SUMMARY OF THE JOURNAL

Online Grocery Retailing: What Do Consumers Think?

By Kim Ramus and Niels Asger Nielsen

Disusun oleh: ASTRINA SETIYANTI

MAGISTER AKUNTANSI FAKULTAS EKONOMI DAN BISNIS UNIVERSITAS GADJAH MADA YOGYAKARTA 2013

Online Grocery Retailing: What Do Consumers Think?

By Kim Ramus and Niels Asger Nielsen a. Background Purchasing via the internet is one of the most rapidly growing forms of trade (Limayem et al., 2000; Levy andWeitz, 2004; Shim et al., 2001) but whereas e-commerce has gained ground at an impressive speed in the business-to-business area, the share of total consumer spending carried out via internet-based transactions is still modest. Among the companies who have attempted to sell products to consumers via the internet, a significant number run large deficits and several have even had to close down. The difficulties facing internet retailers have been pronounced in connection with the sale of groceries and other products for daily use. In this line of business there has been a number of attempts to establish internet shops, but with no breakthrough success. The most prominent American internet-based supermarket failures are Webvan, Streamline, Homegrocer, Homeruns and Shoplink (Tanskanen et al., 2002). Also in Denmark, supermarkets have closed down their internet-based grocery shops, e.g. ISO, Favr/SuperBest and ISS. One of the common difficulties that internet grocery retailers have encountered is that sales tend to fall short of expectations and it is, therefore, relevant to look at the consumer and the reasons for her or him to either use or not use the internet for grocery shopping. A variety of studies have attempted to profile internet shoppers, mainly with regard to demographic and, to a lesser extent, psychographic criteria. Donthu and Garcia (1999) found that internet shoppers are older and make more money than non-internet shoppers. They are also more innovative, impulsive, convenience seeking and less risk averse. Bellman et al. (1999) characterize internet shoppers regarding their internet habits based on number of daily mails, months online and other mainly behavioral aspects of internet use. Jayawardhena (2004) found links between personal value dimensions, attitude towards e-shopping and aspects of online behavior. Weber and Roehl (1999) have profiled people shopping for travel products on the internet. George (2004) using theory of planned behavior (TPB) in a survey of general online purchasing behavior and found, that respondents that have little concern about privacy and trustworthiness of the internet and believe in their own abilities regarding internet purchasing are more likely to use the internet for purchasing. Morganosky and Cude (2000) were the first to look specifically at the reasons for consumers to shop online in the grocery area showed that convenience and time saved were the primary reasons for shopping online. An important limitation of this study is that it only focused on users of online grocery shopping. This paper is a more systematic attempt to investigate what factors explain consumers willingness to buy groceries on the internet than has hitherto been presented in the literature.

b. Theoretical approach One of the most widely used social psychology theories about the way in which perceptions influence actions is Ajzens TPB (Ajzen, 1985, 1988), which is an extension of the previously widely used Theory of Reasoned Action (Fishbein and Ajzen, 1975). The intention to perform an action is caused by three constructs: attitude towards the action, subjective norm, and perceived behavioral control. Attitude towards the action is the valence of the action for the potential actor, i.e. whether and to which extent the action is regarded as positive or negative. Attitude is in turn determined by outcome beliefs, i.e. a persons beliefs about the expected outcome of a given behavior. Subjective norm refers to how the potential actor believes relevant others will react to performing the action, i.e. positively or negatively. Subjective norm is determined by normative beliefs that the individual holds about the behavior expected by relevant referent individuals. Perceived behavioral control refers to a persons ability to perform a given behavior. Perceived behavioral control is expected to have an effect on the formation of intentions, but also on the behavior itself. Beliefs about factors that facilitate or impede the performance of the behavior, control beliefs, are determining perceived behavioral control. In this exploratory study of consumers perceptions about internet grocery shopping, the TPB provides a systematic, comprehensive account of psychological factors with a potential power to explain why people use or abstain from using the internet for shopping groceries. c. The aim of the paper Using the TPB as an underlying framework in a qualitative study to uncover the range of beliefs that are the basis for forming consumers intentions to either use or not use the internet for shopping groceries.

d. Methodology Initially, an exploratory methodology (as opposed to a confirmative methodology) was decided upon in order to uncover beliefs, underlying attitude, subjective norm and perceived behavioral control for online grocery shopping. Given that belief is a cognitive construct, which is unobservable, observation studies were excluded. This left us two main ways of conducting qualitative research, namely focus groups and in-depth interviews.

e. Data collection and analysis Seven focus groups were established in Denmark and England. The choice of these two countries was based on the following considerations: in the investigation of internetutilization in grocery related commerce, it seems sensible to include a country that has progressed a good deal in the development of e-commerce with grocery products along with a country which is less advanced in this respect to be able to study whether this difference in experience level leads to the elicitation of different beliefs. Even though the number of internet connections per capita is among the highest in the world, Denmark is not yet very advanced with regard to internet commerce (Rasmussen, 2000). In contrast, England is the leading country with regard to e-commerce in Europe (White and Daniel, 2004). f. Results For the sake of clarity and flow in this presentation, we have divided this section into three subsections based on the theoretical distinction of three types of beliefs. Based on the focus group discussions, we initially present the salient outcome beliefs among focus group participants in Denmark and England with regard to internet grocery shopping. Outcome beliefs can be benefits, gains, disadvantages or losses that consumers either expect or have experienced in relation to shopping via the internet. Secondly, we outline what could be distilled from the interviews in terms of control beliefs, i.e. the beliefs that consumers hold about their mastering and control of the entire buying process. And finally, we report which types of referent groups that seem to be important among group participants when they form their behavioral intention to buy food on the internet. In other words, we try to reveal the relevant reference groups acting as the source of consumers normative beliefs, i.e. their perceptions of the behavioral expectations of important referents. This study indicates that consumer acceptance of internet grocery shopping could also be severely impeded by widespread beliefs which are probably harder to change than beliefs about the safety of payment systems, because they are rooted in inherent characteristics of internet grocery shopping. This study also shows that a number of consumers believed that grocery shopping on the internet was less fun and exciting than the conventional trip to the supermarket.