Page 1 of 8 ANZMAC 2009 Exploring on-line shoppers preferences for Australian and foreign sourced apparel. Marion Steel and Sheau Hor Ho, RMIT University, marion.steel@rmit.edu.au Abstract This paper investigates Australians perception about online shopping with specific regard to Country of origin (COO) effects. Drawing on research on consumer perceptions of shopping online and the possible influence of COO effects, this pilot qualitative study investigates the experiences of consumers who have bought apparel and accessories online. This research finds key differences between experienced online shoppers and recent adopters. Experienced users perceived foreign sources as providing more options with lower prices. Recent adopters of online shopping were more likely to be influenced by the product source. However, all users considered a number of factors when purchasing via the Internet, namely quality, delivery, security and privacy. More specifically quality is perceived to be associated with country of origin. Key Words: attitude, decision, experience, perception, risk
ANZMAC 2009 Page 2 of 8 Exploring on-line shoppers preferences for Australian and foreign sourced apparel. Introduction Internet usage in Australia is now over 74% (ITU 2009) with over 41% of users purchasing online with an average spend of A$1900 in the last twelve months (Australian Internet Statistics 2008; ITU 2009). However most of those purchases have been airline seats or entertainment tickets. Approximately 36% of Australian internet users have researched or purchased clothing, shoes or accessories online (Nielsen Trends in Online Shopping, 2008), but as a market Australian online consumers lag behind Asian countries such as Korea and the USA and Europe (ITU, 2009). It has been suggested that these types of purchases are still considered high risk either due to the sensory and interactive nature of the purchase (Dholakia, 1999) or due to perceived risks associated with the country of origin (COO) (Patterson and Tai, 1991). This paper explores the attitudes of Australian online shopping consumers with regard to risks and country of origin effects and suggests reasons for the slower rate of adoption for online shopping by Australian consumers compared to other countries. Online Shopping Background Online shopping is the process by which consumers purchase products or services over the Internet. It combines technology and traditional retail to create a form of virtual store (Mohd, Suki and Ramayah, 2008). The online shopping process has three key components; interactivity, transaction and fulfilment (Chen and Chang 2003). These components cover the utilitarian (problem solving) and hedonic (enjoyment) motivations as suggested by previous researchers (Haubl and Trifts 2000; Childers et al 2001; Monsuwe et al 2004). Online shopping offers a different level of convenience compared with bricks and mortar shopping, introducing customer choice into when to shop (time factor), avoidance of crowds, and ease of comparison shopping (Lorek, 2003; Magee, 2003; Maloy, 2003; Retail Merchandiser, 2003; Rowley and Okelberry, 2000, cited in Xu and Paulins, 2005). These convenience factors are associated with the purchasing process (Joines et al. 2003) and contribute to the utilitarian benefits such as how and when to shop. However, the hedonistic aspects and perceived risk of shopping for apparel are not as easily addressed in the online environment. Thus the question of what cues consumers will use to lower perceived risk associated with purchasing apparel online is raised. Clothes shopping has been described as an opportunity for self-expression, self-indulgence and recreation (Dholakia, 1999), with brand familiarity acting to reduce perceived risk, provide an indicator of quality and positively influence purchase intention (Park and Stoel 2005). Elements that have been found to encourage consumers to purchase apparel products online include web page design, ease of navigation and the availability of security guarantees and clearly stated return policies (Siddiqui et al., 2003, cited in Xu and Paulins, 2005). Further, previous positive experiences with purchasing tickets or low risk items has been found to contribute to a willingness to trial online shopping for clothes and accessories (Pastore 2000, Chen and Chang 2003). It has also been argued that exposure to information such as advertising prior to the online search increases brand familiarity (Park and Stoel 2005) while searching for information about product 1
Page 3 of 8 ANZMAC 2009 details and care has been suggested as a predictor of purchase intention (Shim et al 2001 Ha and Stoel, 2004). More recent research suggests that there is no impact of information on purchase intention (Park and Stoel 2005). Thus online consumers use cues in addition to brand in their decision making. In the absence of brand or online shopping experience it has been suggested that the country of origin may be used as an information cue. Country of Origin Effects Australians are supportive of Australian-made clothing, and have an optimistic view of the quality of Australian products for the future and findings showed that Australians perceive major differences in product attributes, depending on COO (Patterson and Tai 1991). Apparel from China and other South East Asian countries is considered inferior in all product attributes including quality to clothing made in Australia, UK or New Zealand, but less expensive (Patterson and Tai, 1991, Phau and Yip 2008) and product quality is related to the country of origin (Phau and Yip 2008). Much of the focus in past research has been on consumer behaviour and the functional and utilitarian dimensions of Internet shopping (Monsuwe et al, 2004; Chen and Chang, 2003, Mohd Suki and Ramayah, 2008). However there are few that have looked at COO effect on apparel purchasing behaviour over the Internet, and even fewer that have considered why certain geographic groups demonstrate lower adoption rates compared to other countries (Patterson and Tai, 1991 Piron, 2000 and Phau andyip, 2008). In Australia, younger age groups, unmarried consumers and migrants are less inclined to be influenced by the cue Made in Australia (Patterson and Tai, 1991). Therefore, how much influence COO has on products and services evaluation during online shopping experiences (Al-Sulaiti and Baker 1998) still requires further research especially in the area of online shopping for apparel. Research Method This research explores the attitudes of Australian consumers to online shopping specifically when buying clothing, apparel and accessories with regard to COO effects. To investigate the research question, in-depth interviews were used. This approach was selected as there was a need to understand the perceptions of respondents, and enable the researcher to see the topic from the perspective of those involved (Gillham, 2000). Interviews are an important method of data collection to obtain information about how and why things happen (Yin, 2003). Interviews are recommended where the subject matter is complex and the possible answers need to be viewed in context of the respondents experiences (McCracken,1988). The researchers recruited nine participants who had prior experience using the internet, and prior experience purchasing online. Respondents were recruited using snowball techniques across both genders and different generational age groups to avoid a segment bias. The data was analysed using thematic analysis and pattern matching (Silverman, 2001; Yin 2003). Findings 2
ANZMAC 2009 Page 4 of 8 Analysis produced three key themes, consistent across all participants summarised in Table 1. The three themes were a positive perception of Australian made apparel, a neutral to negative perception of apparel from overseas sources which arose from a combination of quality, delivery, security and price, and finally the convenience of online shopping which made it a preferred channel. Table 1 - Perceptions of Online Shopping: Australian versus Foreign Key themes Aggregate Findings 1. Perception on Positive Perception Australia-made products are good quality, without "Australian- made" problems. apparels "Australian- made apparel are considered good quality, fine". I prefer to get Australian made because of the fact (of the type of) chemicals that are used in other countries So I m a bit fussy about things like that. For that reason, I ll try and get Australian made, and preferably fabrics that have 2. Online- Purchasing experience 3. Perception of COO and foreign brands online been made here Respondent 8 Good - "Shopping online is convenient, satisfactory, reliable and easy with instructions given." Respondent 2 I think just the convenience to see what s available quickly. 24-hour access, you can look at it midnight, doesn t matter does it. Respondent 4 The most critical factors are quality, delivery security and price "It may depend on where I was ordering them from or from what kind of companies, there are companies I have never heard of before, I might worry about ordering something, whether they are genuine or not." Respondent 4 I would hesitate, but I would look at products from UK,or Japan Respondent 2 "European, American, Asian, Japan, China- made products are acceptable and likeable, but still depend on reliability." Respondent 3 Included in the utilitarian factors was the availability of standardized pricing in local (Australian) currency. "Prices in Australian currency make purchasing online a lot easier." When asked about perceptions of Australian made products, respondents noted that they had good feelings about Australian made and believed that Australian-made was associated with quality. Overall respondents have very good feelings about Australian-made, citing that they are suitable for the climate and lifestyles in Australia, come in a lot of varieties and are better quality compared to items made in China. This finding is consistent with Patterson and Tai (1991) and O Cass and Lim (2002) where Australians think apparel from China and other South East Asian countries is inferior in quality to that of Australian made. The level of previous online shopping experience related to positive perceptions of the convenience aspect of online shopping. Respondents noted the ease of use and convenience as the two key reasons to use the Internet for buying products and services. These respondents had previous experience buying computers, flowers, movie and theatre tickets, sporting equipment and make-up over the Internet. Purchasing over the Internet was seen to be satisfactory, convenient, and easy to use with clear instructions given consistent with the findings from previous research that past experiences directly influences the likelihood of future purchases (Chen and Chang, 2003; Kim, 2002; Dholakia and Uusitalo, 2002; Joines et al, 2003; and Wachravesringkan and Shim 2003). A further convenience factor was the availability of foreign based websites offering standardized pricing in Australian currency. Respondents perceive that 3
Page 5 of 8 ANZMAC 2009 this would make transactions much easier and they reported that they felt more comfortable with the purchase when they could see the current value in local currency. While all factors such as fashion, delivery, price, brand names, quality and exchange policies are considered when making online purchases from overseas retailers, respondents most frequently referred to quality, delivery, security and prices as the most critical, inline with existing research (Schoenbachler and Gordon, 2002; Ha and Stoel, 2004; Joines et al. 2003). Problems perceived and reported by respondents included identity security, transaction security, product quality and delivery quality. Respondents looked for cues including website security icons, information available on local exchange policies, and overall website presentation to help assess possible risks. Price is the most cited reason to shop online, followed by lack of availability of some clothing brands in Australia but the barriers to making a purchase decision are concerns about authenticity and quality of the product. If you have a particular brand that is not available in Australia, (then) people will buy them (from the web). Respondent 1...We would look for specific brands, like when we were looking for a gift of a Tiffany bracelet for a friend. We went straight to the Tiffany website Respondent 7 I will buy foreign luxury brands like Louis Vuitton, but for other items I will buy only Australian made or Australian designed like Peter Alexander. Respondent 9 The perception of the source of products related to a combination of previous experiences, individual interests and lifestyles, and COO or brand cues. Previous positive experiences contributed to a higher level of confidence with purchasing a product online that was foreign sourced. However, negative experiences or concerns about privacy, security or quality inclined respondents to prefer locally made or sourced clothes and apparel. For me, price, quality of product and trustworthiness of delivery. I only went for, so far, sporting equipment,(rather than clothes) which is why I am very picky in the quality and I don t like delay. Respondent 5. Depends on where I was ordering from...or from what type of companies. If they were a big brand and well known it would be OK. I would worry about ordering something from an unknown company, whether they are genuine or not. Respondent 4. Discussion and directions for future research This aim of this research was to investigate the perceptions of Australian consumers about online shopping with specific regards to country of origin effects. As expected from the literature review, the respondents in this study exhibited similar utilitarian responses for shopping online as other countries, noting that convenience, choice and price were key drivers to consider buying apparel and accessories online. This research has shown that when a product or brand in unavailable in Australia, then online shoppers report a greater likelihood to research and purchase the product online. However, respondents used a range of cues or prior experience when making decisions about whether to 4
ANZMAC 2009 Page 6 of 8 purchase clothing and accessories online. Typically cues such as brand, COO, if a product is locally made or website source were used when quality was unknown. This appeared to be of even greater importance when perceived risks included quality and delivery standards, or lack of brand knowledge. In regard to locally made products, a number of respondents reported perceptions of higher quality, and better manufacture when compared to countries like China. Access to current fashion or higher standards of manufacture were aspects typically mentioned in association with Australian made products. Countries such as Japan, UK and New Zealand were also considered to be of equal status as a source for purchasing clothes and accessories when shopping online. It can be suggested that the use of brands, or consideration of country of origin, are used as cues for quality in the absence of other cues. Respondents with significant prior experience in online shopping reported less propensity to look at country of origin or quality issues. Convenience and price, combined with prior positive experiences contributed to the overall purchase decision set when looking at online choices. Based on this exploratory research, it can be argued that internet users with limited purchasing experience are less likely to purchase online, and for those users the perceived risks outweigh the perceived benefits when considering apparel and accessories. When motivated to purchase a specific type of product or brand, then COO cues, brand cues and website cues acted as possible indicators of quality and security and delivery. Further, experienced users expected that they could assess delivery, quality and security factors for most types of online shopping, and looked for price with an expected quality trade off. This study was exploratory in nature, but the issues surrounding lower adoption of online clothes compared to other Asia Pacific countries centre around quality and security. It has been suggested here that COO and brand cues are used as quality indicators for online shoppers with limited experience. Future research is aimed at determining the extent of these perceptions in the online community and whether they do indeed contribute to the lower than average online apparel shopping in Australia. It is also important to determine if this effect is specific to high interaction products like clothing or extends across to other product categories. Future research in this area is recommended to determine if this is a specific cultural effect. 5
Page 7 of 8 ANZMAC 2009 References Al-Sulaiti, K., Baker, M., 1998. Country of origin effects: a literature review. Marketing Intelligence and Planning, 16, (3), 150-199. Chen, S. and Chang, T., 2003. A descriptive model of online shopping process: some empirical results. International Journal of Service Industry Management, 14, (5), 556-569. Dholakia, R. and Uusitalo, O., 2002. Switching to electronic stores: consumer characteristics and the perception of shopping benefits. International Journal of Retail and Distribution Management, 30, (10), pp.459-469. Dholakia, R., 1999. Going shopping: key determinants of shopping behaviours and motivations. International Journal of Retail and Distribution Management, 27, (4), 154-165. Gillham, B., 2000, Case Study Research Methods, Continuum, London. Goldsmith, R., Goldsmith, E., 2002. Buying apparel over the Internet. Journal of Product and Brand Management, 11, (22), 89-102. Ha, Y., Stoel, L., 2004. Internet apparel shopping behaviours: the influence of general innovativeness. International Journal of Retail Distribution Management, 32, (8),377-385. Information Society Statistical Profiles: Asia and the Pacific (2009). Telecommunication Development Bureau - International Telecommunications Union. http://www.itu.int/itu- D/ict/material/ISSP09-AP_final.pdf. Accessed 8/7/09 Joines, J., Scherer. C.,Scheufele, D., 2003. Exploring motivations for consumer web use and their implications for e-commerce. Journal of Consumer Marketing, 20, (2), 99-108. Kim, E., Kim, Y., 2003. Predicting online purchase intentions for clothing products. European Journal of Marketing, 38, (7), 883-897. Kim, P., 2002. Consumer value: an application to mall and Internet shopping. International Journal of Retail and Distribution Management, 30 (12), 595-602. Lee, S-E., Littrell, M.A., 2005. Global e-tailing: US consumers intention to shop for cultural products on the internet. International Journal of Retail and Distribution Management, 33, (2), 595-602. McCracken, G., 1988. The Long Interview. Sage Publications, California. Mohd Suki, Ramayah, T., 2008. Internet shopping acceptance. Direct Marketing: An International Journal, 2, (2), 97-110. Monsuwe, T., Dellaert, B., Ruyter, K., 2004. What drives consumer to shop online? A literature review. International Journal of Service Industry Management, 15, (1), 102-121. 6
ANZMAC 2009 Page 8 of 8 Nielsen 2008. Trends in online shopping, a global Nielsen consumer report, 2008, Nielsen. Park, C., Kim, Y., 2003. Identifying key factors affecting consumer purchase behaviour in an online shopping context. International Journal of Retail and Distribution Management, 31, (1), 16-29. Park, J., Stoel, L., 2002. Apparel shopping on the internet. Journal of Fashion Marketing, 6, (2), 158-176. Park, J., Stoel, L., 2005, Effect of brand familiarity, experience and information on online apparel purchase. International Journal of Retail and Distribution Management, 33, (2), 148-160. Pastore, M., 2000. Online apparel shopping gaining in popularity. The ClickZ Network, viewed 28 November 2008, < http://www.clickz.com/411371 >. Patterson, P., Tai, S., 1991. Consumer perceptions of COO in the Australian Apparel Industry. Marketing Bulletin, 2, (4), 31-40. Phau, I., Yip, S. L., 2008 Attitudes towards domestic and foreign luxury brand apparel. Journal of Fashion Marketing and Management, 12, (1), 68-89. Piron, F., 2000. Consumers perception of the country-of-origin effect on purchasing intentions of (in)conspicuous products. Journal of Consumer Marketing, 17, (4), 308-321. Silverman, D., 2001. Interpreting Qualitative Data. 2 nd edn. Sage Publication, London. Watchravesringkan, K., Shim, S., 2003. Information search and shopping intentions through Internet for apparel products. Clothing and Textiles Research Journal, 21, (1) 1-7. Wu, S., 2003. The relationship between consumer characteristics and attitude towards online shopping. Marketing Intelligence and Planning, 21, (1), 37-44 Xu, Y., Paulins, V., 2005. College students attitudes towards shopping online for apparel products. Journal of Fashion Marketing and Management, 9, (4), 420-433. Yin, R., K., 2003. Case Study Research. 3 rd edn. Sage Publication, California. 7