The impact of online buying to Customer Behavior Changes.

Empirical study from Albania

Genti ELA, PhD Candidate

Tirana University
Economic Faculty
Management Department
PhD Mentor: Prof. Dr. Suzana Panariti
Address: Rruga e Dibres, Kompleksi Halili
genticela@hotmail.com
Mobile: +355 69 60 39923

Abstract
During the last decade, the Internet has taken over many business processes and changed the
dynamics of numerous markets. The retail industry is a market that is experiencing a growth rate
of sellings through the use of web pages. The retail companies are implementing application for
different kind of computers and PDA devices, in order to facilitate the interactive communication
with consumers. At the same time, the shifting from traditional to online buying has its influence
on customer behavior. Through this paper we strive to describe the stage of online buying in the
case of the Albania, in order to evaluate the situation of development of online buying and its
impacts on consumer behavior.
The paper is based on the recent literature of customer behavior and an analysis of a consumer
survey. The paper is divided in two parts. The first one will treat theoretical issues related with
Customer Behavior both in traditional and online buying based on the latest studies for customer
behavior by well known professors and their research in this field. In the second part we will
present the empirical studies that have been qualitative and quantitative research, with a
questioner where more than 480 consumers have participated. The main objective of the
questionnaire was to acquire information from the customers about the status and the trends of
the online buying and the factors that indicate the customer behavior.

Keywords: Online Buying/Shopping, Consumer behavior, e-commerce, Consumer decision

making.

Introduction
The commercialization of the internet in early 1990 and introduction of world wide web in
1993, provided a great opportunity for retailers to expand the markets by finding consumers out
of shop. In digital economies, developed and developing countries are driven by information
technologies. Along with the development of the internet and the speed of internet connection,
the retail companies rearranged their way of selling and communication with customers.
Nowadays retailing is considered a high-tech, global, growth industry that plays a vital economic
role in society increasingly using communications and information systems technologies and
analytical models to increase operating efficiencies and improve customer service. (1) Now they
are using web pages to promote products and services. Retailers are investing a huge part of their
marketing budget to create applications for all devices that have access to internet. By doing this,
they are always in touch with their loyal customers and prospected ones, giving them the
possibilities to see photos of products, detailed information and purchase the products, etc.
Nevertheless, the customers have changed their behavior from the traditional mode of buying
that involves selling of goods to the final customer on a physical building that can be a store or a
market.

Based on this transformation of customer behavior the retail companies are changing their
marketing strategy. Recent researches have indicated that, the online shopping, particularly in
business to consumer (B2C) has risen and internet shopping has become more popular to many
people.

Objectives
E-commerce is being used by many companies as an approach to present their images, their
products and through the use of web selling, in order to win competitive advantages in the
market. Through this research paper I will analyze the impact of online buying on consumer
behavior and how it differs from the traditional ones.
The purpose of the research paper was to show:
- Actual status of online shopping;
- The impact of online shopping factors that influence online customer behaviors;
- Actual online customer behavior through analyzes of data collected from survey;
The main contribution of this research paper will be to different Albanian companies who are
interested in e-commerce implementation. The paper will enable them to obtain a grasp of the
factors that are influencing changes in customer behavior. It also will help them to create their
marketing and sales strategy.

Literature Review
The buying process is the steps where the consumers go through to buy a product or service. It
starts when customers recognize an unsatisfied need. After that the customer search for
information about how to satisfy this need, what kind of retailers, channels, and products or
services might satisfy his/her need. After evaluate retailer alternatives and choose the store or
Internet site to visit, their products or services and respective offers the customer make his or her
buying decision.
Nowadays, in a global and digital economy the customers have a lot of possibilities to find the
easiest way to fulfill their needs by using all types of retail channels. A retail channel is the way
a retailer sells and delivers merchandise and services to its customers. The most common
channel used by retailers is a store. Retailers also use a variety of non store channels including
the Internet, catalogs and direct mail, direct selling, television home shopping, and automated
retailing. The vast majority of sales are made through the store channel, but the catalog and
Internet channels also account for significant sales. (2) Multichannel retailing is the merging of
retail operations in such a manner that enables the transacting of a customer via many connected
channels.
Channels include: retail stores, online stores, mobile stores, mobile app stores, telephone sales
and any other method of transacting with a customer. Transacting includes browsing, buying,
returning as well as pre and post sale service. (3)
But how do customers make buying decisions? How they decide what type of retailer to choose,
what channel to use, and what product or service to buy? What factors affect customer buying
decisions?

Consumer buyer behavior refers to the buying behavior of final consumers - individuals and
households that buy goods and services for personal consumption. (4) Another "official" definition
of consumer behavior is "The study of individuals, groups, or organizations and the processes
they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy
needs and the impacts that these processes have on the consumer and society."
As consumers we make many buying decisions every day without thinking that this decision is
the most important marketers effort. All companies do detailed researches on consumer buying
decisions to find the answers of questions about what, where, how, when and why the customers
buy. But learning about the whys of consumer buying behavior is not so easy - the answers are
often locked deep within the consumers mind. (5)
Abraham Maslow hierarchy of needs theory sets out to explain what motivated individuals in life
to achieve. He set out his answer in a form of a hierarchy. He suggests individuals aim to meet
basic psychological needs of hunger and thirst.
When this has been met they then move up to the next stage of the hierarchy, safety needs, where
the priority is with job security and knowing that you have a regular income. Social needs come
in the next level of the hierarchy, the need to belong or be loved is a natural human desire and
people strive for this belonging. Esteem need is the need for status and recognition within
society, status sometimes drives people, the need to have a good job title and be recognized or
the need to wear branded clothes as a symbol of status.
Self - actualization the realization that an individual has reached their potential in life. The point
of self-actualization is down to the individual, when you know you have reached your point of
self-fulfillment.(6)
Based on Maslows theory of human motivation there are many researches figuring out that there
are external and inter factors influencing consumer purchase. The first one comes from
environmental conditions and the second comes from customers mind. The external influences
are divided into five elements: Demographics, socio-economics, technology and public policy;
culture; subculture; reference groups; and marketing.(7) The internal influences are variety of
psychological processes, which include attitudes, learning, perception, motivation, self image,
and semiotics. (8) In addition to these factors consumers have also two other types of motives
when they do shopping, which are functional and nonfunctional.
The functional motives are mostly about the time, shopping place and consumers needs, which
could be like one-stop shopping to save time, the environmental of shopping place such as free
parking place, lower cost of products and available to choose from widely range of products.
The non-functional motives are more related with culture or social values, such as the brand
name of the store.(9)

The Buying Decision Process

Now that we have a full overview for the factors that affect buyers, we are ready to look at how
consumers make purchasing decisions. As we mentioned the buyer decision process consists of
the stages: need recognition, information search, and evaluations of alternatives, purchase
decision, and post purchase behavior. This means that buying process is a long one starting
before the product or service buying and continues long after this process with post purchase
behavior.
Thats why retailers have to study the entire buying process rather than the purchase decision as
a separate process. Generally consumers move through all five stages during purchase, even
though in a routine one, they often skip some of these stages. This happen both in traditional and
online purchase. They share many similarities.
The traditional purchase process is simple. Customer s purchases their needs in a physical place
where that have the possibilities to see and try/taste the product or service. The customer buying
behavior at this case is influenced by the sellers way of advertising and promotion to attract
buyers to buy their merchandise.
The same think happen during the online buying. Consumers get information through retail web
pages or social media advertising for needed products or services. But compared with traditional
sales there are some differences between them. So:
- pre-purchase inspection of products or services;
- prompt access to goods bought;
- easy exchange and return;
- During an internet purchase the customer fill comfort to look for the product, to spend
more time at the product catalog, comparing prices and models, even though he/she cant
touch or try the product or service;
- There is no waiting line for customers on the internet;
- Ability for an interactive service, product information;
- And other post-purchase service.

Internet Channel
Internet retailing, also called online retailing, electronic retailing, and e-tailing, is a retail
channel in which the offering of products and services for sale is communicated to customers
over the Internet. Everyone would be doing their shopping over the Internet. Stores would close
due to lack of traffic, and paper catalogs would become obsolete. (10)
Facts show that even though sales through the Internet channel are forecasted to grow at about 10
percent annually, more than three times faster than sales through the store or catalog channel,
Internet sales are expected to represent less than 10 percent of retail sales (excluding automotive
and food services) by 2013.
Based on the upcoming comments the Table 1 presents the decision Making process for both
traditional and online buying.

Table 1 - Decision Making Process

Process Traditional Buying Online Buying
Need Recognition - collect information from - advertising online and web
salespersons; site
- interviews with - promotions to attract
customers; customers buy and consume;
Information Search - mainly according to - web information search
their shopping process;
experience - e-mail subscriptions;
- Personal sources:
family, friends,
neighbors
- Commercial sources:
advertising, salespeople,
retailers, dealers,
packaging, point-of-sale
displays;
- Public sources:
newspapers, radio,
television, consumer
organizations, specialist
magazines;
- Experiential sources:
handling, examining,
using the product;
Evaluation of - Product choice on the - compare product and price;
Alternatives outlet; - need to consider the potential
- Search for products in risks such as payment
different retail outlets security;
- cost of delivery;
 - many possibilities of product
choices;
Purchase - Direct payment/buying - required registration
- shipping charge policies;
- information needed to
complete the purchase;
- good knowledge on
purchasing (checkout)
- electronic interactivities;
- payment and return policy;
Post-Purchase - direct customer - The products or service meet
Evaluation satisfaction or the customers requirement
dissatisfaction - product return to online
retailer;
During the evaluation of the buying behavior we have to analyze the external and internal factors
that impact it. The external factors those of demographics, socio-economics, technology and
public policy; culture; subculture; reference groups; and marketing are the same for both types of
buying. On the other site, we have to consider and analyze the internal factor, because these are
directly related with the human behavior. The internal influences are variety of psychological
processes, which include attitudes, learning, perception, motivation, self image, and semiotics.
When we analyze the internal factors during a traditional buying we consider elements like
personal experience, website/Internet search/catalog or leaflets, knowledge, friends or reference
groups, advertising and promotion. Except these elements some other issues are present at an
online buying that the customer has to consider before closing the purchase:
Security - Security is one of the most important concerns for online consumers;
Privacy - clear privacy policy on your website will go a long way to building trust and
confidence;
Value - In order to get consumers to purchase online retailers have to ensure that they
offer loads of value;
Approach - online consumers determines to a great degree how retailers build trust;
Emotion - People buy for emotional reasons and defend their purchases logically;

Methodology
This paper combines literature reviews with data analyses given by questionnaires distributed by
e-mail to 1250 persons. To accomplish the objectives of this research study, I organized two
kinds of surveys. The first one was a simple questionnaire asking random people if they use
internet in their daily life or not. For that the team asked more than 500 people. 59% of the
people asked answered that they are users of internet. The second questionnaire was an online
with 19 questions in Albanian language. The questionnaire was formulated with questions that
gathered information on demography, education, the type of purchase, the clients experience
during the transaction, etc. More than 580 people fulfilled the questioner giving their experience
in online buying.

Results Analysis
The following report presents the findings of online survey. The online questionnaire was sent to
students, friends, employed/unemployed and unknown persons through e-mail. It has some
sections like: questions for general information, questions for internet users interests, gathering
information for online buying, Internet shopping process, etc.

The answers show that almost 62% of respondents are female and 38% are male. (See Table 1)

46% of the answers belong to 26-35 years old group, 24% are from 18 to 25 years old, 24% are
from 36 to 45 years old and the rest up to 46 years old. (See Table 2)

75% of the internet users are full-time employed persons and the rest are students, unemployed
and part time employed persons. (See Table 3)

66% of the internet users access it at home, 24% of them access it at work and the rest access
internet in different providers like Wi-Fi free, internet caf, etc. (See table 4)

91% of the internet users are regular users for more than 4 years and the rest from 1 year to 4
years. (See Table 5)
The answers for question Which is the reason for using internet? were: 81% use internet for
sending/receiving e-mails, 70% use internet for social network communications (facebook,
tweeter, etc), 68% use internet or non particular subjects, 50% of them use internet for product
information, 36% of users use internet for specific subject, etc. In this question the participants
had the possibilities to give more than one answer.

The next section of the questionnaire started with the question if they have experienced at least
one time an online buying. If they use internet for online buying they had the possibilities to
continue the questionnaire otherwise they had to submit it. The surveys show that 58% of
internet users use it for online buying.

Table 7 show the answers for what kind of products do they mostly buy online. In this question
the participants had the possibilities to give more than one answer.

Table 8 shows the reasons why people buy online. 73% of the participants buy online because
they find best prices compared with prices in traditional retail, 58% of them dont find products
that they want in the domestic market, 45% of them buy online because they save time by this
kind of shopping.
Table 9 shows the answers of the question: What kind of web sites do you use for online buying?
37% of the participants use company web site for online buying, 22% of them search for specific
brand, 14% search products based on products price and the rest buy product at outlet websites
or random ones.

The participants are also asked to answer Which features do you value when visiting an e-
commerce website?. 60% of them were interested for product information, 56% are answered
for security that the web site offers, 48% rank brand identity and 46% rank transport costs as
their priority.

The following answers are part of the last section of the questionnaire. These question show how
the online buyers behave when they have to do payments, how secure do they feel how much
they know the buying and paying rules and the level of customer loyalty.

97% of the participants answered Yes the question Do you use internet for finding
information before buying the products? But only 79% of the participants compare the product
prices before purchasing online.

Table 11 shows that 62% of the customers do not need help during online buying, 25% of them
need help sometimes on this process, 12% of participants needed help on their first online buying
and only 1% needs help in every online buying.
Table 12 shows that only 3% of the participants subscribe always on the company web sites to
get news and information from the pages where they buy products online, 18% of them answered
often, 70% answered sometime and 9% of the participants answered never.

The result shows that 88% of the participants read the Buying Rules before purchasing a
product but only 82% of them feel secure during online buying. The most useful way of payment
is by Credit Card with 47%. Another way of online buying payment is through third parts
Paypal, Worldpay, etc with 29%. The rest of them use debit card, bank transfer or other ways of
payment.

The last finding of survey is that consumers can chose to buy a product in a physical store even if
they find a product cheaper in internet. So, only 32% of the participants answered No when
they were asked: Will you choose the purchases "in store" even if you find the product cheaper
online?. The difference answered Yes or May Be.

Conclusion and Recommendations

Since the Internet and World Wide Web (WWW) have been spread rapidly all over the word the
growth of E-commerce has also experienced a significant development. Due to the applications
on their web pages the businesses have another important channel to present, promote and sale
their products or services to fit the customers needs. This study is mainly focus and examines
the factors that affect the consumers online buying behaviors.
Through this research paper I present a short background of retail industry and e-commerce
development, the customer behavior on traditional buying and online one and the factors that
mostly influence customer purchasing behavior.
The main finding is that Online buying behavior is substantially different from the buying
behavior in a traditional store-retail. Online buying behavior is more dynamic and provides
consumers with different types of products and services.
The survey organized for that research found that half of the Albanian internet users have used it
at least one time for online buying. Different people buy for different reasons and most of them
(82% of the participants) feel secure during online buying.
Following Im listing the main finding of the survey:
- 81% of the internet users use it for receiving and sending e-mail
- 70% of the internet users use it for social network communications;
- 68% of the internet users use it for product or specific topics research;
- 97% of the internet users use it for getting information before a purchase;
These findings are important reasons for Albanian retailers to focus on interacting with
customers through internet and to find all the ways how to connect with them. This becomes
even more important when you see at the survey that only 3% of respondents subscribe always
on the company web pages and 70% of them are answered sometimes. This means that Clients
or visitors of websites are rarely loyal to a specific website when searching for a particular
product or service.
Another interesting finding is that consumers believe that the quality of the product on online
buying is better than this one in traditional store. 73% of the participants believe that the price of
the products is cheaper in online buying. 45% of the participants believe that they save time
during online buying and 26% of them like this kind of shopping. For Albanian retailers these
findings will help them to focus on getting possibilities to make their web sites available for
online sales. They have to negotiate with the banks because until now no banks offer this kind of
service for domestic retailers.
(1) Michael. L, Barton A. W. Retail Management 8th edition. New York: McGraw-
Hill/Irwin; 2012.
(2) Michael. L, Barton A. W. The World of Retailing. Retail Management 8th edition. New
York: McGraw-Hill/Irwin; 2012: SECTION 1.
(3) Webster Dictionary
(4) Kotler. P, Armstrong. G. Consumer Markets and Consumer Buyer Behavior. Principles
of marketing- 14th ed. New Jersey: Pearson Education, Inc; 2012: Chapter 5 page 133.
(5) Kotler. P, Armstrong. G. Model of Consumer Behavior. Principles of marketing- 14th ed.
New Jersey: Pearson Education, Inc; 2012: 134-135.
(6) Maslow A. H. A theory of human motivation. Psychological Review, 1943: 50(4), 370-
396
(7) Kotler. P, Armstrong. G. Characteristics Affecting Consumer Behavior. Principles of
marketing- 14th ed. New Jersey: Pearson Education, Inc; 2012: 135-137.
(8) Kotler. P, Armstrong. G. Characteristics Affecting Consumer Behavior. Principles of
marketing- 14th ed. New Jersey: Pearson Education, Inc; 2012: 138-150.
(9) Sheth, J.N. An integrative theory of patronage preference and behavior. University of
Illinois: 1983.
(10) Michael. L, Barton A. W. The World of Retailing. Retail Management 8th edition.
New York: McGraw-Hill/Irwin; 2012: SECTION 1 page 58
(11) You can find the online survey following this link:
https://docs.google.com/forms/d/1uLreMHkJ12XK1b6575hDkUHxP9N-
5smh74eDDgwxj7o/viewform?sid=8c0acf67f45ddd3&token=75WpBz0BAAA.Sm1YuX
_I1O4Sg7h6T4sLYA.bWkTvhTW64iHNmlj3xtApA