Brick-and-Mortar vs. E-commerce: An Investigation into Shopping Preferences of Indian Millennials
Table of Contents
- Background of the Indian retail sector…………………………….
- E-commerce in India……………………………………………….
- The role of external funding ……………………………………….
- Major e-commerce players in India…………………………………
- The issues associated with Indian e-commerce………………………
- Research Contribution and Objectives……………………………….
- Thesis Outline…………………………………………………………
- Theoretical Background…………………………………………………………
- Impact of Discount………………………………………………………
- Impact of Website quality………………………………………………
- Impact of Hedonic and utilitarian shopping value…………………….
- Impact of Choice……………………………………………………….
- Impact of Trust…………………………………………………………
- Impact of Delivery………………………………………………………
- Research Methodology and Design………………………………………………
3.5 Survey Design…………………………………………………………………
3.6 Types of Questions…………………………………………………………….
4.0 Data Analysis and Findings…………………………………………………………
4.2 Sample Description…………………………………………………………….
4.3 The impact of Discount……………………………………………………..
4.4 The impact of Trust………………………………………………………..
4.5 The impact of Choice………………………………………………………
- Limitations, Further Research and Conclusion……………………………………
5.2 Further Research……………………………………………………………….
6.1 Survey Design……………………………………………………………………
This research contributes to the understanding of the shopping preferences of Indian Millennials with respect to Brick-and-Mortar vs. E-commerce. In particular, this study aims to understand the reasons that are stopping the largest Millennial population of the world from shopping online. The shopping categories that are considered a part of this study are apparels, footwear & accessories and electronics. There are several aspects that are considered important by consumers around the world before indulging in shopping. In a densely populated and diverse country like India, the majority prefers Brick-and-Mortar even after the availability and convenience of online shopping. To understand the reasons, this research has used surveys to collect data from the sample population.
The research suggests there is one particularly major reason that is stopping the Indian Millennials from shopping online. Their preferences are based on the shopping categories. Indian millennials are more likely to shop standardized products such as electronic gadgets at an e-commerce store but the majority of the respondents are not in favor of shopping apparels or footwear at e-commerce stores even if it available at a lower price and better convenience. They associate an experience with shopping products under the apparels and footwear category that goes missing in the case of buying it online. On the other hand, Brick-and-Mortar is the essence of this experience which makes it the preferred choice by the Indian Millennials.
Background: Indian retail sector
The retail sector of India, the second most populated country of the world is expanding exponentially. In terms of value, it is expected to nearly double to US$ 1 trillion by 2020 from US$ 600 billion in 2015 (Ibef.org, 2017).
A.T. Kearney’s annual look at emerging retail markets puts India at the top of the list, ahead of China, which has been a longtime index leader (Thomas, 2017). The report considers the best opportunities for retail investments globally and ranks the top 30 developing countries based on the firm’s findings for market attractiveness. GDP per capita, population, national retail sales and country risk are a few factors taken into consideration. India’s expanding economy, coupled with booming consumption rates, urbanizing population and growing middle class, are what moved the country to the top spot, A.T. Kearney explained.
The Indian retail industry can be broadly classified into two categories namely:
- Organized retail sector – It includes traders/retailers, who are licensed for trading activities and registered to pay taxes to the government. It includes online shopping. The organized retail sector which is estimated to reach approx. 18-20% of the total sector, by 2020, is growing at a high rate of 20%-25% per annum (The Economic Times, 2017).
- Unorganized retail sector – It consists of unauthorized small shops – conventional Kirana shops, general stores, corner shops among various other small retail outlets. It remains as the radiating force of Indian retail industry but the scenario is changing gradually.
The country has witnessed a change in the consumption patterns which has been driven by increased urbanization, expansion of the middle class & increased exposure to global lifestyle due to technological advancements (Cbre.co.in, 2017). India’s retail market is robust and this growth has not only been witnessed in the major metropolitan cities, but is also spreading across numerous tier 2 and tier 3 locations, providing enhanced business opportunities for retailers.
E-commerce in India
India, the second most populated country in the world is also the country with the second largest number of internet users. With over 340 million internet users, only 34.4% of the country’s population has access to the internet as compared to 87.9% in the US (Internetlivestats.com, 2017). It is interesting to note that until 2007, only 4% of India’s population had access to the internet. Within a decade, the number of internet users has grown by 900 % (Internetlivestats.com, 2017). The number of internet users in India is expected to double by 2020 (The Economic Times, 2016).
With the increase in internet users, India has witnessed a growth in the e-commerce sector since 2007 and is on an upward trend since then (Nagrale, 2014). By 2034, the Indian e-commerce market is expected to overtake the US by amounting to around $2,039 billion, second only to China (Worldpay.com, 2017). The country has seen an unparalleled growth in every e-commerce sector with a strong focus on apparel and consumer electronics (The Indian Express, 2016). Other sectors that are in their nascent stage of growth are furniture, food and grocery delivery sector.
The role of external funding
In addition to Internet penetration, discounts played a major role in the exponential growth of Indian e-commerce. Discounts as much as 70-90% were offered by the e-retailers to lure the Indian citizens (Mishra, 2015). High discounts were made possible through enormous cash inflow by investors and venture capitalists in a hope to gain a share of one of the world’s fastest growing economy. $9 billion dollars in 2015 and $4 billion dollars in 2016 were invested by hedge-fund companies and investors to pump up the Indian e-commerce market (YourStory.com, 2016).
Major e-commerce players
The Indian e-commerce market differs from that of a country like China because the market concentration in China is largely on account of Alibaba-owned Taobao and Tmall, whereas, in India the market share is divided amongst several ecommerce companies, each coming up with its own business model (eCommerce in India Accelerating growth, 2017). As a result, Indian customers have a wide range of products and services to choose from. Thousands of e-commerce stores are active in India but the market is dominated by three major players that managed to secure heavy funding from external sources (Techinasia.com, 2015). The Indian e-commerce giants are: Flipkart, PayTM and Amazon.
Founded in 2007, Flipkart is the 6th biggest start-up in the world, valued at $15 billion. With 83 million registered users and 30 million products, it has managed to capture 45% share of the Indian e-commerce market. Flipkart owns several Indian e-commerce players including Myntra and Jabong which are the most popular e-marketplace for apparels in India.
PayTM is funded by Alibaba which owns 62% stake in the company. Other investors include Japanese conglomerate Softbank and Taiwanese semiconductor maker Meditek. It was launched in 2010 and since then, it has managed to secure funding of billions of dollars with a current valuation of over $7 billion (ETtech.com, 2017).
Amazon.in was launched in India in 2013 and has since then attracted millions of customers. The company’s strong knowledge under the e-commerce domain and best practices from their international experience give them an additional edge. Furthermore, Amazon have been a part of markets where it has seen the e-commerce market evolve and are aware of the challenges and strategies to address issues thereof.
Despite all the growth and investments during the last decade, the issue that is currently faced by the Indian e-commerce industry is that the marketplace is discount-driven (Retail.franchiseindia.com, 2016). More specifically, if the products are available online at the MRP (maximum retail price) then the customer would choose to buy it from a physical store (Punit, 2016). It is an intriguing scenario because even if the products are not at a discount, unlike Brick-and-mortar, the e-commerce stores offer various advantages and convenience such as cash on delivery, 24-hours service, 30 days returns, safe payments gateways, trusted reviews and other aspects such as social media to interact and solve the issues of consumers.
Millennial is an identity given to the generation of people born between the early 1980s and the early 2000s (Live Science, 2013). American global management consulting firm, A.T. Kearney’s report on global millennials states that about 58% of global Millennials live in Asia. With 385+ million millennials, India has the largest domestic millennial population in the world that accounts for 19 percent of the global generational cohort (Southeast-asia.atkearney.com, 2016). These Indian citizens have disposable income and a strong reliant intent connection. The sheer number of India’s 18- to 35-year-olds doubtlessly will hold significant sway over the country’s immediate economic future. Leading global financial services firm, Morgan Stanley reported that millennials in India are growing and are expected to become more than a third of India’s population at 42% by 2025 (Morgan Stanley, 2017).
Another reason for selecting Indian Millennials for this research is that Millennial online shoppers look just beyond bargains (Morgan Stanley, 2017). They look for added advantages such as product reviews, recommendations and convenience. This is in synchronization with one the current issues faced by the Indian e-commerce industry which is driven by discounts.
An analysis of the demographic profile of internet users by multinational professional services firm, PWC further testifies that e-commerce will rise rapidly in India in coming years. Around 75% of Indian internet users are in the age group of 15 to 34 years (eCommerce in India Accelerating growth, 2017). This category shops more than the remaining population. Peer pressure, rising aspirations with career growth, fashion and trends encourage this segment to shop more than any other category and India, therefore, clearly enjoys a demographic dividend that favours the growth of e-commerce.
Research Question and Contributions
E-commerce has been heavily explored by academics and practitioners since the birth of the internet. Brashear et al. (2009) extended their investigation outside the United States by examining the profiles of Internet shoppers of five countries namely Brazil, Bulgaria, New Zealand, England and China. However, Brashear et al. (2009) only looked into one Asian country— China, which is inadequate to generalize the findings to represent the Asian region. In 2015, a research by Lim and Cham extended the previous studies by examining the profiles of Internet shoppers and non-Internet shoppers in three countries– Malaysia, Singapore and Taiwan. Since Asia is formed from a multicultural society, further investigation on the Internet shopper’s profile among other Asian countries is very much needed. Even though the retail market of India is much bigger than any other Asian country (except China), no studies yet have explicitly analyzed the E-commerce market of India and particularly the shopping preferences of Indian millennials in relation to online vs. offline shopping. I think this is an important piece of research because it helps to nuance possibly the single largest question facing the investors and consumers’ today –
“What is stopping the Indian consumers from shopping online?”
What should be the expectations of e-commerce industry based on consumer preferences? Currently, the major Indian e-commerce players are in losses of over millions of dollars because of luring customers through discounts (CatchNews.com, 2015). As the external funding dries up, it will become extremely difficult for the e-commerce companies to figure out how they will run their business sustainably.
The e-commerce market in India is still very nascent and the potential to grow is immense, currently stopped only by the low internet penetration in the country. 65% of the Indian population does not have access to the internet but this would not be an everlasting situation. India’s internet user growth rate is 4x of global rate (ETtech.com, 2016, Mary Meeker’s 2016 internet trends report). Analysts suggest that e-commerce accounts for less than 1 per cent of the country’s $500 billion retail market, which is still mostly cash-driven (The Irish Times, 2014).
The structure of this thesis will reflect figure XX found below. The first section sought to give an overview of the Indian retail market and the share of e-commerce within it. The second section deals with the literature review to understand the work done by practitioners and analysts. Lastly, the opening section highlighted the need and importance of the research question. The third section details the research methodology in significant depth. The fourth and perhaps most significant section deals with the analysis and findings of the study. The fifth section will be comprised of three different elements; the limitations of the research; further research and improvements and the conclusion of the research. Section six and seven offer appendices and bibliography respectively.
The literature related to this paper mainly comes from the e-commerce stream of research. The basic principles of e-commerce are uniform across the globe despite of the differences in ethnicity, culture and demographics. Therefore, it is realistic to assume that the existing literature on e-commerce is suitable for the Indian e-commerce market as well to a certain extent. This section extends on from the vital context provided in section one.
This section will outline the factors that are commonly cited as impactful in the e-commerce industry. This section will focus on the impact of the following aspects on e-commerce:
- Website quality
- Hedonic and utilitarian shopping value
The impact of discount
Existing literature (Alford & Biswas, 2002; Lichtenstein, Ridgway, & Netemeyer, 1993) defines price consciousness as the degree to which the consumer focuses exclusively on paying a low price. The availability of abundant price information in the Internet shopping context makes online shoppers more sensitive to price. Recent studies suggest that the price promotions offered in an emerging market should be shallower than those offered in a developed market. Additionally, relatively deep price promotions should occur less frequently in an emerging market, compared to a developed market (Mathur and Sinitsyn, 2013). However, the current scenario in India, an emerging market is completely opposite. Because the e-commerce stores are offering heavy discounts to lure the customers.
Another study shows that the main determinant of success or failure in e-commerce is not just the price, but also the process for delivering products and the quality of the website. If these factors are good, customers accept paying more for the product or service (Rababah, Al-Shboul and Al-Sayyed, 2011).
The impact of website quality
The quality of the website is particularly important because, for e-retailers, it represents the central, or even the only interface with the marketplace (Palmer & Griffith, 1998). Sinioukov (1999) suggested that enabling consumers to search for information easily and making the information readily accessible and visible is the key to creating a successful e-retailing business. Cameron (1999) pointed out
that a number of factors render a website inconvenient from a user’s perspective. In some cases, information may not be accessible because it is not in a logical place, or is buried too deeply within the website. In other cases, information may not be presented in a meaningful format. Finally, needed or desired information may be entirely absent. If customers are stymied and frustrated in their efforts to seek information or consummate transactions, they are less likely to come back (Cameron, 1999).
According to Schaffer (2000), 30% of the consumers who leave a website without purchasing anything do so because they are unable to find their way through the site. Schaffer (2000) argued that a convenient website provides a short response time, facilitates fast completion of a transaction, and minimizes customer effort. Because of the nature of the medium itself, online customers have come to expect fast and efficient processing of their transactions. A website that is logical and convenient to use will also minimize the likelihood that customers make mistakes and will make their shopping experience more satisfying. These outcomes will likely enhance customer e-loyalty.
The impact of Hedonic and utilitarian shopping value Comfort in Brick and Mortar
Research supports the notion that shopping can provide both hedonic and utilitarian value (e.g., Babin et al., 1994; Babin and Darden, 1995). Hedonic shopping value reflects the value received from the multisensory, fantasy and emotive aspects of the shopping experience, while utilitarian shopping value reflects the acquisition of products and/or information in an efficient manner and can be viewed as reflecting a more task oriented, cognitive, and non-emotional outcome of shopping (Babin et al., 1994; Holbrook and Hirschman, 1982). Shoppers are not only motivated by the potential purchase of product, but also by the satisfaction that can be gained from the shopping experience (Tauber, 1972). In fact, marketers today tend to consider shopping to be a multisensory ‘experience’ rather than a simple acquisition task (Foster and McLelland, 2015). As such consumers are expected to derive certain value (or benefits) from both the utility- and experiential-based aspects of the shopping trip (Babin et al., 1994). Not surprisingly, the consideration of utilitarian and hedonic shopping value has been a common approach in the retailing literature (Babin et al., 1994; Ballantine, 2010). In line with this common convention, both utilitarian and hedonic value are examined herein and discussed separately below. Utilitarian shopping value is task-oriented and non-emotional in nature (Babin et al., 1994; Hirschman and Holbrook, 1982; Jones et al., 2006). It pertains to task-related benefits obtained through shopping, and can be derived from particular design cues (Baker et al., 2002), positive perceptions of service quality (Bitner, 1990), and certain physical cues (Bitner, 1992; Borghini et al., 2009) that support the accomplishment of shopping task. However, not all shopping behavior is “directed toward satisfying some functional, physical, or economic need” (Babin et al., 1994, 653). In recognition of this, hedonic value reflects the affective benefits gained from positive feelings experienced through the shopping trip. It can be derived during planned shopping behavior as well as impulsive shopping behaviors (Arnold and Reynolds, 2003), where shopping can serve as psychological therapy (Babin et al., 1994). In a sense, it represents the
emotional value gained through the shopping experience itself. Although both types of shopping value are important, the consideration of hedonic value is especially relevant for modern retailing, as retailers seek to create unique shopping experiences by adding elements of entertainment and interactivity to their store environments (Foster and McLelland, 2015). Therefore, this study will consider the impact of consumer comfort on both utilitarian and hedonic shopping value.
The impact of Choice
Compared with a brick-and-mortar retailer, an e-retailer generally is able to offer a wider range of product categories and a greater variety of products within any given category. An offline store in a mall is constrained by the cost and availability of floor space, whereas an online store does not have such limitations. Nowadays, it is common for e-retailers to form alliances with other virtual suppliers to provide customers with greater choice. The highlight is that even though the e-retailer may not have the product in his possession, the experience of the consumer will not be affected by the involvement of the third party who possess the product. The customer will have access to the entire range on one website. Many consumers do not want to deal with multiple vendors when shopping. Bergen, Dutta, & Shugan (1996) noted that consumer search costs associated with shopping across retailers increase with the number of competing alternatives. In contrast, an increase in the number of available alternatives at a single e-retailer can greatly reduce the opportunity costs of time and the real costs of inconvenience and search expended in virtual store hopping. The e-retailer that offers greater choice can emerge as the dominant, top-of-mind destination for one-stop shopping, thereby engendering e-loyalty.
The impact of Trust
Trust is an important factor in developing long-term online B2C relationships (Eastlick et al., 2006). Furthermore, Yoon (2002) claimed that trust influences online purchase intention. Turban et al. (2006) argued that a secure IT infrastructure is important in decreasing perceived risk and increasing consumer trust in the context of e-commerce. Belanger et al. (2002) suggested that the ability to handle online transactions and conduct ecommerce professionally may enhance consumer belief in e-vendor ability. This research argues that advances in information technology have enabled online shopping websites to provide instantaneous explanations and online assistance, which can improve consumer trust. Further, McKnight et al. (2002) argued that “structural assurance” can help develop consumer trust. Structure assurance refers to proactive legal or technological structures that ensure the safety and security of online transactions.
The impact of Delivery
Delivery refers to the total time spent in shipping and handling the product to the customer. Schaupp and Belanger (2005) pointed out that reliable and timely product delivery is essential to consumer satisfaction. They further argued that online shopping websites should not only minimize delivery time but also provide parcel tracking mechanisms to reduce consumer anxiety.
Saunders et all relates Research philosophy to the development of knowledge in a particular field. The development of new knowledge is further explained as a relatively modest ambition of answering a specific problem in a particular organisation, if not a ground-breaking knowledge.
This research aims to the development of knowledge in the field of retail shopping preferences of millennials in an emerging market. The specific problem that has been focussed in this study is the reluctance of Indian millennials to shop online.
Saunders et al emphasise that no research strategy is inherently superior or inferior to any other. Consequently, what is most important is not the label that is attached to a particular strategy, but whether it will enable to answer a particular research question(s) and meet the objectives.
For this research, I have used surveys as the strategy to collect data and understand the preferences of Indian Millennials shoppers. Survey research involves the collection of data from a sample of respondents drawn from a well-defined population. This strategy was used for this research because of multiple reasons. First, the anonymity of the surveys allows the respondents to answer with candid and honest answers. Secondly, in addition to easy comparison because of standardised data, using surveys allowed the collection of a large amount of data from a sizeable population in a highly economical manner. Lastly, surveys allow easy replication of the research and provides the flexibility to collect the data. The flexibility allows the researcher to collect the data from any part of the world. The data collected for this research will be analysed using descriptive and inferential statistics.
Defining and Selecting Shopping categories
For this research, the shopping categories were narrowed down to the three shopping categories: Apparels, Footwear and Accessories and Electronics. The rationale was that comparing Brick-and-mortar with online made more sense if the most popular categories on e-commerce stores are compared with the offline stores.
According to Saunders, Lewis & Thornhill (2012) one of the pressing issues a researcher must address is over what time horizon the research will be conducted. In this regard, there is two predominant categorisations i.e. cross sectional and longitudinal. Cross sectional is described as a ‘snapshot’ taken at a particular time. Conversely, longitudinal research is likened to a series of snapshots (Saunders, Lewis & Thornhill, 2012). Many cross-sectional studies utilize the survey strategy, as is the case with this research. In reality, due to the time constrained nature of the research longitudinal research was rendered impossible, this will be discussed further in the limitations and further research sections.
Data Collection – procedure
This research uses snowball sampling technique to collect data from Indian millennials aged 18-40. The survey was shared on Facebook and the participants accessed it through online research platform, Qualtrics. The respondents are Indian millennials who are mature enough to shop for themselves and have some sort of purchasing power. Moreover, millennials have a good grasp over both, online and offline shopping. These are the people who have witnessed and experienced the growth of online shopping in India since 2007 onwards.
For e-commerce to grow and sustain in India, it is imperative to understand the preferences of the millennials as to what is stopping them from shopping online. Although they are accustomed to shopping offline since their birth, it is not impossible to change their behavior. As per studies, millennials are flexible and are open to new technological innovations as opposed to older citizens.
The sample of respondents has a total of 117 Indian citizens. Out of 117, 100 respondents have completed the entire questionnaire. The remaining 17 filled the survey partially. Considering the 100 respondents who filled the questionnaire completely, 54% are males and 46% are females. The average age of the sample is aa with a minimum of bb years and the maximum of cc years. Hence, all the respondents can be categorized as Indian millennials. 55% of the respondents mentioned that they are working, 29% identified themselves as students and 9% stated that they are looking for a job. Additionally, 83% of respondents stated that they possess a debit/credit card in their name which signifies that they have some sort of purchasing power.
The questionnaire was designed in a conversational approach to understand the shopping preferences of Indian millennials. It was divided into ee sections to get a detailed understanding of the shoppers. On the first screen of the survey, the respondents were informed that the survey does not includes grocery and daily needs purchases as shopping.
The first section asked the respondents to classify themselves under a category of shopper based on the time they spent and the category that excites them the most. It also asked them about their preferences about their company when they like to go shopping.
The second section asked the respondents to give a score to the different aspects of online and offline shopping on a scale of 0-100. This was done to get a close look at the different aspects that may have an impact on the shopping preferences of Indian consumers.
The third section was narrowed down to one of the biggest challenges faced by the Indian e-commerce industry: discounts. In this section, the respondents were asked whether they would shop online if they are not offered a discount. They were also asked the % of discount that they expect at online stores. The same questions were asked for the offline category to see if there is any change in the pattern and the extent to which it differs from the online category.
The fourth section provided the respondents with a case that involved shopping a pair of jeans. They were asked to choose between an offline and online store to buy the pair of jeans and the reasons for choosing the option. The details of the question were in synchronization with the current scenario of the Indian e-commerce industry and the research question.
Finally, the last section asked the respondents to give some details about their current situation and demographics.
The survey ended with a question that asked to respondents to point out the single most reason that would makes/make them switch from offline to online shopping.
Types of questions
Surveys give the freedom to ask different types of questions. This research used both open and closed questions to collect data. For the most part, the survey involved closed questions such as multiple choice, ranking and rating scale. Closed questions represent a convenient way of collecting the data and are comparatively easier to analyse (Wolcott, 1994). The open questions that were asked to the respondents of this research were mostly related to the closed questions they answered.
The central focus of this study is to understand the shopping preferences of Indian millennials to identify the reasons that are stopping them from shopping online. In the first two sections, the background of Indian retail and the impact of various aspects on online shopping were outlined. The third section detailed the methodological choices used to collect primary data. This section will provide comprehensive description, analysis and discussion of the data set. The first component will detail the demographic characteristics and shopping elements of the respondents. The second component will explain in detail about the preferences of Indian millennials in terms of their shopping behaviour.
This segment will profile the participants based on their demographic factors such as age, gender, and employment status. Secondly, this section will segment the participants based on the type of shopper they are with respect to time and spending. Additionally, & Lastly, the customer perceptions of these requirements will be discussed.
The 100 participants were broken down under gender distribution as follows: 46 were females and the remaining 54 were males. This translates to 46% representation of females and 54% representation of males in the sample population. The gender distribution is summarised in Table XX. Although, studying the impact of gender is not the intention of this research, it was done to get an equal mix of both the genders to get a better understanding of the Indian millennials.
The sample that originally consisted of 141 participants had to be reduced to 100 for the gender distribution section. The 41 participants who were ineligible did not complete the entire form possibly due to some technical glitch or length of the survey.
Age Profile of the Sample
The questionnaire was targeted to Indian millennials. This category includes any Indian citizen between the age of 18-40. The average age of the sample overall was quite low at XX years of age. The female cohort had an average age of XX years, while the males had a XX years average age. There was a standard deviation of XX years within the sample. The vast majority of the sample 70.2% was between the ages of 20-30. The second highest representation was between 30-40 with 17.4%. The 40-50 and 50+ age bucket accounted for 12.4% cumulatively. Table 4.2.2 gives a summary of the age profile of the sample. The age profile of the respondents will be discussed in further detail in the limitations section of the paper.
Types of shoppers
The first section of the survey was designed to understand the types of shoppers who are answering the survey. To classify them under a category, questions related to their shopping behavior in general were asked.
A majority of the respondents stated that they go shopping only when it is necessary. The breakdown for the sample population is: out of 117 respondents, 63% stated that they purchase something only when it is necessary, 21% agreed to buying something every month and 12% agreed to buying something every week. Only 4% stated they end up buying something every day.
Millennials are often bombarded with advertisements offline and online every day, especially online because they are always connected through many applications and networks. The statistics mentioned in table no XX signifies that Indian shoppers does not indulge in impulse buying behavior and buy things only when they need something.
|Only when necessary||74||63.25%|
Time spent while shopping
A similar relationship was seen when the respondents were asked about the time they spend when they go shopping. 50% of the respondents stated that they spend only a moderate amount of time. Another 16% mentioned that spend a little amount of time while shopping. On the contrary, 18% of the respondents stated they spend a lot of time and8% stated they spend a great deal of time while shopping. 10% of the respondents stated that they do not remember the time spent while shopping.
|A great deal||8||6.84%|
Another question was asked to understand the shopping category that excites the Indians millennials the most. The options that were given are Apparels, Shoes & Accessories, Electronics and All the categories equally. The answers do not give a clear understanding of the most popular category because of approximately equal weightage to All the categories and Apparels. Singularly, Apparels was stated as the most exciting category followed by Electronics and Shoes & Accessories respectively.
|Shoes and Accessories||18||15.38%|
|All the categories equally||40||34.19%|
Shopping preference based on company
Shopping in India is considered a social affair amongst the millennials. 52% of the respondents stated they prefer to go shopping with friends and family. 18% stated that they prefer shopping alone while 27% stated that they don’t mind going either.
It was interesting to witness that 75% of the respondents stated they go shopping on the weekends. To a certain extent, it can be deduced that Indian millennials consider shopping as something that should be done only on the weekends. This goes against the concept of online shopping which can be done at any time of the week without having a plan for shopping.
Online vs. Offline
51% of the respondents stated that they prefer offline shopping over online shopping while 20% of the respondents stated that they prefer online shopping over offline. 33% stated that they prefer both equally.
Case – buying a pair of jeans
In the fourth section of the survey, the respondents were asked to select an answer based on a case of buying a pair of jeans. The case was designed keeping in mind the current scenario of the Indian e-commerce industry and its competition, brick-and-mortar. The question was:
“A pair of jeans is available for 1050 Indian rupees on an Indian e-commerce website. Its Maximum retail price is 1200 Indian rupees.
It will be delivered within 3-5 days and the delivery is free.
The same pair of jeans is available for 1100 Indian rupees in a store in your city.
Which option would you prefer to buy the pair of jeans?”
The impact of discount
The respondents were asked to choose between an offline and online store to buy a pair of jeans. The offline store was providing the jeans at a 10% discount whereas the online store was providing the same pair of jeans at a 15% discount and a free delivery. Despite of the fact that the deal was better at the online store in terms of price, 68% of the respondents stated that they would prefer to buy it at an offline store.
This case was particularly interesting because the Indian millennials are not just looking for a lower price but they are expecting a lot more from online stores to choose it over offline stores. However, several respondents also mentioned that the price difference is not much to buy it online. This depicts the current situation of the Indian e-commerce industry where the consumers are asking for a higher discount in the case of an online store.
On the other hand, the respondents were asked in the previous sections about their willingness to shop online or offline if there are no discounts. Only 37% of the respondents agreed to shopping online without a discount whereas 69% of the respondents agreed to shopping offline if no discounts are offered. This clearly signifies the mindset of Indian millennials who crave for discounts at online stores.
Instant gratification: the impact of time and delivery
Respondents declined to prefer buying the pair of jeans at an online store by stating that the delivery takes a period of time and their purchase could be ‘need based’. Other respondents stated that the delivery takes time and they do not want to wait for an ‘unexpected’ period of time to get the product at the benefit of a ‘small’ price difference. This highlights a serious limitation of the Indian e-commerce stores. The consumers will not even consider buying something online in the case of a need based purchase. Moreover, the unexpected time of delivery also plays a role in not choosing online over offline stores.
The perfect fit
Many respondents in favour of offline store to by the pair of jeans highlighted the importance of the ‘perfect fit’ which will be absent in the case of buying it from an online store. They also highlighted a unique aspect on the offline retail stores: free alteration. The Indian brick-and-mortar provides consumers with free alteration so that they can get the fit as per their requirements, this is what the respondents claimed as the perfect fit. The responses sheds light on the unnoticed limitations of the e-commerce stores in India. The shopping decisions made by the Indian consumers are not limited to the best price of quicker delivery, they also expect to get the perfect fit at no extra costs.
The advocates of the online store
The reasons by the remaining 32% of the respondents in favor of buying the pair of jeans at an online store were not surprising in general. They highlighted the benefit of saving time and money by choosing an online store.
The points that were particularly interesting were regarding saving the overhead expenses of travelling to the offline store and the ease of return the products. Even though there was no information about returning the product in the question, respondents in the favor of online shopping assumed that they can return the product easily at an online store. Indian e-commerce stores give an option to return the products within 30 days from the date of delivery/purchase which lures the customers to ignore the fact that the product might not fit very well.
Moreover, not only in terms of higher discount, respondents also thought of the overhead expenses they might have to bear to visit the offline store that can be saved in the case of buying from an online store. Like returning the product, there was no information provided about the overhead expenses in the question.
Limitations, Further Research & Conclusion
The research is subject to some limitations. In a diverse country like India, the preferences of Indian millennials might differ based on their language and the region they live in. Media reports indicates that less than 30% of the country’s population falls under the category of English speakers (Forbes.com, 2014). This poses a major challenge on the Indian e-commerce industry because currently, all the e-commerce websites in India are in English. This could be the reason that is stopping the Indian millennials from shopping online. It could be noted as the main limitation of this research because the data collected for this study was done through a survey written in English. It might not be appropriate to generalize the preferences of Indian millennials on the basis of a single language.
The aim of this research was to understand the factors that is stopping the Indian millennials from shopping online. The research further can be focused on specific categories of shopping in India to get a closer look. This will assist in understanding the category that shows the maximum potential to grow in the near future and also the one that can take a step back because of the lack of association with the consumers.
Additionally, the next research can be focused on Indian non-millennials to understand if there are any chances of creating a desire among the non-millennial generation of India. If such a market exists, it could prove be a great opportunity to tap into the pockets of the people who are earning well and are willing to pay more to get convenience at their doorsteps.
The scenario of e-commerce in India is evolving gradually and will take a new form in the next few years especially with the penetration of internet at a fast pace. Therefore, a new research can be conducted to witness a change in the shopping preferences of consumers in the next few years.
An interesting next step of this research would be to do a research that involves augmented reality clubbed with online shopping in India. This is because the majority of the sample highlighted the need to try the product before they can make a decision to purchase it. With the advancements in augmented reality, it could be the something that the Indian millennials might prefer over offline shopping.
To conquer the major limitation of this research, the next step could be to study the impact of language as a barrier in the expansion of online shopping in India.
The research shows that Indian millennials expects more than what e-commerce in India is offering at the current phase. The data portrays a sense of dissatisfaction associated with online shopping with the majority of the sample.
The Indian millennials are not impulsive shoppers and are even cautious when it comes to e-commerce because of the associated risks that are absent in case of brick-and-mortar. Additionally, they look for added benefits or a complete package when they buy something. By a complete package, they are not referring to an online store that gives them choice. They are referring to a complete package of the product they intend to purchase. For example, in the case of buying of buying a pair of jeans the respondents were not just looking for the best price and free delivery but also the alteration to get the perfect fit.
It was interesting to find that the Indian millennials have segmented their shopping categories into offline and online stores. For example, they do not hesitate while buying an electronic gadget an online store, however, the same does not apply to apparels and footwear because they want to experience the product’s quality and material. In the case of shopping for apparels which is one of the biggest shopping segment in India, alteration might sound like a small part but it plays an important role in the preferences of Indian millennials to choose a shopping medium so that they can get the perfect fit. In the case of electronic gadgets, the research shows that Indian millennials are inclined to purchase it at an online store because there are negligible chances of uncertainty associated with a branded electronic gadget.
Another finding shows that the Indian millennials use the online stores as a research medium for shopping.
One of the major issues faced by the Indian e-commerce players is the consumer’s desire to get more discounts at online stores. The research clearly shows that the consumers do expect more discount at online stores. Not only more discount as compared to the offline store, they also want a much higher % of discount at an online store. However, that is not the only factor that makes them take a decision. If their purchase is need based, then they might not consider buying it online even if it is available at a lower price.
There was no finding in relation to the website quality of the e-commerce stores in India. It signifies that the Indian millennials do not have any major issues with the user experience at the website portal and it does not makes an impact on their shopping behavior.
Q1 Are you an Indian citizen?
- Yes (1)
- No (2)
Condition: No Is Selected. Skip To: End of Survey.
Q2 Which option best describes you when it comes to shopping?
- I end up buying something every day (1)
- I end up buying something every week (2)
- I end up buying something every month (3)
- I shop only when it is necessary (4)
Q3 Which shopping category excites you the most?
- Apparels (1)
- Shoes and accessories (2)
- Electronics (3)
- All of the above (4)
Q4 Where do you prefer to go shopping? Please rank the options as per your shopping preferences by rearranging them
______ Single brand stores. Example – Levi’s, Nike and Samsung outlets (1)
______ Multi brand outlets. Example – Lifestyle, Westside and Croma outlets (2)
______ E-commerce websites. Example – Myntra, Flipkart and Amazon (3)
______ Unbranded outlets / Street shopping. Example – fashion street in your city (4)
Q5 How much time do you spend when you go shopping?
- A great deal (1)
- A lot (2)
- A moderate amount (3)
- A little (4)
- I don’t remember (5)
Q6 Which option describes you in a better way?
- I prefer shopping alone (1)
- I prefer shopping with friends & family (2)
- I don’t mind going either (3)
- Other (4) ____________________
Q7 When are you most likely to go shopping?
- Weekdays (1)
- Weekends (2)
Q8 Which option do you find more appealing based on your shopping experience?
- Online shopping (1)
- Offline shopping (2)
- Both equally (3)
- None of them (4)
Q9 Based on the option you selected, why do you find it more appealing?
Q10 When it comes to shopping online, how would you rate the following aspects based on your experience?
______ Price (1)
______ Customer service (2)
______ Convenience (3)
______ Variety (4)
______ Discounts (5)
______ User experience (6)
______ Delivery time (7)
______ Ease of returning the products (8)
______ Security (9)
Q11 When it comes to shopping offline, how would you rate the following aspects based on your experience?
______ Price (1)
______ Customer service (2)
______ Ambience (3)
______ Convenience (4)
______ Variety (5)
______ Discounts (6)
______ Ease of returning the products (7)
Q12 Do you expect a discount at online stores?
______ Discount at online stores (1)
Q13 On online stores, what percentage of discount on the Maximum retail price makes you happy?
- 50% and above (1)
- 30-50% (2)
- 15-30% (3)
- At least 10% (4)
- I don’t care about getting a discount on online stores (5)
Q14 Are you willing to shop online if there are no discounts?
- Yes (1)
- Yes, if (2) ____________________
- No (3)
Q15 Do you expect a discount at offline stores?
______ Discount at offline stores (1)
Q16 On offine stores, what percentage of discount on the Maximum retail price makes you happy?
- 50% and above (1)
- 30-5-% (2)
- 15-30% (3)
- At least 10% (4)
- I don’t care about getting a discount on offline stores (5)
Q17 Are you willing to shop offline if there are no discounts?
- Yes (1)
- Yes, if (2) ____________________
- No (3)
Q18 A pair of jeans is available for 1050 Indian rupees on an Indian e-commerce website. Its Maximum retail price is 1200 Indian rupees. It will be delivered within 3-5 days and the delivery is free.The same pair of jeans is available for 1100 Indian rupees in a store in your city. Which option would you prefer to buy the pair of jeans?
- Online store – 1050 Indian rupees (1)
- Offline store – 1100 Indian rupees (2)
Q19 Why did you choose to buy it offline/online?
You are close to the end of this survey.
- Years (1) ____________________
- Male (1)
- Female (2)
Q22 Relationship Status
- Single (1)
- Married (2)
- In a relationship (3)
- prefer not to answer (4)
Q23 Employment Status
- Looking for a job (1)
- Student (2)
- Working (3)
- Retired (4)
- Not working (5)
- prefer not to answer (6)
- Monthly (1) ____________________
- Prefer not to answer (2)
Q25 Do you have a Debit/Credit card in your name?
- Yes (1)
- No (2)
Q26 This is the last question of this survey.What is the single most factor that makes/will make you switch from offline to online shopping? You can answer it in your own words. Do not worry about typographical errors.
You have answered all the questions. Please click on Next to submit your responses.Once again, thanks for your time.
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