Online shopping assignment
- 1. Online shopping: Factors that affect consumer purchasing behaviour
- 2. Introduction The objective of this paper is to determine factors that affect the consumers’willingness to purchase product from the online store. Evaluated criteria for making decision when purchase online. Conducted principal component analysis to reduce number of criteria. Created seven factors.
- 3. Keywords Online shopping; customer experience; factor analysis; principal components analysis
- 4. How people choose the most suitable online store Research by Masínová and Svandová (2014) #Conducted on the sample of 167 respondents. #product description, solving the claims, product photos,payment options and time to response are among factors that affects customers’ satisfaction in the major way(to be important especially for the Internet users purchasing clothing). Research by Bucko and Vejačka (2011) Discussed the factors affecting the purchasing online is trust and security of the environment and connected identification of users (or communicating parties). # Analyzed the sample of 1,067 respondents. #research was conducted between January and April 2013. #Based on the results of the survey, the factor analysis was conducted. #Based on the research results, it was found that country of origin matters more to the older respondents compared to younger ones.
- 5. Study conducted by Rajyalakshmi (2015) #sample of 1,500 Internet users from six major cities across India. #pointed out to eight factors-positive attitude (“I really like buying at the Internet”, “I consider internet to be my first choice when I need any product or service”), perceived usefulness, product risk, perceived risk, price, traditional shopping, promotion, financial risk. #The regression analysis found that perceived risk, price and promotion have the strongest positive impact on customers’ willingness to purchase a product. #Thesis by Agyapong (2017) was conducted on the sample of 184 respondents via online questionnaire. The author found that the main factors that affect online shopping are convenience and attractive pricing/discount.
- 6. Methods used to determine factors affecting consumer behavior The main objective of this paper is to determine factors that affect the consumers’ willingness to purchase product from an online store in the condition of Slovak market. Goal was to eliminate the number of criteria affecting the online purchase and create new latent variables (factors) that could gather summarized information within. The general sample(servey questionnaire) consisted of all Internet users located in Slovak republic. The sample was not selected randomly, selected the sample purposely. consider Generation Y (born between 1980 and 1995) to be the major group of Internet users with purchasing potential, focus was aimed to this particular group. looking for a group of people with the higher level of the Internet literacy (as we wanted to avoid the entropy in terms of theory of marketing communication), we selected university students to be appropriate subjects.
- 7. The servey consisting of 17 items. We focused on responses provided to one particular item: “How important are the following criteria for you during the online purchase?” The evaluated criteria was as follows: price of the product, shipping, discounts and special offers during the purchase, price comparison with brickand-mortar store, payment method, delivery time, reviews about product, reviews about seller, limited product quantity, time-limited offers, free shipping, security certificate, product details, product photos, website graphics, easy-to-use navigation, customer service before the purchase, position in search engine results page, mobile optimization of the website, ease of accessibility of terms and conditions, ease of accessibility of shipping conditions, website activity, social media activity, numberof followers on social media, seller’s country of origin. Respondents selected their answers from the modal options in the interval from 1 = very important to 5 = not important at all.
- 8. Basic assumption for use of factor analysis is the existence of sufficient correlations among data in the data matrix. To analyze these correlations, it is possible to use various tests: #Bartlett sphericity test: null hypothesis assumes the correlation matrix to be an identity matrix. #Kaiser–Mayer–Olkin test (KMO): compares sizes of experimental correlation coefficients to sizes of partial correlation coefficients. #MSA: it provides the level of degree of inner correlations between original tokens and expresses how they are predicted by other tokens.
- 9. The development of the fundamental factors In total, 232 respondents joined the survey. The average age of the respondents was 21.72 years (in the interval between 18 and 26 years) and median of age was 21 years. In total, 24.89% of the respondents stated their gender was male,75,11% of respondents stated their gender was female.
- 10. Criteria of online purchase H0: The correlation matrix is an identity matrix. HA: The correlation matrix is not an identity matrix.
- 11. Figure 1. Scree plot (eigenvalues) (own processing in R).
- 12. Based on the table above, it is possible to define components (factors) as follows: ● RC1—The factor of price: this factor merges variables that affects the price of the purchase` ● RC2—The factor of availability: this factor covers variables associated with ease of the ordering process itself; ● RC3—The factor of social proof: this factor covers people’s urge to confirm the product they are going to purchase is good; ● RC4—The factor of scarcity: this factor merges variables that affect the speed of people’s choice. Together with social proof, scarcity is among Robert Cialdini’s Weapons of Influence (Cialdini, 2006); ● RC5—The factor of product details: this factor merges variables connected to the presentation of the product; RC6—The factor of conditions: this factor merges variables associated with easiness to access various conditions; ● RC7—The factor of social media activity: this factor merges variables connected to store’s activity on social media.
- 13. Purchase behavior hierarchical model Price = ~ Price of the product + Shipping + Discounts and special offers Availability = ~ Payment method + Delivery time Social proof = ~ Reviews about the product + Reviews about the seller Scarcity = ~ Limited quantity of the product + Time limited offer Product details = ~ Product details + Product photo Conditions = ~ Accessible terms and conditions + Accessible shipping conditions Social media activity = ~ Social media activity + # of social media followers
- 15. Confirmatory factor analysis model fit
- 17. Conclusion and limitation As online shopping became the regular part of people’s lives, optimization of e-commerce stores is crucial in order to provide the experience expected by website visitors (potential customers). The positive experience might result in higher revenues, the negative one might result in permanent loss of customers. The factor of price explained the largest part of variance in the data. Assume the price is especially important for university students, as in majority of cases, they are not employed and therefore, their financial budget is limited. There were several limitations of the study: #the sample is not a representative sample of the abovementioned general sample of Internet users, #the selected Likert scale to be not as sufficient as characteristics of data shown that many people had tendency to center their answers towards the neutral answer—3. consider to be important is the consciousness of the sample regarding the factors itself as some of them might affect user’s behavior subconsciously without user noticing the factor actually changed her decision