikely that consumers evaluate each sub-process individually and in detail during single transaction.

Rather they would evaluate and rate the overall shopping experience Van Riel et al. The Online shopping process starts when consumers feel the need for a product or service, go on the internet and search for related product. However, most of the times potential consumers are engaged by product or service information which they feel fits their need. They then compare various options, make an evaluation and Finally, a payment is made for the product and after-sales service is provided.

Donthu and Garcia said that online shoppers were innovative, variety seekers, less risk adverse and more impulsive when compared to non-online shoppers. As they exhibited higher level of self-confidence, they were found to have better knowledge and information about shopping online. In order to ensure that internet spreads and propagates as retail channel, it is critical to realize customer shopping intentions and conduct in relation to online buying practice.

Johnson,Lohse and Bellman examined relationship between personal characteristics, demographics and attitude in relation to internet shopping. They found that consumers who have more wired lifestyle and have more time constraints, tend to shop more frequently i. Dholakia claimed that items which sold the most through online platform were usually of low risk and had low cost convenience e. However with higher internet penetration, over the years consumers have started shopping largely on other product categories.

However products with low investment are purchased frequently, have intangible value and high on differentiation are likely to be purchased more through online retail than conventional shopping method. Consumers also use both offline and online platforms in combination to make a purchase decision.

Francis found that online research also drove offline sales. Many consumers navigate through websites, find product information, compare prices and in the end make the final purchase from a physical store. A study on consumer attitude towards online shopping in New Zealand included several variables towards four main categories; shopping experience, value of product or service, quality of service offered by e-retailer and risk perceptions of e-commerce.

It was found that regular and loyal shoppers were more satisfied by all four variables compared to rare or trial buyers Shergill and Chen, The above two studies suggest that regular shoppers tend to be relatively more comfortable shopping online and perceive risks as non-existing. Also, e-commerce is widely accepted by young age customer base with loyalty and trust being developed by long term service and ethics.

They also presented that positive effect of effective communication, privacy and user friendly features of the website developed trust and consumer satisfaction. On the other hand, Chowdhury and Ahmad found in their study of Malaysian online shopping behavior that four key variables which were trust, ability, benevolence and integrity, were directly positively influenced Though trust and ability emerged as major influencers of online shopping behavior, integrity instigated customer exit.

The study however does not take into account other major variables like consumer switching, competition etc. The most critical feature of internet is that it regulates pre-buying stage as it facilitates consumer to compare various options of the same item Dickson, In the purchasing stage, assortment of products, sale service and quality of information are the most important purchase decision factors for the consumer Koo et al. They decide the end product and the online retailer. The major influencers of online shopping are - efficiency, availability of products, information, convenience and cost efficiency.

Post-purchase behavior comes into picture after the sale is made. Customers might have concerns or problems relating to product or service and might need to return or exchange. Thus, two major dimensions of post- purchase behavior are return and exchange services Liang and Lai, Few of the conclusions from above literature is that need for a product or service initiates the online purchasing behavior where information plays the role of the catalyst. Online buyers seek diversity of options, comfort and cost capacity. Internet has also emerged as a tool for comparison of shopping as consumers often browse through various websites, compare products, and maybe make a purchase online or offline.

Also online consumers do more research for products and prices compared to offline shoppers. With the increasing size, more demand by youth and change in the behavior of youth towards shopping has clearly indicated a huge market is available to the incumbents and existing performers.

And at this stage it is important to understand the buying behavior of Indian customers towards online shopping which is mandatory for a great marketing strategy by the players in this industry. And considering all this, the present study has made an attempt to understand the online shopping behavior of Indian customers. Content privacy, vendor profile, security of transactions, logistics timeframe and discounts are crucial factors which influence electronic exchange Rao, Donthu and Garcia presented convenience, risk aversion, income, impulsiveness, age, attitude towards direct marketing and advertising and variety seeking propensity as key elements to influence online buying behavior.

Lukas and Maignan and Rowley presented a research which conveyed that financial risks were cited as primary reason to stop shopping over the internet and personal security had become dominant concern in both online relationship as well transactions. Perceived risk is also seen to negatively affect the online purchasing behavior. Internet shopping experience is also affected with privacy and security concerns. Therefore the above literature suggests that with online shopping still not be in comfort zone of most shoppers in developing countries, it should be a prime strategy of online vendors to assure customers of transaction security, managing website traffic, minimizing return hassle for better online shopping experience.

Apart from the above mentioned influencers of online shopping, few distinct have been consistently mentioned.