EXECUTIVE SUMMARY The growth in online shopping necessitates that businesses understand a new breed of customer: the online

shopper. This assignment is the result of an investigation into the nature and behaviour of online shoppers and online non-shoppers in South Africa. A survey questionnaire was used based on a Linkert type scale. Insights from the data analysis were used to understand and contrast the demographic and psychographic profiles of online shoppers and online non-shoppers and to form the basis for discussion on which promotional strategies will be successful with online shoppers. Online shoppers preferred online purchases are books, vouchers / gifts, CDs / Music / DVDs, IT equipment / electronics / appliances, airline tickets and household goods / consumables. Online non-shoppers appear to avoid online shopping due to the perceived risk associated with online shopping. In terms of demograhics, Generation X (ages 35 46) continues to lead in online shopping, while education, occupation and designation appear to be indicators of likely online shopping behaviour. Income levels are not necessary indicators for online shopping tendency, but computer ownership and internet use are. The psychographic profile of the online shopper is someone who is less risk averse than online non-shoppers. Notably, online shoppers are more open to considering new products seriously than online non-shoppers. This, in addition to slightly more openness to experimentation and chance taking, indicates a higher level of innovativeness of online shoppers. Furthermore, online appear to be brand conscious and are more price conscious than online non-shoppers. Online shoppers find online shopping convenient and they would rather search the internet and browse complex sites for products online than face the inconvenience of traditional shopping and searching for products. Online shoppers appear to show higher levels of impulsiveness than online non-shoppers. This could be due to their innovativeness and risk taking tendencies, which could encourage them to purchase without thinking twice about the consequence of shopping. Many traditional promotional strategies, like loyalty rewards and cross company introductions to new products or services, appear to translate well into online shopping practice especially if they speak to the need for ease of convenience that characterise the online shopper. If these strategies are augmented by social media communications, marketers stand a good chance of being successful in promoting products and services
2

to the growing online shopping community. Ultimately though, successful promotions will be driven by the ability to build and maintain a loyal customer base.

1. 1.1 2. 3.

INTRODUCTION ........................................................................................................................5 Items mostly bought by surveyed online shoppers.................................................................5 Reasons for not shopping online ................................................................................................6 Demographic profiles of online and shoppers and online non-shoppers ...................................7 3.2 3.2 3.3 3.4 3.6 3.7 3.8 Age ...................................................................................................................................8 Gender .............................................................................................................................8 Marital status and household size ...................................................................................9 Education .......................................................................................................................10 Income ...........................................................................................................................10 Computer ownership......................................................................................................11 Internet Use....................................................................................................................11

4.

Psychographic profiles of online shoppers and non-shoppers.................................................12 4.1 4.2. 4.2.1 4.2.2 4.3 4.3.1 4.3.2 4.4 4.4.1 4.4.1 4.5 4.5.1 4.5.2 4.6 4.6.1 4.6.2 Risk Taking Tendency ...................................................................................................12 Innovativeness ...............................................................................................................14 Innovativeness: Online shoppers...................................................................................14 Innovativeness Online Non-Shoppers ...........................................................................15 Brand consciousness.....................................................................................................15 Brand consciousness: Online shoppers ........................................................................16 Brand consciousness: Online non-shoppers .................................................................16 Price consciousness ......................................................................................................17 Price consciousness: Online shoppers..........................................................................17 Price consciousness: Online non-shoppers...................................................................18 Convenience seeking.....................................................................................................19 Convenience seeking: Online shoppers ........................................................................19 Convenience seeking: Online non-shoppers.................................................................21 Variety seeking...............................................................................................................21 Variety seeking: Online shoppers ..................................................................................21 Variety Seeking: Online non-shoppers ..........................................................................22

4.7

Impulsiveness........................................................................................................................22 4.7.1 Impulsiveness: Online shoppers....................................................................................23 4.7.2 Impulsive online: Non-shoppers ....................................................................................23

5. 6. 7.

Promotional strategy for Online Shoppers................................................................................24 Major Assignment Learning ......................................................................................................28 REFERENCES .........................................................................................................................28

1.

INTRODUCTION

A total of 38 shoppers were surveyed for this research assignment. A questionnaire was used which included 17 general questions and a specific 32-item questionnaire using a Linkert type scale ranging from 5 (Strongly Disagree) to 1 (Strongly Agree). The data was analysed to gain insight into shopper profiles, the online market environment and behaviour of such shoppers. These insights were used to understand and contrast the demographic and psychographic profiles of online shoppers and online non-shoppers and to form the basis for discussion on which promotional strategies will be successful with online shoppers. It should be noted that, despite team efforts to build a diverse survey sample, members mostly interviewed colleagues and/or friends. Survey candidates were, therefore, not necessarily selected randomly, and this convenience sampling has increased the probability that the sample may not be a true representation of the population. This, however, is mitigated somewhat by the fact that, as a virtual team, members represent diverse geographical, socio-economic and professional areas.

1.1

Items mostly bought by surveyed online shoppers

Preferred online shopping products

4 9 6 Books Vouchers/Gifts CDs/Music/DVDs Gadgets 6 10 Flights Household goods/Consumables

Figure 1

Of the 38 surveyed sample, 22 shoppers indicated that they shop online. Their preferred online-purchased products (Figure 1) appear to be in line with international trends in online shopping as described in
5

the

Nielsen

Global

Online

Survey

([Link], 2011). This survey revealed that, globally, the most popular and purchased items over the internet are books. Below is a list of the six products and services mostly bought by the surveyed online shoppers as indicated by their answers to item 14 of the questionnaire. Books: 14 of the 22 (64%) online shoppers Vouchers/gifts: 10 of the 22 (45%) online shoppers CDs/Music/DVDs: 6 of the 22 (27%) online shoppers IT equipment/electronics/appliances:6 of the 22 (27%) online shoppers Airline tickets: 6 of the 22 (27%) online shoppers Household goods/consumables: 4 of the 22 (18%) of the online shoppers

2.

Reasons for not shopping online

Of the sample of 38 surveyed shoppers, 16 (42%) indicated that they did not make use of online shopping and 14 of the 16 shoppers provided reasons for not doing so. The six common reasons for not shopping online indicated by the 14 online non-shoppers who answered the question (item 15) are summarised as follows: Lack of trust in internet security Internet fraud Discomfort with credit details on the internet/ not feeling safe Preference for seeing/touching merchandise before purchasing in the traditional way Lack of interest or time Not having a credit card Their reasons for not shopping online echoed the perspective presented by Liu (2007) about the perceived risk of using the internet for purchases. Furthermore, the survey confirmed Lius assertion that consumers evaluate the internet as a shopping option in terms of relative advantage, enjoyment and risk (p. 35). Various types of risks are perceived in purchase decisions, including product risk, security risk, and privacy risk. Product risk is the risk of making a poor or inappropriate
6

purchase decision. One aspect of product risk is the risk of a poor economic decision through an inability to compare prices, being unable to return a product, or not receiving a product paid for (Jarvenpaa & Todd, 1997; Vijayasarathy and Jones, 2000). Another aspect involves product performance and is associated with the risk that a product will not function as expected (Bhatnagar, Misra & Rau, 2000; Jarvenpaa & Todd 1997; Vijayasarathy & Jones, 2000). The likelihood of purchasing on the Internet decreases with increases in product risk (Bhatnagar, et al, 2000). Another perceived risk concern is the medium of the Internet itself, rather than the consequences of purchasing a particular product. They are related to consumers' perceptions and beliefs about the Internet as a trustworthy shopping medium (Bhatnagar et al., 2000; Lim, 2003). For example, a common perception among consumers is that communicating credit card information over the Internet is inherently risky due to the possibility of credit card fraud (as cited by Bhatnagar et al., 2000; Liebermann & Stashevsky, 2002).

3.

Demographic profiles of online and shoppers and online nonshoppers

Marketers have always looked to demographic shopper profiles as a categorisation tool that provides a high degree of predictability of current and future behaviour (Canzer, 2003, p. 46). In the case of online shopping in particular, it appears there is a strong synergy between online and offline lifestyle activities (Canzer); thus, demographic information gathering and analysis will continue to play a strong role in marketing in the emerging internet shopping age.

3.2

Age
20 - 30 31 - 40 7 (32%) 4 (25%) 11 (29%) 41 -50 10 (45%) 5 (31%) 15 (39%) 51 -60 1 (5%) 2 (13%) 3 (8%) TOTAL 22 16 38

Number of online shoppers Number of online nonshoppers Total

Table 1

4 (18%) 5 (31%) 9 (24%)

The 22 online shoppers who completed the survey were an average of age of 39.5 years and the majority of the group (45%) fell in the 41-50 year age category. The 16 online non-shoppers were on average 38 years old and the majority (39%) fell into the same 41-50 year age category. This age breakdown seems to confirm the assertion of Jones and Fox (2009) on the research site [Link] that Generation X (ages 35 46) continues to lead in online shopping although Generation Y (ages 20 34) are the most frequent users of the internet.

3.2

Gender
20-30 31-40 1 1 6 3 11 41-50 5 1 5 4 15 50-60 0 2 1 0 3 Sub total 7 5 15 11 38 Male total 12 Female total 26

Male online shoppers Male online nonshoppers Female online shoppers Female online non-shoppers Total
Table 2

1 1 3 4 9

The respondents in the survey totalled 12 (36%) males and 26 (68%) females of which 7 (19%) males of the whole sample were online shoppers and 5 (13%) males online non-shoppers and 15 (39%) females were online shoppers and 11 (29%) online nonshoppers. Interestingly, 45% of the sample represent online male and female shoppers aged 31 50 and 30% are females aged 31 - 50, which reinforces Joness (2009) claim
8

about which generational and gender groups dominate internet commerce activities. However, Hashim, Ghani and Said (2009) produced a study that suggested male shoppers tend to become more online shopper compared to female shoppers. This study supports the belief that male shoppers tend to be convenience shoppers due to the high commitment on work and study. On the other hand, female shoppers tend to be recreational shoppers and would prefer to do their shopping using the conventional way (p. 26).

3.3

Marital status and household size

Online shoppers Marri ed Singl e Divor ced Wido wed Total 14 7 1 0 22 Online nonshoppers 8 7 0 1 16 Total 22 14 1 1 38

Table 3

Of the survey sample, 22 respondents indicated that they were married, 14 single, 1 divorced and 1 widowed. Proportionately, married online shoppers represent the largest of the groups by marital status. Excluding sampling issues, this could indicate that married online shoppers choose online shopping because they are busy and could have higher incomes. Their need for convenience shopping could be one of the motivators for online shopping. The average household size of online shoppers was 3.1 and of online non-shoppers 3.5. No significant inference can be made with regard to the difference in household size between the shopping groups.

3.4

Education
Education levels Matric Diploma Degree Post graduate Online shoppers 6% 11% 19% 22% Online shoppers 8% 17% 14% 3% non-

Table 4: Note: percentages have been calculated for the whole survey sample. Two persons did not indicate qualifications and were not included. Numbers have been rounded up.

The most significant learning from an analysis of the academic qualifications of the sample is that online shoppers are mostly highly educated individuals. A total of 41% of the survey sample have degrees and/or post graduate qualifications and are online shoppers. Their education level has seemingly given them access to wider internet interaction and, therefore, they trust the online environment more that less educated people do. In addition, a higher education level could be accompanied by higher earnings and greater economic freedom to try new things like online shopping. From a research perspective, Zhou, Dai and Zangs 2007 study cites a number of researches (Bagchi & Mahmood, 2004; Bellman et al., 1999; Donthu & Garcia 1999; Li et al., 1999; Liao & Cheung 2001; Susskind 2004) who assert that education level produces mixed effects ranging from no effect to a positive effect on online shopping. 3.5

Occupation & Designation

The survey sample constituted a wide variety of occupations and designations (Appendix A summary tab). To create some kind of basis for comparison, occupations and designations were summarised as manager or non-manager. This ranking resulted in 50% of online shoppers and 31% of online non-shoppers being graded as managers. Although this may be construed as an over simplified method of categorisation, one can deduce that people in management positions appear to be more likely to shop online.

3.6

Income

Of the 22 surveyed online shoppers, 13 (59%) indicated their income; their average income was R218 077 per annum. Of the 16 online non-shoppers, 13 (81%) indicted
10

their income; their average income was R320 833 per annum. The fact that online nonshoppers appear to earn more than online shoppers contrasts with a study by Hashim, Ghani & Said (2009). Their results indicate that those respondents who have higher income and are in the top management level are likely to do online shopping more compared to the other salary and job designation groups (p. 26). A number of factors could have affected the outcome of the survey of the current study: The relatively low number of online shoppers who indicated their income, the fact that the questionnaire did not facilitate revealing income by, for example, asking to mark income categories and the possibility that, because the surveys were completed by people known to the research team and because the survey was not anonymous, participants were reluctant to divulge their income.

3.7

Computer ownership

Most of the surveyed online shoppers (95%) indicated that they own computers as opposed to 75% of online non-shoppers who do not own computers. The results echo Seftons (2000) proposition that The rise of personal computer ownership and the improvement of internet access have led to the widespread use of the internet, an indication that there would be a high possibility that these internet users would shop online (as cited in Hashim, Ghani & Said, 2009, p.20). Delafrooz, Paim & Khatibi (2010) described computer owners as more active internet users who, through higher exposure to the internet, become more confident about online shopping than people who do not own computers.

3.8

Internet Use

The 22 online shopping sample indicated an average of 12,5 years of internet use and an average of 20.5 hours on the internet per week. The 16 online non-shoppers indicated an average of 9.4 years of internet use and an average of 19 hours of internet use per week. Although the difference in internet use per week seems negligible, the fact that online shoppers have, on average, been exposed to the internet for 3 years longer that the online non-shoppers, could be an indication that longer exposure to the internet creates the confidence needed to overcome the perceived risk on shopping online.
11

4.

Psychographic profiles of online shoppers and non-shoppers

4.1

Risk Taking Tendency

Comparative risk taking tendency

2.5 2.0 1.5 1.0 0.5 0.0 I would rather be safe than sorry I want to be sure before I purchase anything I avoid risky things

Average/5 online shoppers Average/5 online non-shoppers

Figure 2

They survey has resulted in a sample where the average scores related to risk taking are all between 1 (strongly agree) and 2.1. This is illustrated in Figure 2 and is indicative of a sample group where both online shoppers and non-shoppers appear to be highly aware of risks associated with shopping decisions and risk in general (item 3).

4.1.1 Risk taking tendency: Online shoppers

The survey shows that, on average, online shoppers are less risk averse than online non-shoppers. This does not imply that online shoppers are not aware of risks, but their behaviour could imply that they tolerate perceived risks associated with online shopping. They possibly take precautions where necessary, but they are not afraid to shop online simply because of the perceived risks. According to Donthu and Garcia (1999), online shoppers generally have less perceived risk in online shopping than online shoppers. Compared to online non-shoppers, online shoppers are apparently aware of the risk inherent in online purchasing to be offset by the ease of making purchases through e12

non-shoppers as online shoppers seek more

convenience and innovation and are likely to be less risk averse than online non-

Commerce. Thus, they are willing to take a chance with this innovative channel. In other words, as consumers become more knowledgeable about internet purchasing and as their internet experience increases, their perception of risk decreases and they purchase more frequently (Bhatnagar, et al, 2000). Online shoppers are seen to be less worried about risks of financial loss than online non-shoppers (Allred, Smith, & Swinyard 2006). The inference that online shoppers manage risk perceptions is supported by the assertion that Consumers tend to develop their own strategies in order to reduce the risk associated with a particular purchase. Such risk reduction strategies (or risk relievers) enable consumers to act with increased confidence when making purchasing decisions (Boshoff, Schlechter & Ward, 2011, p. 52).

4.1.2 Risk taking tendency: Online non-shoppers

The survey results show that online non-shoppers do not take risks, given that the general perception is that there are several risks associated with shopping on-line. The survey results further show that online non-shoppers are very conscious about taking risks and this is the reason they do not shop on-line: It is considered risky. The behaviour of online non-shoppers suggests that they apply their aversion to risky things in general to online shopping. This behaviour is reinforced by their need for certainty before purchasing anything and their preference for safety. Shopping online has always been associated with carrying risk. Some of the risks include privacy-related concerns, identity and credit card theft and lack of order fulfilment or order errors have all been noted concerns (Dubelaar, Jevons, & Parker 2003).

13

4.2.

Innovativeness
Innovativeness

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 I like to take chances I like to experiment with new ways of doing things New products are usually gimmicks Average/5 online shoppers Average/5 online non-shoppers

Figure 3

At some point or other, all shoppers demonstrate innovativeness when they adopt new products, new shops or new methods of shopping. The survey results (Figure 3) appear to represent a sample of people who, in general, are willing to consider new products seriously but are only moderately experimental and not very willing to take chances.

4.2.1 Innovativeness: Online shoppers

According to Hui and Wan (2004), Innovativeness is expected to play a facilitating role whereby consumers are driven to use the Internet in a new and novel way for shopping (p. 5). The survey results concur with this view and show that the surveyed online shoppers are fairly innovative and they like to try out new things more so than online non-shoppers. This suggests that, since they are less averse to risk, online shoppers tend to be more willing to try out new products. Online shopping offers a vast range of new and interesting products and online shoppers appear keen to enjoy the benefits thereof. Notably, online shoppers are more open to considering new products seriously (item 6) than online non-shoppers. This, in addition to slightly more openness to experimentation and chance taking, indicates a higher level of innovativeness of online shoppers. The survey findings echo the perception that General innovativeness reflects openness and an individual's search for new experiences and it is a significant predictor of shopping intention (Bign-Alcaiz, Ruiz-Maf, & Sanz-Blas, 2008, p. 648).
14

4.2.2

Innovativeness Online Non-Shoppers

The survey shows that online non-shoppers are less innovative than online shoppers. They do not like unknown and unfamiliar products or trying out new products. They prefer what they know. The internet offers a variety of new and unknown products that online shoppers can try out regularly. Online non-shoppers, on the other hand, do not seem willing to take chances or gamble with their money on unknown products. Online non-shoppers prefer to buy products and brands that they are used to and prefer the security of knowing the products they purchase will offer them the desired satisfaction. One of the reasons for a lower innovativeness rating of online non-shoppers could be their relationship with technology - technology readiness is another example that can be used to illustrate innovativeness the document entitled (Berndt, Saunders & Petzer, 2010).

4.3

Brand consciousness

Brand consciousness
5.0 4.0 3.0 2.0 1.0 0.0 I usually Store brands All brands purchase are of poor are about the brand name quality same products
Figure 4

Average/5 online shoppers Average/5 online non-shoppers

The survey sample shows that, although both shopping groups mostly purchase brand products, online shoppers are slightly more inclined to think that brands are similar and have more faith in the quality of store brands than online non-shoppers have (Figure 4).
15

4.3.1 Brand consciousness: Online shoppers

The survey shows that online shoppers are, on average, more brand conscious than non-shoppers. Because of the perceived risks associated with online shopping, online shoppers probably prefer to purchase established and known brands as there is somewhat less perceived risk involved hence their inclination to think that store brands could be of high quality. This concurs with Huang and Kuais (2006) assertion that online shoppers have been seen to have higher levels of brand consciousness. The survey results highlight research that suggests that high brand recognition will lower the risk to the consumer when purchasing online (Tan, 1999). As a result, individuals probably feel more reassured purchasing online if they are buying from an entity with a name they know and trust. Online shoppers appear more willing to consider store brands as quality products. This openness to store brands could be due to the broader exposure the internet offers to store brands thus, wider brand awareness. On line shoppers inclination to think that all brands are similar further supports the notion that they are brand savyy.

4.3.2

Brand consciousness: Online non-shoppers

The survey results show that online non-shoppers are somewhat brand conscious, but they are less inclined to think that all brands are similar than online shoppers do. Online non-shoppers also have less faith in the quality of store brands than online shoppers do. They don't like trying new and unknown products; hence their belief that all brands are not similar. The Internet offers a variety of new and fascinating products, but online non-shoppers seem not to want to try them as they prefer what they know. This could explain why online non-shoppers are less innovative: Because the internet has a wide variety of products they are not familiar with, they are not willing to try them.

16

4.4

Price consciousness

Price consciousness
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 I usually purchase the cheapest item I usually purchase items on sales only I often find myself checking prices A person can save a lot by shopping for bargains Average/5 online shoppers Average/5 online nonshoppers

Figure 5

The survey items appear to test price consciousness in two areas, namely the weight a customer attaches to price relative to other attributes (price importance), and customers proclivity to undertake a search for better price (price search) (Shankar, Rangaswang & Pusateri, 1999, p.3). The survey results (Figure 5) appear to present a sample of people who, on average, believe that savings can be gained from bargain hunting; although, online shoppers behaviour seems to be more price driven.

4.4.1

Price consciousness: Online shoppers

In terms of purchasing behaviour, online shoppers appear to be more price conscious that online non-shoppers. Online shoppers are price conscious when shopping online although it does not serve as an obstacle or hindrance for purchasing products that satisfy the needs of the consumer. Survey results highlight that online shoppers appear to use the internet to compare prices and find bargains on products they are shopping for. Bargain hunting becomes easier online where shoppers can shop for less, given the variety of price options online for similar products at affordable prices. Online shopping helps facilitate comparison of prices and online shoppers often look for multiple alternatives when shopping due to the lower search costs of shopping online.
17

Prices are more transparent in that consumers can find out the variety of prices in a market with considerable ease (Laudon & Traver, 2008). One benefit of reduced search costs and price transparency is that consumers can easily find out the lowest prices available for a specific product service online. A survey, conducted by Aegis Groups Synovate for Guidance asked 1,000 adults in Synovates eNation survey panel to select the most important factor when making a purchase online. Some 43% of respondents said price is the most important factor, while 18% named free shipping ([Link]). This contrasts with some research which asserts that online shoppers are perceived to be less price conscious than non-shoppers because they tend to consider finding products that satisfy their needs than looking for bargains. It is also believed that the online shoppers who are focused on utilitarian values such as convenience and timesavings tend to be less price sensitive (Swaminathan, Lepkowska-White, & Rao 2003, p. 74).

4.4.1

Price consciousness: Online non-shoppers

The survey shows that online non-shoppers are price conscious; hence, they might rather shop traditionally for items on sale and look for bargains. They are also less inclined to buy the cheapest product, like online shoppers do. Online non-shoppers are not risk takers and they keep to reasonable prices, although that does not necessarily imply cheap products. They are willing to look around for products on sale in order to save on price. Because online non-shoppers are less innovative, they could be willing to pay more for products to reduce perceived risks linked to online shopping.

18

4.5

Convenience seeking
Convenience seeking

3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 I hate to spend time gathering info on products I do not like It is complicated convenient to things shop from home

Average/5 online shoppers Average/5 online non-shoppers

Figure 6

Interestingly, this section of the survey results contains the item which has produced the single biggest differentiation between online shoppers and non-shoppers results: the acknowledgement that shopping from home is convenient. This result underlines a report by Nielsen Company ([Link]) that online shopping's primary appeal is the convenience it offers out of nearly 1,000 respondents, 81 percent indicated that the ability to shop anytime during the day was why they chose to shop online.

4.5.1

Convenience seeking: Online shoppers

Online shoppers find online shopping convenient and they would rather search the internet and browse complex sites for products online than face the inconvenience of traditional shopping and searching for products. They enjoy the convenience of being able to shop in the comfort of their homes, at any time and with less effort of having to leave their houses to look for something at the shops, which they might not even find there. Their dislike of information gathering further supports their online shopping behaviour. Like other direct shopping methods, the use of the internet to shop is associated with convenience. In-home or online shoppers enjoy multiple forms of convenience (Darian, 1987). They include less shopping time, flexibility on when they shop, less effort physically, and easier response to advertising or promotions. Similarly, convenience is based on consumers being able to find what they want in a short period of time, with less effort, and being able to shop at any time of day (Eastlick and Feinberg, 1999).
19

Convenience appears to be one of the highest attractions to shopping online (Girard, Korgaonkar, and Silverblatt, 2003). De Swardt and Wagner (2008) asserted that both the ease of access and the wealth of free information attract shoppers to the online environment: Other advantages of the internet include the availability of a wealth of information from various sources on product features, quality of products, and reliability of a wealth of information from various sources on product features, quality of products, and reliability of different suppliers (p. 69).

20

4.5.2

Convenience seeking: Online non-shoppers

Online non-shoppers find direct shopping as convenient as online shoppers find online shopping. They enjoy going out and looking for information about products more than online shoppers do. They do not like complicated things, which seems to reinforce their lack of innovativeness. Online non-shoppers perceive direct shopping as a convenient way of shopping. For online non-shoppers, moving from one shop to another looking for products appears to be convenient. They can also then physically touch and see the products they are purchasing.

4.6

Variety seeking
Variety seeking

3.0 2.5 2.0 1.5 1.0 0.5 0.0 I like to try different things I like a great I like new and different deal of styles variety

Average/5 online shoppers Average/5 online non-shoppers

Figure 7

Figure 7 shows a survey sample that, on average seeks variety: All the scores for both shopping groups were below 3 on the Linker-type scale.

4.6.1

Variety seeking: Online shoppers

Online shoppers are variety seeking and it is highlighted in the survey that they like to try different and new things. This deduction reinforces the innovativeness and risk tolerance level of this shopping group. Their higher need for variety and new things than online non-shoppers could be due to the access to a vast array of products available

21

online; however, this need for variety could also be what attracted them to online shopping in the first place. Given the ease of internet searches versus traditional shopping searches, it follows that online shoppers would search more extensively than their online non-shopper counterparts: The variety seeker is substantially more motivated by variety seeking across retail alternatives and product types and brands than any other shopping type (Rohm & Swaminathan, 2004, p. 748). In general, online shoppers have higher levels of variety seeking than non-shoppers (Donthu & Garcia, 1999). This is consistent with other tendencies of the online shopper, including their recreational nature and their lower risk aversion.

4.6.2

Variety Seeking: Online non-shoppers

The survey shows that online non-shoppers also like variety although they are not as variety seeking as online shoppers. Since they are not innovative and do not like taking risks, variety works for them for as long as they know or are aware of the brands they want and can physically touch and see the products they are purchasing.

4.7

Impulsiveness
Impulsiveness

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 I often make I like to I think twice I always unplanned purchase before stick to my purchase things on a committing shopping whim myself lists

Average/5 online shoppers Average/5 online non-shoppers

Figure 8

Both shopping groups represented in the survey sample appear to be impulsive to some extent (Figure 8), which could be indicative of the shopping culture of the population as whole.
22

4.7.1

Impulsiveness: Online shoppers

Online shoppers appear to show higher levels of impulsiveness than online nonshoppers. This could be due to their innovativeness and risk taking tendencies, which could encourage them to purchase without thinking twice about the consequence of shopping. Consumer behaviour literature refers to impulse buying as extraordinary, emotionsaturated buying that takes place largely without regard to financial or other consequences (Wood, 2005, p. 270). Although online shopping facilitates impulse buying by offering wide varieties of products and personalised suggestions for products, Chen (2008) found that impulse buying was often related to product type. For example, online shoppers might show impulsive shopping behaviour with goods like CDs and books and far less impulsive behaviour with goods like computers and other electronic equipment. Interestingly, it appears that online shoppers enjoy impulsive shopping (item 21), which indicates that they are, in fact, aware of their shopping behaviour. This awareness could indicate that online shopper may be impulsive shoppers, but their whims might under control through awareness.

4.7.2

Impulsive online: Non-shoppers

The survey shows that online non-shoppers are not as impulsive as online shoppers. They may not always purchase planned products, but they do not get carried away when purchasing products. They are more inclined to think twice about a purchase than online shoppers are, which suggests that they are not impulsive in their shopping. Their lower rating for enjoying impulsive shopping implies a preference for planned purchases and resonates with online non-shoppers tolerance of non-convenient shopping. It should be noted that, despite the lower rating for impulse shopping than online shoppers, online-non shoppers in fact do demonstrate some impulsive shopping behaviour.
23

5.

Promotional strategy for Online Shoppers

Canzer (2003) defined promotion as any communications activity that is designed to positively influence the buying decision-making behaviour of customers; it includes advertising, personal selling, sales promotion, publicity and public relations (p. 253). The questionnaire items that could provide clues as to which promotional strategy will be successful with online shoppers can be divided into three areas: response to advertisements (items 24 26), shopping enjoyment (items 27 29) and promotional communication preferences (items 30 32). The differences in responses between online and non-online shoppers have been used to infer which promotion methods might be more successful with online shoppers.

Advertisement perceptions
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Advertisements provide useful information I think that I usually do not pay advertisements are attention to often deceptive advertisements

Average/5 online shoppers Average/5 online non-shoppers

Figure 9

The survey results (Figure 9) suggest that successful promotions for online shoppers should not be too reliant on advertisements for success and that marketers need to take heed of these shoppers inclination to see advertisements as deceptive. However, the sample did indicate that that they are quite likely to pay attention to advertisements. A 2009 study of how online advertising works by Fulgoni and Mrn suggested that online display advertisements can generate substantial lift in site visitation, trademark search queries, and increases in both online and offline sales (p. 142). Their empirical research further led them to assert that online search advertising campaigns in conjunction with display advertisements produce synergy, with the effect of the combination being greater than the sum of the two separate campaigns (p. 142). The
24

deduction here is that a mix of search and display advertisements should form part of a successful online promotion. However, Canzer (2003) warned that the online advertising model is generally regarded as a weak one to depend on because viewers often disregard advertisements when they visit websites or receive them as email (p 254).

Shopping enjoyment
4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Shopping is fun I get a real high from shopping Buying things makes me happy

Average/5 online shoppers Average/5 online non-shoppers

Figure 10

The sample surveyed in this study does not reveal a great enjoyment derived from shopping (Figure 10). Prashad and Arysari (2009) emphasised that the convenience factor has emerged as the prime determinant in both willingness to buy and patronage of online stores (p. 80) and that marketers should consider this factor when designing strategies. This is in line with the convenience seeking nature of the surveyed online shoppers pointed out before.

Communication preferences
5.0 4.0 3.0 2.0 1.0 0.0 Phone soliciations are an invasion of my privacy I enjoy receiving junk mail I often use catalogue to shop for products. Average/5 online shoppers Average/5 online non-shoppers

Figure 11

In terms of the preferred promotional communication options (Figure 11) that might be successful with online shoppers, the surveyed sample is not open to phone solicitations,
25

do not enjoy receiving junk mail and use catalogues somewhat to shop for products. Perhaps the best route to successful marketing communication is to move away from the traditional communications and to consider the recommendation of Owen and Humphrey (2009) away from static promotions that are directed from an organization toward a group toward tactics that rely on a message being communicated among members of a target audience in an online social network (p. 8). They proposed that social media be included in the development of successful online shopping communication strategy. In terms of online shopping promotions, a company could, for example, include communications about offers on their product or company Facebook pages or blogs. Martin (2010) suggested creating special packages for social media audience(s), and

get(ting) feedback from customers and prospects on what kinds of sales or promotional offers theyd most like to receive (p. 129). Because all sales happen within a community of some kind, Martin proposed using social media to make customers feel like VIPs inside the inner circle, receiving special benefits not available to everyone (p. 130). Social media like Facebook, Twitter and blogs can be used for early alerts to online shoppers about discounts and special offers before other customers receive them. A combination of social media communications, opt-in email marketing off websites and direct response mailings could play a key role in building a strong online promotions strategy. Online shoppers who use the same site regularly can be triggered to purchase other product categories through cross-company initiatives (Perreault & McCarthy, 2003). A company which has successfully managed to do this is Kulula (www. [Link]): Shoppers who use the website to book flights, are now presented with the option of adding discounted car hire and hotel bookings to their purchase. The ease of the added purchase makes this a popular option for convenience seeking online shoppers. Another company which uses similar promotional strategies is [Link] and [Link]. For example, when ordering a bunch of flowers, the shopper is offered the option of adding a small box of chocolates to the purchase. Again, the ease of accepting the promotion appeals to the online shopper. Another promotional strategy which translates well into the realm of online shopping is cashback rewards for loyal shoppers.
26

Examples

like

the

thriving

websites

[Link] and [Link] prove that brand loyal online customers respond favourably to such offers. Kims 2010 study found that that brand loyalty and store image were consistently rated as unfavourable strategies in Internet shopping (p. 145). Another study (Koas, 2005) revealed again the importance of establishing and maintaining loyalty by firms that are competing in todays information-rich markets (and that) positive profits are attainable for firms with loyal customers even in a market where customers search for better prices (p. 129). Koas further emphasised the profits are proportional to the size of the loyal segment size, indicating that higher profitability can be attained through the establishment of higher loyalty. The findings also make it obvious that firms with a large percentage of loyal customers should never attempt to use price promotion to attract switchers (p. 129). Zhang and Wedelp (2009) did a comparative study of online and non-online promotions and reaffirmed the that loyalty promotions are more profitable in online stores than in offline stores (p.200). Furthermore, people responded to online loyalty promotions where they were rewarded with discounts for purchasing the same product as they have before; they were also more likely to redeem online promotional offers than non-online offers. In conclusion, many traditional promotional strategies like loyalty rewards and cross company introductions to new products or services appear to translate well into online shopping practice especially if they speak to the need for ease of convenience that characterise the online shopper. If these strategies are augmented by the inclusion of social media communications, marketers stand a good chance of being successful in promoting products and services to the growing online shopping community. Ultimately though, successful promotions will be driven by the ability to build and maintain a loyal customer base.

27

6.

Major Assignment Learning

Completing this assignment proved that surveys are tougher that thought. Results can so easily be skewed by sample selection as opposed to randomness. Furthermore, survey data analysis can easily be influenced by the preconceived ideas of those doing the analysis: It appears that people try to read into data what they believe to be true. The use of reference material and wide reading mitigates this tendency and is a strength of following a research-based approach. The challenges facing marketers who want to build successful strategies with online shoppers lies in understanding the realities of online shopping and non-shopping behaviour and in building and maintaining a loyal customer base. The challenge in attracting online non-shoppers to the online shopping environment is to respond the risk perceptions related to online shopping in general.

7.

REFERENCES

Allred, C. R., Smith, S.M. & Swinyard W.R. (2006). E-shopping lovers and fearful conservatives: A market segmentation analysis. International Journal of Retail & Distribution Management, 34(4-5), 308-333. Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Berndt, A.D., Saunders, S.G. & Petzer, D.J. (2010). Readiness for banking technologies in developing countries. Southern African Business Review, 14(3): 47 76. Available from: EBSCOhost database: [Link] (Accessed 14 April 2011). Bhatnagar, A., Misra, S. & Rao, H.R. (2000). On risk, convenience, and Internet shopping behavior: Why some consumers are online shoppers while others are not. Communications of the ACM, 43(11), 98-105). Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Bign-Alcaiz, E., Ruiz-Maf, C., Alds-Manzano, J. & Sanz-Blas, S. (2008). Influence of online shopping information dependency and innovativeness on internet shopping adoption. Online Information Review, 32(5): 648 667. Available from: [Link] (Accessed: 06 April 2011). Boshoff C., Schlechter C. & Ward S.J. (2011), Consumers perceived risks associated with purchasing on a branded web site: The mediating effect of brand knowledge. South African Journal of Business Management, 42(1): 50 59. Canzer, B. (2003). E-Business: Strategic Thinking and Practice. Boston: Houghton Mifflin.

28

Darian, J.C. (1987). In-home shopping: Are there consumer segments? Journal of Retailing, 63(2), 163-186. Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Delafrooz,, N., Paim, L.H. & Khatibi, A. (2010). Students online shopping behavior: An empirical study. Journal of American Science, 6(1). Available from: [Link] (Accessed 24 April 2011). De Swart M. & Wagner C. (2008). Factors influencing the choice to shop online: A psychological study in a South African context. New Voices in Psychology, 4(2): 68 82. Available from: [Link] (Accessed 11 April 2011). Donthu, N. & Garcia, N. (1999). The internet shopper. Journal of Advertising Research, 39(3): 52-58. Available from: EBSCOhost database: [Link] (Accessed 17 April 2011). Dubelaar, C., Jevons,C. & Parker, L. (2003). Personal information privacy and shopping behavior on the internet. Journal of Asia Pacific Marketing, 2(1): 65 71. Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Fulgoni, G. & Mrn, M. (June 2009). Wither the click? How online advertising works. Journal of Advertising Research, (49)2: 134 142. Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Hashim, A., Ghani, E.K. & Said, J. (2009). Does consumers demographic profile influence online shopping?: An examination using Fishbeins theory. Canadian Academy of Oriental and Occidental Culture, 5(6): 19 31. Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Huang, W. & Kuai, L. (2006). The in-flight shopper. Journal of Air Transport Management, 12(4): 207 211. Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Hui, T.K. & Wan, D. (October 2004). The role of consumer innovativeness in the adoption of internet shopping in Singapore. The Internet Business Review, 1. Available from: [Link] (Accessed 30 April 2011). Jarvenpaa, S.L., & Todd, P.A. (1997). Is there a future for retailing on the Internet? In R.A. Peterson (Ed.), Electronic Marketing and the Consumer (139 154). Thousand Oaks, California: SAGE Publications, Inc. Jones, S. & Fox, S. (28 January 2009). Generations online in 2009. Pew Internet & American Life Project. Available from: [Link] (Accessed April 19 2011). Kim, I. (2010). Consumers rankings of risk-reduction strategies in E-shopping. International Journal of Business Research, 10(3): 143 148. Available from: EBSCOhost database: [Link] (Accessed 17 April 2011). Koas, C. (2005). A model of internet pricing under price-comparison shopping. International Journal of Electronic Commerce, Fall 10(1): 111134. Available from: EBSCOhost database: [Link] (Accessed 17 April 2011).

29

Laudon, K.C. & Traver C.G. (2008). E-Commerce: Business, Technology, Society, 4th ed., Upper Saddle River, NJ: Prentice Hall. Liebermann, Y, & Stashevsky, S. (2002). Perceived risks as barriers to Internet and ecommerce usage. Qualitative Market Research: An International Journal, 5:291 300. Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Lim, N. (2003). Consumers' perceived risk: Sources versus consequences. Electronic Commerce Research and Applications, 2:216 228. Available from: [Link] (Accessed 6 April 2011) Liu, C. (2007). Modeling Consumer Adoption of the Internet as a Shopping Medium: An Integrated Perspective. New York: Cambria Press. Martin, G.Z. (2010). 30 Days to Social Media Success. New Jersey: Career Press. Nielsen Global Survey. (2011). Available from: [Link] (Accessed 14 April 2011). Owen, R. & Humphrey, P. (2009). The structure of online marketing communication channels. Journal of Management and Marketing Research, 13(1): 73 83. Available from: EBSCOhost database: [Link] (Accessed 13 April 2011). Perreault, W.D. Jr. & McCarthy, E.J. (2003). Applications in basic marketing: Clippings from the Popular Business Press. New York: McGraw-Hill Irwin. Perreault, W.D. & McCarthy, E.J. (2003). Essentials of Marketing: A Global Managerial Approach. New York: MCGraw-Hill. Prasad, J.S. & Aryasri, A.R. (2009). Determinants of shopper behaviour in E-tailing: An empirical analysis. Paradigm l, XIII(1) January-June. Available from: EBSCOhost database: [Link] (Accessed 17 April 2011). Rohm, A. & Swaminathan, V. (2004). A typology of online shoppers based on shopping motivations. Journal of Business Research, 57(7):748 757. Available from: [Link] (Accessed 12 April 2011). Shankar, V., Rangaswamy, A. & Pusateri, M.(1999). The online medium and price sensitivity. E-Business Centre working paper (Penn State Smeal Centre of Business Administration and the School of Information Sciences and Technology). Available from: [Link] (Accessed 22 April 2011). Swaminathan, V., Lepkowska-White, E. & Rao, B.P. (2003). The internet and consumer buying behavior: A research framework and analysis. In Current Topics in E-Commerce, Charles Steinfield, ed., West Lafayette, IN: Purdue University Press, 64 84. Tan, S.J. (1999). Strategies for reducing consumers' risk aversion in internet shopping. Journal of Consumer Marketing, 16(2): 163-180. Available from: EBSCOhost database: [Link] (Accessed 13 April 2011).

30

Vijayasarathy, L.R. & Jones, J.M. (2000). Print and catalog shopping: Assessing attitudes and intentions. Internet Research, 10(3): 191-202. Available from: [Link] (Accessed 19 April 2011). Wood, M. (2005). Discretionary unplanned buying in consumer society. Journal of Consumer Behaviour, 4 (4): 268 281. Available from: EBSCOhost database: [Link] (Accessed 23 April 2011). Zhang, J. & Wedel, M. (2009). The effectiveness of customized promotions in online and offline stores. Journal of Marketing Research, (2): 180 225. Available from: EBSCOhost database: [Link] (Accessed 17 April 2011). Zhou, L., Dai, L. & Zhang, D. (2007). Online shopping acceptance model A critical survey of consumer factors n online shopping. Journal of Electronic Commerce Research, 8(1). Available from: EBSCOhost database: [Link] (Accessed 9 April 2011). Websites: [Link] [Link] [Link] [Link] [Link]

31