The Development Of Online Shopping Marketing Essay

The internet has become indispensable to our lives. The end is near and the future is bleak for high street shopping declares a leading industry in web design and web development solution. More than a decade ago, it was prophesied that the advent of the internet will kill off high street shops and this can be evidenced in the popularity of online shopping when it comes to categories like clothes, music, films, books and even food (Levene, 2012). The continued breakthrough in technology and subsequent reliance by consumers on technology is ‘rapidly reshaping’ high street shopping experience (Warman, 2013).It has been reported that in no time the “boundaries between the physical and virtual space” will soon become blurred which may lead to the closure of shops as we have known them in the near future (Kollewe, 2012). Further stressing this point, Kollewe (2012) states that, four out of ten shops will shut down in the next five years as consumers increasingly abandon the traditional way of shopping in favour of online shopping. Corc (2010) has pointed out that many high street stores have expanded and grown their market by making use of the opportunities the internet offers to expand and reach a whole new clientele. By having a high street store and also a virtual store, companies ‘get the best of both worlds’. By pushing and marketing their products online and also having them in a physical store, retailers can posture and position themselves and taking advantage of the increased demand for online shopping availability. By shopping online, consumers can conveniently purchase products at their own convenience in the comfort of their homes without having to leave their homes in search of high street stores. However, there are still consumers who like and actually enjoy going into high street stores. Corc (2010) states that for some of these consumers, who either shop online or go into physical stores to buy their products, any method of purchase basically boils down to ‘generation gap’ . This research will seek to review the decline of high street shopping as we know it and also seek to understand why in addition to the benefits and barriers of the rise of the online shopping experience. Solutions will be proffered to how both can exist and an in-depth exploration into the literature of key terms will be carried out. This research also seeks to add to the body of knowledge of the key terms.

KEY TERMS FOR THE STUDY

Internet

Online shopping

High street shopping

Information and Communication Technologies (ICT)

SUMMARY OF CONTENT

This research dissertation will be divided into six primary chapters in order to have a comprehensive outlook of the title. They are:

The Introduction chapter 1: this will be looking at the context in which online shopping and high street shopping is set and the rationale for the argument. The chapter will also seek to present the dissertation aims and objectives and also outline some of the research problems.

The Literature review chapter 2: this chapter will seek to evaluate critically, the existing literature with a view to presenting some background theory, while giving a summary of research carried out by organisations, government bodies, research units with statistics and publications. This chapter will aim to highlight the key terms and explore the benefits and barriers of high street shopping and online shopping and add to the debate through empirical evidence.

The Research Methodology Chapter 3: this chapter will refresh the clear aims and objectives of the research, with a view to describing how the research design will be carried out. A critical and clear application and design of the research will be highlighted in this chapter in order to provide clarity.

The Secondary and Primary research findings Chapter 4: this chapter is one that will present a comprehensive summary of the primary research that will be carried out in the course of the study and will be clearly reported to provide empirical evidence.

The Analysis, Evaluation and Discussion of the Findings Chapter 5: this chapter will seek to provide fact and figures to support the dissertation and also show concrete evidence and statistical qualitative analysis of the research findings.

The Conclusion Chapter 6: this chapter will aim to summarise all that was researched with a view to providing a comprehensive summary that will contribute to knowledge and also highlight the limitations of the study and areas for future work. Some recommendations will be highlighted for the future.

Chapter 1

Introduction

Chapter 2

Literature review

Chapter 3

Research Methodology

Chapter 4

Secondary and Primary research findings

Chapter 5

Analysis, Evaluation and Discussion

Chapter 6

The Conclusion

ACKNOWLEDGEMENTS

I would like to take the opportunity to acknowledge the advice and encouragement given by my Course Tutor in helping with the completion of this work. Your contribution has been invaluable.

I would also like to thank the different individuals and business owners that took the time to speak to me and contributed and showed genuine interest in the research.

Finally I would like to thank my mother for her understanding and support and patience during my time in the University and during this research. I also want to thank all my family members and friends who have offered a kind word or two during the stressful times and to all, I am deeply grateful.

TABLE OF CONTENTS

Abstract……………………………………………………………………………………………..2

Key terms for the study…………………………………………………………………………….2

Summary of content………………………………………………………………………………..2

Chapter 1

Introduction…………………………………………………………………………………….7

1.1 Context and rationale………………………………………………………………………….7

1.2 Research aims………………………………………………………………………………….8

1.3 Research methods………………………………………………………………………………………………………8

1.4 Research objectives……………………………………………………………………………8

1.5 Research problem………………………………………………………………………………8

Chapter 2

Literature review………………………………………………………………………………9

2.1 Literature context………………………………………………………………………………9

2.2 Definition of terms……………………………………………………………………………..9

2.3 Internet…………………………………………………………………………………………9

2.4 Development of online shopping………………………………………………..…………….10

2.5 Development of the internet for business………………………………………….………….11

2.6 Early doubts about the internet as a retail medium……………………………………………12

2.7 High street shopping…………………………………………………………………………..12

2.8 Benefits of online shopping…………………………………………………………..……….12

2.9 Benefits of high street shopping………………………………………..……………………..13

2.10 Barriers of online shopping…………………………………..………………………………13

2.11 Impact on skull shopping………………………………………….…………………………14

Chapter 3

Secondary and primarily research findings…………………………………………………….16

3.1 Primary research………………………………………………………..………….……………16

3.2 Introduction……………………………………………………………………………………..16

3.3 Research approach and design……………………..……………………………………………16

3.4 Research setting…………………………………………………..…………………………….16

3.5 Study population and sample………………………………….………………………………..16

3.6 Sampling criteria…………………………………………………………………………………17

3.7 Data collection…………………………………………………………………………………..17

3.8 Reliability and validity………………………………………………………………………….17

3.9 Pretesting the questionnaires………………………………..…………………………………..18

3.10 Ethical considerations…………………………………………………………………………18

3.11 Data analysis……………………………………………………………..……………………18

3.12 Conclusion…………………………………………………………….………………………21

3.13 Secondary research findings……………………………………….………………………….21

Chapter 4

4.0 Analysis, evaluation and discussion………………………………………..…………………..22

4.1 The future of high street shopping and online shopping……………….………………………22

Chapter 5

5.0 Conclusion……………………………………………………………………………………..25

References and bibliography………………………………………………………………………26

Appendix………………………………………………………..…………………………………33

CHAPTER 1

1.0 INTRODUCTION

1.1 Context and rationale

This dissertation is focused on examining the upward spiral of the internet and it subsequent effect on the traditional way of high street shopping which has been seen as a more traditional approach to shopping before the advent of ICT technology that has given rise to the online shopping experience. For example, McCann (1996) in his article reports that a survey conducted by Deloittes, a city firm, states that a large proportion of the population viewed high street shopping as “a chore to be avoided at all costs”. The survey further shows that this view on high street shopping is held by 55% of the population under the age of 34 years. This empirical evidence showcases the new trend of shopping in our modern day. This research also seeks to highlight factors that influence why people shop online, such as the consumer adoption of new self-service technologies and internet shopping (Dabholkar 2002). Davis (1993) seeks to advocate that consumers’ view and inclination towards online shopping depends primarily, on the ‘direct effects of relevant online shopping features. Several external factors still play a part in influencing a consumers’ choice to shop online and these include consumer traits which change from time to time and season to season (Burke, 2002), situational factors such as trends and personal circumstances and also economic circumstance (Avery, 1996), characteristics of the product can also be a factor of influence as it may be cheaper to buy a product online and have it delivered to a home and save on transportation from the shop if the customer used personal transport (Grewal et al, 2002), past online shopping experience may have been favourable which will help in making more online purchases (Shim et al, 2001), and finally the consumer having faith in online shopping (Yoon, 2002). All of the above mentioned exogenous factors in the addition to the basic factors that determine a consumers’ attitude and desire to use the internet, makes it fall under the purview of online shopping context which is what the research aims to express. These factors deeply influence and affect consumer attitude towards carrying out online shopping and provides a guide to understanding the nature of the consumer and their desire to tend towards the online shopping experience over the high street shopping experience.

One author, Murray (2006) suggests that shop staff often encroach on the privacy of shoppers who want to quietly shop in peace without frequent any disturbance from over-zealous shop assistants who molest customers with annoying questions like ‘do you need help?’. He goes further to say that most retailers also resort to playing music in shops which is too loud and also the long queues at checkouts can be seen and perceived as irritable to a wide range of customers. This is in contrast to the serenity and sanity that the internet affords consumers, and also the need to travel all the way down to shops is avoided and cost is saved (Murray, 2006). The in-depth analysis of the benefits and barriers of the two interesting themes of online shopping and high street shopping will be examined. Each mode of shopping will be objectively assessed and a conclusion will be drawn as to the best method of shopping. But it should be noted that the internet does not necessarily need to replace high street stores. This is because there will always be the need for customers to have variety and at certain times when purchasing unique goods, the sense of physical touch, taste and smell may be required to make an informed. Some may argue differently however, in order to have a balanced viewpoint; examining both sides will give deeper insight into the research. High street shopping will definitely complement online shopping and vice versa in their operational and demographical scope. Whichever way the consumer’s decide to go, the economy ultimately benefits.

1.2 Research aims

To define internet/online shopping

To define high street/traditional shopping

To analyse the effect of online shopping on high street shopping

To review the benefits of high street shopping

To review the benefits of online shopping

To review the barriers of high street shopping

To review the barriers of online shopping

1.3 Research methods

The research will primarily involve conducting a primary research by handing out questionnaires to people in order to find out their shopping habits and whether they predominantly shop online or in high street stores. Also, existing literature and surveys conducted by other authors will be examined.

1.4 Research Objectives

To undertake an analysis of the current trends in online shopping and high street shopping

To analyse the online shopping models with the high street shopping models

To demonstrate the practical application of the research results

1.5 Research Problem

The Key research problem of this study is simply how to determine the impact of online shopping on high street shops and also to determine if online shoppers are affected or changed from the high street shopping experience because of the following factors: gender, disability, age or just simply shopping online for convenience and deals.

CHAPTER 2

2.0 LITERATURE REVIEW

2.1 Literature context

According to Schaupp and Belanger (2005) ‘the ability to measure the level of customer satisfaction with online shopping is essential in gauging the success and failure of e-commerce. To do so, Internet businesses must be able to determine and understand the values of their existing and potential customers’. Online shopping has several factors that give it an edge over the traditional high street shopping. Factors like convenience, time saving, ability to compare prices of products and features, ability to compare different products by different retailers at the same time, and also goods can be found easily that may not be available in a high street store (Rajneesh et al 2010). Convenience can include ‘convenience includes the overall ease of findings a product, time spent on shopping and minimisation of overall shopping effort’ (Schaupp and Belanger, 2005). Rajneesh (2010) continues by saying that the consumer is saved much effort when shopping online in terms time saving by not going to the store in person, selecting desired products, queuing, parking, avoiding going out in bad weather, saving on gas, and avoiding contact with other people when solitude is need for shopping. Also, consumers when shopping online are able to compare prices of different products being offered different retailers without having to visit all the stores in order to do so. Lokken et al (2003) posits that consumers can shop anytime of the day without any geographic restriction. ‘Online shopping also provides consumers an ability to browse an infinite variety of products transcending geographical, national and cultural boundaries. Moreover, online shopping has an added advantage for working women as they do not have to drag their kids to malls and stores for shopping. The only basic requirement a customer needs for doing online shopping is availability of Internet access and credit card’ (Rajneesh, 2012).

2.2 DEFINITION OF TERMS

2.3 Internet

The rapid growth of the internet has been a revelation. It has been said to be man’s biggest achievement, which is the ability to communicate globally and with astonishing, lightning speed. The internet was once exclusively used by those in the military and academia, but has now grown into a medium through people express themselves and conduct research into every subject one can think of. Millions of pages are being added to the World Wide Web on a daily basis and people use various search engines like yahoo, google, bing and other portals to access information they need (Zegna et al, 2005) The internet can be defined as a ‘global system of distributed networks that use “packet switch” technologies for information and service exchange’. Several processes like e-mail, text, voice chat, file sharing, transmission and advertisements can be communicated over the internet. The size, speed, and popularity of the internet have made it the most important new communication technology for a couple of years (Hoffman, 2010). The internet’s infrastructure according to Hoffman (2010) was developed by a group of American academics and computer scientists in the private sector. They as a group were interested in network technology and their research was funded by the United Sates military. The idea for the development of the internet was first spotted in the memos of J.C.R Licklider in 1962. He had the vision of a”galactic network” of interconnected computers that would advance human reasoning through “man-computer symbiosis” (Hoffman, 2010). When Licklider was made the head of the US Defense Department of computer research program, he played an instrumental part in securing funds for an assembled team of computer scientists to see that his dream was realised. The first version of the internet was installed at the University of California, Los Angeles in 1969, which was divided between military and academic sections in 1983,, and eventually opened up to commercial use in 1991 (Hoffman, 2010). According to Bargh et al (2004), the internet is one of the latest breakthroughs in technology when it comes to interpersonal communication. Previously communication was made through telegraph, telephone, radio and television. The internet combines the features of the telegraph, telephone, radio and television, cutting short the distance and reaching a very vast audience. In addition to this, the internet offers users anonymity and provides a forum for people who share similar interests and values to meet.

2.4 Development of online shopping

In the 1990s, as technology and ambitious companies started to make serious efforts to meet up with the challenges and many opportunities the growth of the internet offered, theses companies began making efforts to engage in online trade by creating highly developed websites to enable customers shop in the comfort of their homes (Rayport et al, 1994). When the internet was developing at a fast pace twenty years ago, there were many predictions about its possible growth and its ultimate success, though at that time it looked a bit uncertain. Predictions were made on how big and effective the internet will have on retailing and the business world in general. Several questions were asked and when the answers became clearer and positive it was believed that the internet will be the next big thing. Questions such as to what degree will the internet change the principles of retailing? Will it entirely displace the existing retail methods or will the internet serve as a compliment to the already established traditional way of retailing? (Burke, 1997). Also, what categories of consumers taking into consideration their location and shopping habits will most likely shop online regularly (Jones et al, 1998). On the part of retailers, questions were asked on how will they develop market strategies that are appropriate for online trading in terms of channel co-ordination, segmentation, pricing and promotional strategies (Peterson et al, 1997). Angelides (1997) asked the most important question which was whether online retailing in the long run replace, or radically change high street shopping. Nazir et al (2012:487) reasons that the advent of online shopping and increased popularity of the internet has created a dynamic and convenient way as to how people shop which is different from the traditionally classically recognised way and mode of shopping. Consumers no longer need to wait for shops to open at a specific time which can be restrictive and time wasting. Now, consumers can virtually shop at any time and any place they want in order to purchase products and services which is a time saving method. The internet has grown to be the new avenue for people to communicate and exchange information, goods, and services and has become a constant of our daily living and without it we may not survive in modern times. The number of people using the internet is increasing by the day so also the number of people now changing to purchasing products online. According to Corc (2010) retailers establish stores on the internet which allows them to expand their market, reach bigger demographics and reach new consumers and also reach out people who may not wish to visit the high street stores for their purchases due to diverse reasons. The convenience shopping online provides is the primary reason why consumers shop online.

2.5 The development of the internet for business

According to Pyle (1996) the importance of the internet as a totally different and efficient way of communicating was evident in areas such as global research, ease of access, ability for users to interact with each other, flexibility and speed, ability to send and receive large amounts of information at the same time, ease of maintenance, and it’s obvious cost efficiency. All these attributes of the internet were soon used and applied in so many sectors of the economy such as defence, banking, manufacturing, education and healthcare. As time went on, it soon began to emerge that the internet was going to have a very huge significance in the retail sector. Many retailers began to identify the internet as medium adequate enough to provide information on products, a communication channel between retailers and consumers, collection of market research data and surveys, the promotion of goods and services, and a means for consumers to order required products online. In short, the internet became an ‘extremely rich and flexible retail channel’ for both retailers and consumers alike (Doherty & Elli Chadwick. 1999). According to Doherty et al (2010), though online shopping until the mid 90s didn’t grow in an organised and progressive fashion, it has always been expected to be big many years before it became a huge success it is today. Doddy et al (1967) had a long time ago predicted that the future of retailing will ultimately culminate in the ability of consumers to use computers to order their goods from centralised retail warehouses. Despite this prediction, the internet didn’t become an instant it, it suffered prolonged slow growth but when it’s rise began, it generated a huge amount of interest and following especially with those in the academic, political, industrial, banking, entrepreneurial, management, and retail sectors (Doherty et al, 2010). Vijayasarathy et al (1997) stated that the unique ability the internet possessed to deliver ‘tangible economic gains’ was the driving force for the interest and subsequent patronage the internet generated in the world on online shopping. Alba et al (1997) in support of Vijayasarathy’s statement stated that the internet became well known when it became clear that the internet could offer efficient means of ordering goods and complimentary merchandise, its delivery, distribution, collection of consumer data, and also the ability to offer special goods. Pyle (1996) summed it up by saying that the internet ability as a ‘global connectivity opens up new avenues for business in a manner that traditional commerce conduits cannot match’.

2.6 Early doubts about the internet as a retail medium

When the internet started gaining popularity, its importance as a means of marketing goods and services was never in doubt but people still voiced some concerns over some limitations the internet possessed. These limitations were in form of significant barriers and hurdles that needed to be dealt with before the total acceptance of the internet as a retailing medium would be achieved (Doherty et al, 2010). For instance, Cockburn et al (1996) studied the mapping business use of the internet and discovered that the internet lacked adequate security and also an acceptable online payment system. Also the slow connection rate of the internet and its limited access would be consumers had to the internet posed a problem. These factors greatly slowed down the growth and commercial success of the internet. Jones et al (1998) stated that most consumers had serious doubts over the secure nature of buying online and also over the true nature of some online retailers. Doubts were also expressed by Nath et al (1998) over the legal nature of transactions made online and the inadequate of reliable information on how effective and reliable it was to conduct business over the internet. Though these doubts were voiced by many people, Doherty (2010) states that many authors were positive that the internet will experience growth and that the ability of internet to be a very effective and important retail medium was never in question.

2.7 High street shopping

High streets and town centres provide the space shops need to carry on business. Retail shops are an important part of the high street, but people visit the high streets for other purposes apart from shopping, like visiting cafes, restaurants, pubs, galleries, museums, cinemas, parks, beauty parlours, hairdressers, doctors and dentists, libraries, banks, solicitors and estate agents. Also people come together in town centres to meet with friends and join in community activities. It has been said the high street is a focal point of local identity, community pride, common heritage and values (Re-imagining urban spaces to help revitalise our high streets, 2012).

2.8 Benefits of online shopping

Online shopping affords consumers the chance to buy goods sitting in the comfort of their homes without having to walk through high street shops looking for items they want to purchase. Also, consumers are able to compare prices from different sites in order to get the best value for their money which if they wanted to do in the high street shops, they have to visit so many stores in order to find the best product at the best price. On the part of retailers, online retailing enables them to cut overhead costs as they do not need to pay for rent which can be very expensive (Humphries, 3013). Besserwisser (2012) also added that since online retailers cut the cost of renting shops and employing members of staff, their goods sold online are cheaper than the prices offered by high street stores, by 10% to 50% and online retailers also offer free delivery services. Also, consumers can shop online at any time of the day and this is especially helpful to consumers who work odd hours and the range of products available for purchase over the internet is without limits (Besserwisser, 2012). Also, people prefer shopping online in order to avoid crowds especially during festive periods. Huge crowds can make some shoppers do their shopping in a hurry and also create a problem of parking. High street shopping can cause some consumers to buy compulsively and they can end up buying things they do not need and in some cases consumers can settle for a product they do not want because they cannot get hold of the ones they want. Online shopping affords consumers the opportunity to buy old or unused products at very cheap prices. For example, buying antiques online guarantees one can get it at a cheaper price than that offered by high street stores. Finally, online shopping give a consumer the unique opportunity to make discreet buys as it can be done in private. For instance, consumers can buy adult toys, sexy lingerie and other private goods in private thereby avoiding the embarrassment they might feel when they make such purchases in local shops (Anamika, http://anamikas.hubpages.com/hub/Online-shopping-sites-benefits).

2.9 Benefits of high street shopping

According Humphries (2013) one of the benefits of shopping in the high streets applies mostly when consumers don’t know what to buy especially when it comes shopping for gifts. Despite the comfort shopping online brings, it does not compare to the actual feeling consumers get when they walk through aisles in the shop and physically picking out the items they intend to purchase. Also by shopping in the high streets, consumers support local trade which helps the local economy to grow (Humphries, 2013). Also, when buying goods such as shoes and clothes, consumers are able to try it out at the spot and make a decision if it fits, whether it is the right size and if they would love to have such an item. If they decide they want the product, all they need do is to return it to the hanger and carry on with their shopping. This does not apply when consumers shop online as they do not know if it fits, it’s only a gamble. And when the clothes arrive and they do not like it they have to go through the stress of returning the item and may incur shipping costs in the process. Also, one of the biggest advantages of shopping online is that consumers are able to take home their shopping immediately unlike when they shop online, when they have to wait between 1 to 30 days before they get their purchases. (Besserwisser, 2012).

2.10 Barriers of online shopping

Davidson (1997) has stated that for the new online retailing system to thrive, it must firstly deal with problems such as its delivery model. The most common method of delivering goods ord