Introduction
Over the past few years, online retailing has gained prominence and has grown in a very steady manner. There are retailers who have decided that the best way to go about the fast advancing technology and the changes in consumer buying behavior would be to integrate the traditional offline channels that can also be called the brick and mortar retailing with the modern online channels. In the early stages, the two methods of retailing were treated as separate entities with fingers pointing to one another to have its disadvantages aside from the alleged advantages.
To begin with, online retailing or the online channel has the advantage of availability. According to Melis (2015), increasing the online supply and the capacity of online advertisement and utility increases the availability of the goods in the store (Melis, 2015). It is so easy to obtain a good online from different retails that offer the commodity without having to walk from shop to shop trying to find the commodity. The internet is an available tool and therefore, the goods and services are as available as the internet itself. Availability comes with reduction in the price. It is very costly to keep travelling from one town to the other trying to find the best fit for your expectations. Transportation cost that would be used by online retailers to reach the customers from different walks of life is used to cut the price of the commodity online. Therefore, the availability trickles down to a reduction in the price of a product. When one searches for a product, there are options available to indicate and to describe just exactly what you want. It is therefore very true to say that online channels have an advantage of providing the full details and description about what a customer needs. Therefore, it is easy and time saving for a customer to find information about what he or she needs as quickly as possible without too much information search. In online channels, the quality of a product and a website or a retail shop is measured by the comments and the ratings or the views that the website has. Therefore, it is easy to obtain feedback from a customer who is or is not satisfied with a product. It also comes back to the consumers as an advantage since there is no need to travel all the way back to the retail shops to complain about a commodity. Just by a click, information is passed to the suppliers and remedies proposed immediately. There are other advantages that come as a result of online channels especially to the side of the suppliers. They have a very high financial security and they are free from theft. Money is paid online through online banks such as PayPal or Skrill accounts. Therefore, the only way their money can be at risk is from system hackers, which is a losing battle according to website hosts at present.
In understanding integration, it can be explained according to how deeply it is adopted by a particular retail. Therefore, Integration can be divided into; No integration, Partial integration and Full integration. Full integration makes it very easy and possible for customers to access options of assortments in both channels. This therefore enhances the visualization of the customers in a mental manner and boosts the perceived variety of customers. It gives a clear picture of how to make a combination of a number of independent entities to make an entity that is powerful and consumer friendly. Asymmetric integration which is in other words called partial integration has a very negative effect in perceived variety for relationships that are substitutive. It also reduces the visualization for perceived variety for complementary goods. In comparison to no variety, partial integration increases the way people perceive variety for services that go hand in hand and reduces perceived variety for services that are substitutive. However, partial integration preaches that in as much as the two services can co-exist, one is still superior to the other. No integration does not account for integration and completely assumes that the services exist as independent entities. Full integration means that the two services and entities co-exist and cannot do without each other, meaning that they are of equal benefit to one another and that there is no preference of one over the other (Oliver, Paul& Rudolph, 2015).
Offline channels or the Brick and Mortar method is all about providing security and tangible assurance to the consumers. When a consumer comes to a retail shop to purchase goods and services, he or she has a tangible taste of the commodity he or she is about to purchase. It kills the anxiety and the unrest as to whether the ordered goods and services will reach safely to his or her hands since trust is a difficult thing to give to anyone, especially when it comes to goods with monetary value. Offline channels ensure that quality is provided. Since the consumer has a direct physical touch with the commodity, it is very crucial for a retailer to make sure that the goods that the customers lay hands on are of high quality in order to maintain good will as well as the customer. There is also an added advantage in the pleasure that one drives when he or she shops. For instance, going to a retail shop to buy a dream car is much exciting than ordering it online and waiting for its delivery.
According to Bendoly et al. 2005, Multichannel integration is the degree of interaction that exists between channels with each other. Channel integration can be of two types; online-offline or offline-online channel integration. The two differ with the direction to which knowledge about the other starts. Online-offline integration involves providing information about goods and services on the brick and mortar retails while offline-online channel involves providing information about online services at the brick and Mortar retails. All in all, online-offline integration has provided several advantages including the achievement of competitive advantage in the market through the use of Online Integration (OI). It is as a result of studies that we can say that OI improves synergies and reduces cannibalization by a very large margin (Herhausen, Binder, Schoegel & Herrmann, 2015). It is also true that customers who would buy from un-integrated online retails and not by any chance from physical shops would find themselves buying the same goods and services in integrated Internet stores. By incorporating OI, the retailers would be able to reduce the price and thus competition on the basis of price would be a battle won.
Online-Offline Integration however has several disadvantages. On a platform that is not well secured, dishonest people and thieves find their way into the market and cause harm to the consumers who ordered online. Taking for example OLX, there were claims that at the receiving end or at the brick and mortar end, there were robbers who would make arrangements with the clients and steal from them instead of delivering the goods and services (Genever, 2015). Retailers who have invested deeply on goods for luxury have a very big fear that online retailing would result into flooding and facing off of their brand appeal through exclusivity corrosion. However, there are companies who instead of worrying too much have decided to go the OI way so that they can capture a wide range of customers.
Multichannel free riding is a very common term when it comes to online-offline channel integration. It is a big advantage to the consumers and poses unbearable and uncomfortable disadvantages to the suppliers or to the retailers. To begin with, multichannel free riding is a situation where a consumer obtains information about a commodity that he or she is interested in through an online store and ends up purchasing it at a different supply point, not related to the integrated online store. The advantage to the consumer is that he or she obtains data about the best quality in market and then views the prices and decides to buy it at a physical store which had nothing to do with the advertisement at a cheaper price. A disadvantage goes to the online store since one pays Google or any other search engine a large amount of money to be at the top of the first page during a Google search but ends up making nothing from the hard work. Multichannel free riding also causes competition within the same firm for the same customer since a customer knows little about the online store and the physical store (Binder, 2014)..
Problem Statement
With all the clear fights about the advantages and disadvantages of Online-Offline integration and the quest as to whether to adopt or not adopt this idea, there has been a lot of confusion and the extent to which this idea affects the retail is still a topic up for discussion. Therefore it is the interest of this paper to find out the effects of OI on retail and to what extent online-offline integration has affected the consumers.
Research Objective
I. To determine the effects of online-offline channel integration on retail
II. To study the purchase intention for customers, so as to find out how whether online offline channel integration will be favorable or not to customers.
Methodological Framework
In the process of trying to fulfill an objective, it is always mandatory to carry out research in a systematic manner by the use of tools to collect data, record, analyze and present the data or obtained information. Therefore, a clear research methodology is called for. Research methodology can therefore be described as the process that involves collection of data or information in order to make informed judgments about a situation at stake and ensure that the objective of the study is reached at (BusinessDictionary.com, 2016). There are several tools for data collections that include interviews, surveys and questionnaires. In all these, it is important to determine a sample that is targeted and to plan the research prior so as to ensure its success. Bias should be avoided as much as possible to ensure that the information is as accurate as it can be.
Data collection was done through online questionnaires. The choice of this method of data collection was based on the fact that the method is very fast and is time saving. Compared to traditional questionnaires by pen and paper, it is also providing a very simple platform for the participants, both researches and respondents. It also offers the advantage of quick analysis since data is presented in a very systematic manner. To add on to these advantages, it reduces bias and errors due to illiteracy since only those who have the ability to read and use the internet efficiently can access it(“10 Advantages of Online Surveys | SmartSurvey”, 2016).
Measurement is done through the use of correlation research techniques. It is because the paper is questionnaire based and involves two variables that are in the same group. Therefore, quantitative analysis would be the best method to measure the collected results. According to Capilano University (2016), correlation study is a method of research that is quantitative and involves the determination of the relationship between these variables in a mathematical manner. In correlation studies, data can be collected through questionnaires (“Capilano University”, 2016).Therefore it is logical to say that the research methodology here is a correlation research.
Main research Question
I. How and to what extent has online channel integration affected online purchase intentions for customers?
Minor Research Questions
I. What are the effects of increasing the perceived service quality of the internet on purchase intention for customers in overall retailer and online channel?
II. How does decreasing the perceived risk of the internet channel affect purchase intentions for the overall customer and online channel?
III. What are the effects of online-offline channel integrity on perceived service quality of the internet store?
IV. How does online-offline channel integrity affect perceived risk of the internet store?
V. What are the effects of service quality of an offline channel on the perceived service quality in the online channel?
VI. What are the impacts of customer internet shopping experience on online-offline channel integration on the perceived service quality of the internet store?
VII. What are impacts of customer internet shopping experience on online-offline channel integration on the perceived risk of the internet store?
Hypothesis
I. It is hypothesized that online channel integration has positively affected online purchase intentions for customers (Herhausen, Binder, Schoegel & Herrmann, 2015)
II. It is hypothesized that increasing the perceived service quality of the internet channel positively affects purchase intention for customer in overall retailer and online channel (Herhausen, Binder, Schoegel & Herrmann, 2015)
III. It is hypothesized that decreasing the perceived risk of the internet channel positively affects purchase intention for customer in overall retailer and online channel (Herhausen, Binder, Schoegel & Herrmann, 2015)
IV. It is hypothesized that Online-Offline channel integration increases perceived service quality of the internet store (Herhausen, Binder, Schoegel & Herrmann, 2015)
V. It is hypothesized that Online-Offline channel integration decreases perceived risk of the internet store (Herhausen, Binder, Schoegel & Herrmann, 2015)
VI. It is hypothesized that service quality of an offline channel has a positive impact on the perceived service quality of the online channel (Yang, Lu & Chau, 2013).
VII. It is hypothesized that consumer’s internet shopping experience decreases the positive effect of online-offline channel integration on perceived service quality of the internet store (Herhausen, Binder, Schoegel & Herrmann, 2015)
VIII. It is hypothesized that consumer’s internet shopping experience decreases the negative effect of online-offline channel integration on perceived risk of the internet store (Herhausen, Binder, Schoegel & Herrmann, 2015)
Dependent Variables
The dependent variables in the hypotheses are as follows. The first hypothesis has it that the dependent variable is online purchase intentions of customers since it depends on and is affected by online channel integration. In the second hypothesis, the dependent variable is purchase intention for customer in overall retailer and online channel since the variable is affected by the perceived service quality of the internet channel. In the third hypothesis, purchase intention for customer in overall retailer and online channel is the dependent variable and it depends and is affected by perceived risk of the internet channel. Perceived service quality of the internet store is the dependent variable in the fourth hypothesis and is dependent on Online-Offline channel integration to cause a change. In the fifth hypothesis, perceived risk of the internet store is affected by Online-Offline channel integration. Therefore, perceived risk of the internet store is the dependent variable. The sixth hypothesis holds it that perceived service quality of the online channel is the dependent variable since it is affected by quality of an offline channel. In the seventh hypothesis, the dependent variable is perceived service quality of the internet store and it depends on online-offline channel integration for change in paradigm. Consumer’s internet shopping experience is the mediator variable and comes in between the dependent and the independent variable. Finally in the eighth hypothesis, the dependent variable is perceived risk of the internet store and it depends on online-offline channel integration for change in paradigm. Consumer’s internet shopping experience is the mediator variable and comes in between the dependent and the independent variable
Independent Variables
The independent variables in the hypotheses are as follows. In the first hypothesis, online channel integration is the independent variable and is depended upon by the purchase intentions of customers. In the second hypothesis, the independent variable is perceived service quality of the internet channel since it affects the purchase intention for customer in overall retailer and online. In the third hypothesis, perceived risk of the internet channel is the independent variable and is depended upon by the purchase intention for customer in overall retailer and online channel. Online-Offline channel integration is the independent variable and is responsible for a change in perceived service quality of the internet store in the fourth hypothesis. In the fifth hypothesis, Online-Offline channel integration is the independent variable since it directly affects perceived risk of the internet store. The sixth hypothesis holds it that the quality of an offline channel is the independent variable and is depended upon by the perceived service quality of the online channel for a shift in paradigm. In the seventh and the eighth hypotheses, online-offline channel integration is the independent variable and is depended upon by the perceived risk of the internet store and the perceived quality of the internet store for a shift in paradigm measures.
Assumptions and Limitations
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Research Design
Data Collection
The collection of data is a very hectic task and is so time and money consuming if not properly planned for. However, there are softwares that have come up to help with survey especially online survey. The paper obtains its data through questionnaires that are posted online for people to respond. The advantages have so far been discussed and in this section, what is of interest is to understand the data collection tool that is the Survey monkey. The survey monkey is a software that provides quick online survey by creating, distributing and analyzing obtained data to present a business with the best understanding of the parameters under investigation. It provides a very simple platform for designing the survey or the questionnaire. It also provides the respondents with a very easy platform for responding to the set questionnaires (“Survey Monkey Review 2016 | Best Survey Software”, 2016). Therefore, in the collection of data, the tool selected for this particular project is the Survey Monkey.
However much the tool is very efficient and well reputable, bias is an attribute that is common to all surveys especially with questionnaires involved. Wrong wording of questions results into answers that are not intended by the researcher. Therefore understanding the wording problems and being as accurate and precise as needed is important in eliminating such kind of bias. There is bias that occurs due to the type of questionnaire and the design. The type of questionnaire can be open or closed ended with designs such as bar graph markings among others. To avoid misinterpretation of these signs, it is very important for a researcher to make sure that the type and the design of the questionnaire is as simple to the respondent as possible. Another cause of bias is the structure of the survey. It means in other words that the questions are structured in a manner that is not flowing or a manner that does not grab the respondent. Therefore to avoid bias, the questions should be as well structured as possible and in the best flow possible (Team, Team, Team & Team, 2013).
Data Analysis
The IBM SPSS is a software that is very efficient in the measurement and analysis of data that has been collected. It has the ability to analyze variables separately and to compare multiple variables. The software is used to make text analysis, to deploy data and correlation. The statistic methods and types that are included in the software include descriptive, bivariate, and prediction for numerical and indefinite variables. Descriptive statistics involves methods such as cross tabulations while bivariate statistics involves t-tests and ANOVA. The data that is obtained is made up of dependent and independent variables (Berg, 2016). Therefore, correlation research is very essential for the analysis of the data. Data can also be analyzed in a manner that does not require softwares for example categorizing data into groups such as dependent and independent variables. It makes sorting out the data easy and very fast to access. Unitizing of data which involves deciding to arrange data according to standard units also help sort data in a very systematic manner and provide ease of access.
Testing
The ANOVA statistical tool is very important in testing of variables. An example is the SPSS repeated measures ANOVA that uses guidelines to test whether three or more variables that are metric are equal in a given population. Another example is the SPSS one way ANOVA that involves measuring metric variables in three or more equal populations. Where two or more metric variables are linear in a given population, the SPSS correlation test is used to determine the relationship that exists between them (Berg, 2016).
Additional Assumptions
a. The assumptions include that the sample must be less than the population itself.
b. That the sample represents the population under target
c. The size of the sample is greater than 30 or in mathematical terms, N>30 (Berg, 2016)
References
10 Advantages of Online Surveys | SmartSurvey. (2016). Smartsurvey.co.uk. Retrieved 14 March 2016, from https://www.smartsurvey.co.uk/articles/10-advantages-of-online-surveys
Berg, R. (2016). SPSS Tutorials | SPSS Repeated Measures ANOVA. Spss-tutorials.com. Retrieved 14 March 2016, from http://www.spss-tutorials.com/spss-repeated-measures-anova/
Capilano University. (2016). Capilano University. Retrieved 14 March 2016, from https://www.capilanou.ca/psychology/student-resources/research-guidelines/Correlational-Research-Guidelines/
Genever, S. (2015). Fraud Victim Issues A Serious Warning, Public Urged To Share. Crime Daily. Retrieved 14 March 2016, from http://www.crimedaily.co.za/fraud-victim-issues-a-serious-warning-public-urged-to-share/
Herhausen, D., Binder, J., Schoegel, M., & Herrmann, A. (2015). Integrating Bricks with Clicks: Retailer-Level and Channel-Level Outcomes of Online–Offline Channel Integration. Journal Of Retailing, 91(2), 309-325. http://dx.doi.org/10.1016/j.jretai.2014.12.009
Jochen David Binder, (2014) Online Channel Integration: Value Creation and Customer Reactions in Online and Physical Stores; Dissertation of the University of St. Gallen, School of Management, Economics, Law, Social Sciences and International Affairs to obtain the title of Doctor of Philosophy in Management, ISBN 978-3-658-04572-2 ; ; DOI 10.1007/978-3-658-04573-9
K Melis, (2015), The impact of the multi-channel retail mix on online store choice: Does online
experience matter? Retrieved from; https://lirias.kuleuven.be/bitstream/123456789/472387/1/2014-12-04+-+Manuscript_.pdf on 15th, March, 2016.
Oliver Emrich, Michael Paul & Thomas Rudolph Shopping benefits of Multichannel Assortment Integration and the moderating role of retailer type.Journal of Retailing 91(2, 2015) 326-342https://www.wiwi.uni-augsburg.de/…/EmrichPaulRudolph_JR_2015—M…
SurveyMonkey Review 2016 | Best Survey Software. (2016). TopTenREVIEWS. Retrieved 14 March 2016, from http://survey-software-review.toptenreviews.com/surveymonkey-review.html
Team, F., Team, F., Team, F., & Team, F. (2013). Avoiding Survey Bias – FluidSurveys. FluidSurveys. Retrieved 14 March 2016, from http://fluidsurveys.com/university/avoiding-survey-bias/
What is research methodology? definition and meaning. (2016). BusinessDictionary.com. Retrieved 14 March 2016, from http://www.businessdictionary.com/definition/research-methodology.html
Yang, S., Lu, Y., & Chau, P. (2013). Why do consumers adopt online channel? An empirical investigation of two channel extension mechanisms. Decision Support Systems, 54(2), 858-869. http://dx.doi.org/10.1016/j.dss.2012.09.011
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Introduction
Over the past few years, online retailing has gained prominence and has grown in a very steady
manner. There are retailers who have decided that the best way to go about the fast advancing
technology and the changes in consumer buying behavior would be to
integrate
the traditional
offline channels that can also be called the brick and mortar retailing with the modern online
channels.
In the early stages, the two methods of retailing were treated as separate entities with
fingers pointing to one another to h
ave its disadvantages aside from the
alleged
advantages.
To begin with, online retailing or the online channel has the advantage of availability.
According
to Me
lis
(2015)
, increasi
ng the online supply and the capacity of online adver
tisement and utility
increases the availability of the goods in the
store (Me
lis, 2
015)
.
It is so easy to obtain a good
online from different retails that offer the commodity without having to walk f
rom shop to shop
trying to find the commodity. The internet is an available tool and therefore, the goods and
services are as available as the internet itself. Availability comes with reduction in the price. It is
very costly to keep travelling from one to
wn to the other trying to find the best fit for your
expectations. Transportation cost that would be used by online retailers to reach the customers
from different walks of life is used to cut the price of the commodity online. Therefore, the
availability
trickles down to a reduction in the price of a
product
.
When one searches for a
product
, there are options available to indicate and to describe just exactly what you want. It is
therefore very true to say that online channels have an advantage of providin
g the full details and
description about what a customer needs. Therefore, it is easy and time saving for a customer to
find information about what he or she needs as quickly as possible without too much information
search.
In online channels, the quality
of a product and a website or a retail shop is measured by
the comments and the ratings or the views that the web
site has. Therefore, it is
easy to obtain
