Does Demographics Affect Purchase Frequency in Online Retail?

Does Demographics Affect Purchase Frequency in Online Retail?

Prateek Kalia (Department of Research, Innovation and Consultancy, I.K Gujral Punjab Technical University, Kapurthala, India)
Copyright: © 2017 |Pages: 15
DOI: 10.4018/IJOM.2017040103
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Abstract

This research determines whether association exist between the demographic characteristics of online shoppers, such as education, age, gender, monthly income, occupation, marital status and their online purchase frequency. Web survey has been applied to 308 customers of four most popular e-retailers in India, who have made at least one online purchase in past six months. Based on extensive literature review hypotheses have been developed for six demographic factors i.e. education, age, income, occupation, marital status and gender. A chi-square test has been deployed to check association between demographic factors and purchase frequency. Significant association has been found between two demographic variables i.e. gender, occupation and purchase frequency. Further, a chi-square post hoc test via standard residual method confirmed that purchase frequency of 1-3 times in past six months by student customers contributes significantly to significant omnibus chi-square statistic.
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Introduction

E-commerce is skyrocketing with every passing year. One of the most promising segment of e-commerce is retail. In 2014, retail e-commerce sales increased more than 20 percent worldwide to reach $840 billion mark. This impressive growth can be attributed to fact that online retailers are continuously expanding themselves to new geographies and physical retailers are entering new markets (Ben-Shabat, Moriarty, Nilforoushan, & Yuen, 2015). In terms of digital retail sales, Asia-Pacific region is growing at more than 10 percentage points faster than the worldwide average rate. Since this study has been conducted in India it is worth mentioning that growth in Asia-Pacific region will be driven by China, India and Indonesia with the latter two markets clocking growth at 129.5% and 65.6%, respectively, in 2015 (eMarketer, 2015; Kalia et al., 2016). Because of booming e-commerce market in India, competition is getting fierce (Kalia, 2016b) to an extent that that e-retailers in India are adapting their business model to survive (Kalia, 2015). However, there is dearth of studies which examine the profiles of Asian e-shoppers (Kau, Tang, & Ghose, 2003). To gain advantage of this tremendous opportunity, businesses should identify customer’s shopping motivations (van der Heijden et al., 2003).

In traditional marketing, demographic variables have often been studied for segmentation of consumer population and for developing better marketing strategies. Many researchers have highlighted how demographic factors can influence customers’ preference of online store visit (Phang, Kankanhalli, Ramakrishnan, & Raman, 2010), consumer's online buying behavior (Li, Kuo, & Rusell, 1999), differentiation of web-shoppers and non-shoppers (Karayanni, 2003) and evaluation of the e-service quality (Barrera, García, & Moreno, 2014). In a scenario where marketers are investing a large amount of their resources to understand online buying behavior of their customers, demographic variables can easily be accessed as compared to decrypting perceptual surveys which require considerable time and effort from researchers and customers (Phang et al., 2010).

The objective of this research was to ascertain whether the demographic characteristics of online shoppers, such as education, age, gender, monthly income, profession and marital status really moderate their online purchase frequency. Customers of four most popular e-retailers from three major capital cities (identified as e-commerce hub) in India have been considered in this study to identify association between demographic variables and purchase frequency. Hypotheses have been developed and tested on the basis of extensive literature review, which are discussed in next section.

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