Trend of Online Retailing - Research Proposal Example

1. INTRODUCTION There have been increasing trend of online retailing among the fashion retailers. Some prime examples in this regard are of Hennes and Mauritz, Marks and Spencer, and many other. It has almost become essential for all fashion retailers to offer the option of online shopping to the consumers and customers. Different fashion retailers are capitalising on this new business model. There are different reasons and factors behind this shifting business model among the fashion retailers. These factors include the technological advancements, changing consumer behaviour and preferences, increasing competition, and many other. This research study aims to identify and explore the different factors behind the increasing online retailing trend among the fashion retailers and its impact on the consumer behaviour and performance of the fashion retailers. 2. LITERATURE REVIEW 2.1. Trend of Online retailing Trend of online retailing has been increasing at a rapid pace in the last few years. The concept of online retailing has encouraged many businesses to come up and capitalize on the opportunities of online retailing (Fisher, Annemieke, & Bentley 2007). The idea of online retailing has not only enticed new businesses but even existing businesses have started focusing on their online stores. Although there are different industries that have been focusing on online retailing, however among all these fashion retailers are among the top most industries that have been using online retailing to encourage consumers to buy online (Wauters, 2011). Retailers particularly fashion retailers that are having their presence physically are trying to expand to the online arena as well. With the passage of time and with the success of e-commerce, retailers including fashion retailers have also started focusing on the m-commerce as well. M-commerce platform is a new way to engage consumers to buy the products. Retailers have introduced innovative online selling techniques in the last few years to make sure that online retailing is a success (Rowley, 2009). Some of these techniques include group sales and other daily deals, and special offering on special occasions etc. Another trend for fashion e-retailing is combined use of coupons or vouchers codes, connected with social media and it has also been successfully greeted by the consumers (Bhardwaj, & Fairhurst, 2010). The online retailing use social media such as Facebook, twitter and YouTube and other social media sites to engage with consumers and to attract them (Ha, & Stoel, 2012). Recently introduced “magalogue” which is a combination of catalog and magazine is connected with social media. Social media is playing a great part in fashion e-retailing; Facebook is the second largest traffic source after Google. But fashion products are not commoditized, like electronics items; such as iphone, ipad. In fashion sector consumers show more loyalty to brands than other sectors of retailing (Rowley, 2009). 2.2. Issues and challenges of online retailing As retailers have expanded their business to the online arena, they have to face and deal with new challenges and issues. Some of the issues that retailers have to face are less knowledge and understanding for establishing an online business and to operate it effectively. Therefore retailers that have expanded or started their online store are facing the issues of managing an online retail store effectively (Gerber, & Saiki, 2010). Initial cost for setting an online appearance does not seem to be a major issue for the retailers but the important issue is to make an effective completion of consumer’s online purchases, from attracting consumers to delivering the products at the doorstep of the consumers. Therefore, retailers are facing issues not only related to IT but related to logistics as well (Rao, Goldsby & Iyengar, 2009). Besides, delivery failures, security and privacy are other considerable issues and challenges for online retailers. Researchers have found that consumers are reluctant to share their personal information and credit card information online therefore it is important for retailers that are managing their online store or planning to open new online store to manage such issues. 2.3. Consumer behavior Consumer behavior is a complicated concept to understand (Jobber, & Fahy, 2006). However, it can be defined as a changing interference among consumer’s cognitive, behavioral and environmental factors (Slack, Rowley, & Coles, 2008). Consumer behavior has now become more complex than traditional consumers, because of advancement in technology, along with the introduction of internet and globalized economy (Neal, Quester, & Hawkins, 2004). Online consumer behavior refers to buying behavior of consumers that influence while shopping online. Online shopping behavior has been referred by most of researchers such as (Sun, 2009) to cognitive (psychological) factors, for making a purchase and transaction on the internet. In an online buying process the potential consumer identify need for some goods, then go online and search for information related to the product that can meet the needs. At this stage, consumers are attracted by information related to products they want to buy. In next step, they compare alternatives and select goods that best fit their desired needs and criteria. At last transaction is occurred and after-sale services are provided (Tanner, & Raymond, 2010). 2.4. Purchase decision making process Consumer online purchasing decision starts with need recognition; as traditional consumer purchasing decision, the difference between traditional and online consumer purchasing decision is that they have control over information, they want to get (Kotler, & Armstrong, 2007). In online stimulants are promotions, reviews, notifications etc. In the next step of purchasing decision, a consumer search for information. In traditional way consumer spend huge efforts to search for information. But online shopping has made it much easier to visit multiple websites or online stores and know about the products or services offered by different companies. Other advantage for online consumer is that all these information can be attained by a few clicks and in few seconds consumers can have bulk of information they want to seek. After getting desired information, the next step is evaluation for alternatives consumers made after getting knowledge about the desired need. In this step consumers compare different brands, pricing, quality and other features they prefer. Online consumers compare a wide variety of brands for sensitive and expensive products. Online consumers get access easily to comparative information. The specific measures for evaluating different alternatives for online consumers includes trials, testimonials, cross-sites comparisons, demos etc (Cachon, & Swinney, 2011). After comparing alternatives next consumers make purchase decisions. Purchase decisions are easier with online purchasing than traditional purchases as in traditional purchases, customers have to stand in line and visit the store physically, find the product etc. However, for online consumer purchase, the process is easier as the customer can find the product online and pay through credit cards and the product will be received at the doorstep. Thus, online purchases save the customer from different complexities. Moreover, the time required to purchase products online is less than the time required to buy products traditionally (Brengman, & Willems, 2009). 2.5. Characteristics of consumers Characteristics of consumers are important for marketers to understand. Characteristics of consumers’ influence the consumer buying decision therefore it has become an important topic for researchers to explore and study (Hollensen, 2004). Consumer behavior is affected by four categories. That includes; social factors, cultural factors, personal factors and psychological factors. The first category; cultural factors are complex and consist of believes, customs, ethics etc. The second category of characteristics consists of social factors; like friends, family and groups etc. The third category is psychological factors which include; motivation, learning etc. For online consumers personal factors and psychological factors are accounted more. The personal factors include; age, income, education, occupation etc. All these characteristics are important and influence the consumer buying process and consumer decision while purchasing any product or service whether online or offline (Ghandour, Benwell, & Deans 2010). For an online consumer, research reveals that there are additional characteristics that influence the decisions. Most important among these characteristics are personality traits such as; self efficacy, perceived security, privacy and personal innovativeness of information technology (Sabir, 2010). Self efficacy means the ability and resources available to a consumer to search online. Demographics factors also accounted for shaping their behaviors and they tend to influence the consumer behavior and buying decision. Retailers that are expanding their products and services to online arena need to understand the market and the characteristics of consumers because consumers are the ones that would be buying the products and without understanding their characteristics it would be difficult for the retailers to keep attracting consumers in the long run (Hawkins, & Mothersbaugh, 2009). 2.6. Online shopping trends In order to analyse the online shopping trends, it is important to first understand the difference between traditional and online retail stores because this would result in better understanding of the changes in the trends and shifts from traditional Bricks and Motor shops to online retailing stores (Mooij, 2000). Although, there are significant differences between the two business models or styles of business however from the perspective of consumers, the most important difference between these two mediums of shopping is ease of use and time saving (Christopher, & Huarng, 2003). Online shopping allows consumer to search a variety of products with less efforts and time. Secondly; consumers are able to get quick information about products, brands that help them to do shopping effectively. Third; they can compare prices, product and features of different brands online very easily in comparison to going physically to a store and then doing the comparison. Online stores display their products 24/7 without time constraint. Moreover, consumers are able to read reviews and testimonials of products online easily than traditionally. Thus they are able to know about how the product has performed and whether it has been able to satisfy the consumers or not. Therefore, consumers today are able to know a lot more about the product through internet and this allows them to be better aware about the product. 2.7. Impact of online retailing and shopping on consumer behavior Electronic commerce has become important for both organizations and consumers, due to expanded technology and expansion of businesses in different parts of the world along with easier ways to deliver the products around the world. The use of online businesses by corporations and individuals has made the idea of e-commerce a successful one. Researchers have found that consumers behavior shaped by online shopping through website quality and brands, both impacts consumers intentions to purchase online. Website layout and brand both associated with consumer perceived risks and trust. Moreover, consumers have welcomed the concept of online shopping and online retailing because of the benefits it offers to the consumers (Kotler, 2009). Other medium for making consumer behavior to buy online are exposure of advertisement and marketing on different website and social media webs especially. With emergence of social media, retailers have been able to communicate directly with the consumers and this has helped in improving the relationship with the consumers. Although, online retailers are facing a tough competition as there has been an increasing number of retailers entering the online market. However the industry of online retailing is expected to further increase in the years to come and with the world economy recovering from recession, it is expected that the industry would further grow in the years to come. However it is important for retailers to manage the challenges and issues in order ensure success of the industry. 3. RESEARCH PROBLEM AND RESEARCH QUESTIONS The aim of the research study is to investigate and explore the increasing online retailing trend among the fashion retailers and its influence on the consumer behaviour. It is important to highlight here that there have been ongoing increasing trend of online retailing among different fashion retailers. The fashion retailers are looking for different methods and strategies to reach large set of customers and at the same time reduce the overall cost of operations. Online retailing provides fashion retailers with the opportunity to approach or reach different market segments and consumers without establishing a physical store or outlet in that location. This on one hand provides the fashion retailers with the opportunity of reaching and exploring new markets and on the other hand allows them to reduce the overall cost of operations as they do not have to maintain different physical outlets or stores. It is important to explore and understand different factors and elements which are responsible for this changing trend of online retailing among the fashion retailers. This in turn will allow the fashion retailers and strategy makers to come up with effective and efficient strategies according to the changing situations and factors. At the same time it is important to investigate and understand the impact of online retailing on the consumer behaviour and buying attitudes. The consumers are the most important factor responsible for the success or failure of any organisation and hence it is important to keep in consideration the preferences and requirements of the consumers before coming up with any strategy. For this reason it is important to understand and comprehend the relationship between the online retailing and shopping and the consumer buying behaviour. This research study will explore and identify the factors responsible for the increasing online retailing among the fashion retailers and the link or connection of the online retailing with the consumer behaviour and attitudes. The associated research objectives which will be accomplished or fulfilled by the research study are as follow: To explore the impact of the online retailing on the consumer behaviour To investigate the reasons behind the increasing online retailing trend among the fashion retailers To identify and explore and impact of the online retailing on the growth and performance of the fashion retailers The research questions which will be explored by the research study are as follow: What are the reasons behind the increasing online retailing trend among the fashion retailers? How online retailing impact or influence the consumer behaviour? What is the impact of the online retailing on the growth and performance of the fashion retailers? 4. RESEARCH PHILOSOPHY AND STRATEGY The research study will be based on both qualitative and quantitative research methods in order to come up with better findings and results. According to Saunders, Thornhill, and Lewis (2009) the quantitative research is directly associated with the positivist research philosophy and works on the generation of research answers with the help of logical data collection and analysis methods. At the same time the qualitative research is directly associated with the interpretive research philosophy and works on the generation of several views and opinions related to the research topic under investigation (Patton, 2002). In this research project the researcher will use both positivism research philosophy as well as interpretive research philosophy. This will allow the researcher to come up with more thorough and detailed research results and findings. The positivism research philosophy revolves around the generation of the data and information through systemic manner, elaboration and comprehension of the related theories and concepts, and finally the application of these elaborated theories and concepts on the data collected in order to come up with final results and findings (Saunders, Thornhill, and Lewis, 2009). In reference to this research project the researcher will collect the relevant data which will be then analysed on the basis of the already established theories and concepts in the literature review. The researcher will employ a mix method strategy in order to accomplish the research objectives and explore the answers to the research questions. Hence, the researcher will use both qualitative and quantitative research strategy for the research project. This in turn will allow the researcher to come up with more generalised research findings (Creswell, 2003). For this reason the researcher will use both questionnaires and personal interviews as the instruments for collecting the data. The questionnaires and personal interviews both fall under the category of the survey research method. The survey research method will allow the researcher to gather relevant data in the quantitative form and analyse it with the help of the qualitative research methods (Glass, 1976). Apart from this the research method of survey is beneficial for the research studies based on the descriptive and explorative research purpose (Aanstoos, 1983). According to Maylor and Blackmon (2005) the survey research method and strategy helps the researcher in the overall process of identification of different causes and reasons behind the relationships among the variables which are being investigated by the research study and hence allows the researcher to come up with different models in relation to the identified relationships among the variables. 5. RESEARCH METHOD 5.1. Research Approach: The purpose of the research is a mixture of descriptive and explorative research as the research study will explore the relationship between the online shopping and consumer behaviour. At the same time the researcher will describe and comprehend the current trends and situation in the online retailing fashion industry. Along with this, the researcher will implement and follow the scientific research approach in order to do justice with the research project. The scientific research strategy can be directly associated with the deductive research approach or method. Apart from this, according to Sekaran (2006), the scientific research strategy is based on the concept that it is possible to comprehend anything which can be measured (Jankowicz, 2005). The scientific research study will allow the researcher to remain unbiased during the process of collection and analysis of data (Crabtree, 1992). The researcher will use both primary and secondary data in order to accomplish the aim and objectives of the research study. With the help of the secondary data and extensive literature review the researcher will able to come up with a conceptual framework and will identify important variables. On the other hand the primary data will allow the researcher to test the conceptual framework and come up with relationship model among the variables under investigation (Stewart, 1993). 5.2. Research Instruments: The researcher will use online administered questionnaires and personal structured interviews as research instruments for collecting the relevant data and information. The online administered questionnaires will allow the researcher to get hand on the data related to the relationship of the online retailing and the consumer behaviour and different factors responsible for the increasing trend of online retailing among the fashion retailers. On the other hand the personal interviews will allow the researcher to get further insights and details regarding the research questions and research topic under investigation. 5.3. Sampling: Convenience sampling method will be used in order to select the target respondents because of the limited availability of time and financial resources. Target respondents for the online questionnaires will be the consumers and customers who indulge in the shopping of fashion products from different fashion retailers. The sample size for online administered questionnaires will be 300. On the other hand the target respondents for the personal interviews will be the managers and employees of the leading fashion retailers operating in UK. The sample size for the personal interviews will be of 5 target respondents. 5.4. Proposed Methods of Analysis: The data gathered with the help of the online administered questionnaires will be analysed with the help of charts, tables, and graphs generated through Microsoft Excel. On the other hand, the data gathered through the personal interviews will be descriptively analysed in order to generate further insights regarding the research questions and topic under investigation. 6. ACCESS AND ETHICS The data and information will be generated with the help of the questionnaires administered online. Apart from this personal interviews will be conducted of the managers and employees of the leading fashion retailers. However, it is important for the researcher to keep in consideration the different ethical requirements and limitations associated with the research project. In reference to this research project the researcher will make sure that the personal information and data of the respondents is kept confidential and private. 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