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INTRODUCTION

Background of the Study

As Filipinos entered the 21st century, there are a lot of changes that are being

introduced and also there are new ways to earn income like online selling. In today's

generation, social media has greatly influenced people and business persons regarding

online transactions commonly in online selling. It became a new way not only for people

who do not have time going to market place to buy products but it also gives opportunity

to business owners to make profit. Since many Filipino consumers shop online, there are

also many online businesses that are increasing rapidly. Many businesspersons also

engaged in online selling while selling offline and usually most of them advertise their

products by using social media to increase their profit.

Offline selling is defined as the marketing activities that does that not involve the

internet and is used to publicize a brand and reach out to wider audience. There are

advantages of offline selling, one is it brings trust in customers as it shows that the owner

of the business is financially stable enough to have a store (Angel Investor Report, 2018).

Customers prefer to see and feel products before purchasing or spending money on them.

According to Gupta (2015), many customers go for purchasing offline so as to examine

the product and hold possession just after the payment for the product. In this

contemporary world, customer’s loyalty depends upon the consistent ability to deliver

quality, value and satisfaction. Another advantage is that you can reach out to your target
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audience in a specific region. You can meet and communicate to your customers in order

to have a good relationship with them and influence their buying behavior towards your

product. However, offline businesses are challenged by the cost involvement due to the

infrastructure facilities and human resources. It not just requires money but requires

continuous supervision. Any commercial space would cost a lot among with the salaries

of the staff involved (Angel Investor Report, 2018). In addition, the market for offline

businesses is usually limited. Since online businesses access wider range of customers,

offline businesses are only limited to the customers in their location.

Online-to-offline marketing is a business model that draws potential customers

from online channels to make purchases in physical stores (Hayes, 2019). The main

advantage of businesses doing both online and offline is that it can reach customers not

only in local but also in national level (Basu, 2018). Having both offline and online

selling as an approach to the customers can lead to a great strategy to generate customers.

For instance, a consumer saw a product in an online website, that potential customer will

do information search on the product through the web and if decided, the customer can go

to the physical store to see and test the product. Likewise, if a customer passes by a store,

that customer can search for more information to have extensive knowledge on the

product, analyzed and get satisfied with the information gathered, the customer can go

back to the store and purchase the certain product. On the other hand, the disadvantage of

both online and offline selling is that it does not allow face-to-face interaction where

customers do not physically touch and see the products that they want (Hayes, 2019). So
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when they claim it in offline store of the business, and they do not like the quality or the

product has damage, customers are likely to return it. In addition, Basu (2019) said that

since online businesses have wider reach of customers, they must also compete with

potentially thousands of other online businesses offering similar products.

Entirely replacing a physical market with an online strategy, for instance opening

only a web shop instead of both of a physical store and a web shop, does not lead to

better results for the firm (Sinkovics et al., 2013). This conclusion confirms the study

done by Jean (2007) that only implementing online approach does not add to a firm’s

competitive advantage. Hence, it is suggested that a firm should not only rely on the

internet as a sales channel, but they should include offline method to their sales channel.

On the other hand, with the existence of the offline and online approaches in which

companies can sell their products and promote their brands, they need to carefully

consider how they will devote their resources in both fields, meaning, finding the right

harmony between online and offline resource allocation (Anderson et al, 2017).

A study conducted by Dharmappa (2018) shows that online selling is effective in

integrated marketing communication strategy of the organization by increasing the brand

awareness, improves customer satisfaction, easy integration and management, and

facilitates automation of marketing activities. This implies that engaging in online selling

helps the business entity to introduce their goods more effectively. However, it only

stated that it has an increase on product awareness but have not stated whether online

selling has an impact to their profit.


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A statistical report done by Statista (2018) said that the Philippine online selling

market revenue grew to $840 million or about P44 trillion in 2018 from $688 million or

about P36 trillion in 2017. Revenue is expected to grow about 10.5% annually leading to

a market volume of $996 million dollars or about P53 trillion pesos by 2019. This shows

a positive effect that online selling helped online businesses increase their profitability

because Philippines has the greatest number of internet users in Southeast Asia. However,

the participants of that statistical report are the companies such as Lazada, Shopee,

Zalora, and other more. This does not include small business entities because stall owners

in local places do not engaged in such online selling activities. They use social media,

usually Facebook, in doing online selling.

Although there are studies conducted relevant to the topic, there are still

shortcomings that needS to be filled . First, the researchers will still conduct a study

because they found that in the study of Dharmappa in 2018, it only shows that online

selling increased the product awareness but does not tell much about its effect on the

profitability of the business. Second, In the statistics of the Philippine online selling

market revenue, it dwelled on the big companies, they did not include the small owners

of business stalls that are not popular to the people. Lastly, there is no study conducted in

Baguio City.

Significance of the Study

The results of the study benefited the researchers as a preparation for their chosen
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tracks. They have an idea on how effective an online selling is and they can consider

better ways of selling methods or marketing strategies in the future. For those students

particularly in the business courses, they can gain insight on marketing methods that is

better to use when they establish their businesses in the future. The teachers, especially

those in the field of business, benefited from the findings of this study for they gained

knowledge on what marketing method is better to teach their students for them to acquire

necessary skills. And the students can be taught with better and upgraded versions

regarding the advantage and disadvantage of online selling and also on what marketing

methods is better to use. Business owners of clothing lines can also gain insights in

planning their business especially which selling method is better to use and further

improve the allocation of their resources. In this case, it raises the success rate of the

business when they know the right marketing strategy use. New and incoming business

owners can also utilize the findings to help them improve their business. It also served as

a basis in encouraging them on not only the way of offline selling but also in

implementing better online transactions to raise product awareness and profitability. This

also served as a related literature and a guide for the future researchers that are going to

conduct a research relevant to this study.

Statements of the Problem and Hypothesis

This study aimed to know the effectiveness of online selling to offline sellers of

clothing lines in Baguio City. Specifically, to answer the following questions:


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1. What is the average monthly income of the offline clothing line sellers before and

while doing online selling?

2. Is there a significant difference on the average monthly income of the offline

clothing line sellers before and while doing online selling?

Null Hypothesis (Ho): There is no significant difference on the average monthly

income of the offline clothing line sellers before and after doing online selling.

Scope and Delimitations of the study

The study dwelt on the average monthly income of the offline clothing line

sellers, who also engage in online selling, located at the central business district of

Baguio City. Hence, there was a comparison on the average monthly income before and

after doing online selling.

On the other hand, it does not include the businesses that are not located at the

central business district of Baguio City, businesses that only do offline selling, businesses

that only do online selling and the stores that sell other products other than clothing.

Conceptual Framework

INPUT PROCESS OUTPUT


Average monthly
S
Conduct a survey
using survey
Analyzed and
interpreted data.
income of the questionnaires.
respondents before Recommendations to
Statistical analysis
and while doing help offline and online
online selling a. Descriptive sellers to increase their
b. Inferential profitability
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METHODOLOGY
Research Design

The study used descriptive-comparative research design since it aimed to describe

the changes on the average monthly income of the offline clothing line sellers before and

after doing online selling. According to Villanueva (2019), descriptive-comparative

research design should be use when the researchers consider two variables (not

manipulated) and established a formal procedure to compare and conclude that one is

better than the other if significant difference exists. In this study, the researchers

compared what marketing strategy- offline selling or both offline and online selling, was

better and more effective to clothing line businesses. Using this research design, the

researchers was able to identify and analyze the data gathered from the respondents.

Specifically, which selling method had a greater effect in their income before and after

selling online.

Sampling Procedure and Locale of the Study

The respondents in this study were the offline clothing line sellers who were also

involved in online selling. Simple random sampling was used by the researchers in the

collection of data since it is a method used to select a smaller sample size from a larger

population and used it to research and make generalizations about the larger group

(Depersio, 2018). In addition, simple random sampling was used because there is no

exact population of the target respondents. All of these respondents were drawn from the

central business district of Baguio City.


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Data Gathering Tool and Collection Procedure

The researchers utilized survey questionnaire to collect data from the respondents.

The survey questionnaire was carefully designed by the researchers since there were no

tools that they can adopt/adapt, and it underwent validation through the three senior high

teachers namely Mrs. Rowena Rojas, Mrs. Angeline Garcia, and Mr. Melvin Alamag

who were experts in the field of business. After that, the non-respondents of the study

served as a medium to test the reliability of the questionnaire. Their responses underwent

Chronbac Alpha with a confidence level of 95% and significance level of 5%. If it is

accepted and found reliable, it will then be administered to the respondents. However, if

it was unaccepted and found not reliable, there should be a revision of the structures and

contents of the questionnaire and should again go through the processes of validity and

reliability tests.

To gather data from the respondents, the researchers asked for their voluntary

participation in the study by giving a letter of permission and explanation of the purpose

of the study and the respondents had a right to withdraw if they feel uncomfortable. Only

those who acknowledged and were willing to be respondents were given a survey

questionnaire to answer. The anonymity was guaranteed when they participated in the

study to protect their identity. Also, the data gathered from the participants was assured to

remain confidential and should be use for this research only. The researchers personally

administered the research instruments for further clarifications in case the respondents

formulate further questions. Answers of the respondents went through analysis to produce
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accurate results.

Data Analysis

The data that gathered was analyzed quantitatively. The mean of the responses

from the respondents was used to determine the answers to the descriptive question in

item number 1. For the inferential question on the significant difference regarding the

average monthly income of the offline sellers before and after online selling, Shapiro-

Wilk test was used first to test the normality of the responses. The Shapiro-Wilk test was

utilized if a random sample came from a normal distribution. The null hypothesis of the

test was the data that is normally distributed (De Filippi, 2018). To determine if there was

a significant difference between means of two groups, t-test was used when the data is

normal (Kim, 2015). However, if the distribution resulted as skewed, Mann Whitney U-

test or Kolmogorov Smirnov test was used to test whether two samples were likely to

derive from the same population (Boston University, 2017). To be able to arrive at the

accurate results, the following procedures was performed using Statistical Package for

Social Sciences (SPSS) Tool.


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RESULTS AND DISCUSSION

In this portion of the paper, the succeeding parts contain the outcomes of the data

gathered from the respondents through survey questionnaires. There are also discussions,

corroborations, and implications stated that are integrated with other sources for further

analyzation of the results.

Average Monthly Income of Clothing Line Sellers Before and While doing Online

Selling

Table 1 presents the average monthly income of the offline clothing line sellers

before and while doing online selling.

Table 1. Average monthly income of clothing line sellers in offline selling and in both offline and
online selling
Groups n Mean Description
Offline Selling 50 1.34 Extremely low income

Offline and Online Selling 50 2.02 Very low income

Legend: 1.00 - 1.83 – extremely low income


1.84 – 2.76 – very low income
2.68 – 3. 51 – low income
3.52 – 4.35 – high income
4.36 – 5.19 – very high income
5.20 – 6.00 – extremely high income

The average monthly income of clothing line sellers who are only selling in

offline have extremely low income. While clothing line sellers who are selling in both

offline and online have a higher income compared to the previous one. This means that

doing both offline and online is more suggested than doing solely offline selling.
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This finding was supported by Saha (2018) in her study which states that there is

an impact of online selling to retail stores or also called offline sellers. This is due to

increasing trend for online shopping over the internet that leads to an increase on the rate

of online transactions.

However, because of the highly competitive market in online selling and

continuous growth of this trend, new and more entrants are competing with other online

stores. Thus, old online stores experienced a threat on how to keep their image brand to

the consumers. Then it sometimes leads to close down or tremendous decline in the sales

of the online businesses (Yan, 2018).

Based from the results, online selling, as a market method, is suggested to be

added in the marketing strategies of the firm. Since the same respondents were asked

about their incomes before and now that they do online selling, it can be inferred that

there is a potentiality to increase their profits. Doing so increases the profitability of the

business and leads the store to success.

Test for Significant Difference on the Average Monthly Income of the Offline

Clothing Line Sellers Before and While Doing Online Sellers

Table 2 presents the test for the difference on the average monthly income of

clothing line sellers in offline selling compared to both offline and online selling by the

use of Mann-Whitney U Test.


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Table 2. Test for Differences on the Average Monthly Income of Clothing Online Sellers
on Offline Selling and both Offline and Online Selling
Groups n Mean Std. Dev. Sig.
Offline Selling 50 1.34 0.658073875 .0*

Offline and Online Selling 50 2.02 0.999795898 .0*

Legend * - significant at 5% level of significance


ns – not significant at 5 % level of significance

Based from the table above, there is a significant difference on the average

monthly income of the offline clothing line sellers before and while doing online selling.

In other words, there is a significance on the average monthly income of the respondents

on doing offline only and both offline and online.

According to Boaz (2014), consumers tend to go into stores, evaluate products,

research, and buy products online nowadays. If the business is not covering this trending

method of selling, they are missing out the opportunity to gain in a highly profitable

business. Furthermore, there is a big difference between selling in both offline and online

rather than offline only. The business with an online store have a wider reach to

consumers because internet is everywhere that makes it easier to reach everyone globally

(Domingo, 2017).

Since there is a significant difference on the average monthly income of the

respondents based from the data, the null hypothesis is rejected. Concluding that doing

both online and offline selling is effective and has an impact to the profitability of the

firm rather than selling solely in traditional way or also called as offline selling.
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CONCLUSIONS AND RECOMMENDATIONS

Conclusions

Based on the findings, the researchers formulated the following conclusions:

1. Clothing line businesses have more generated income on both offline and online

selling compared to their incomes when using offline selling only.

2. The engagement of clothing line firms to online selling have an impact to their

profits. Specifically, there is a higher amount of profit gained by those businesses

doing both offline and online selling.

3. Online selling is effective to offline clothing line sellers in the central business

district of Baguio City.

Recommendations

Based on the findings of the study, the researchers strongly recommend the

following:

1. The offline clothing line businesses should also be encouraged to engage in online

selling because this trending marketing method have an impact to the profitability

of the firm which increases generated income.

2. The researchers should use the findings of this study in their careers as future

entrepreneurs. Then apply these concepts to run a more successful business.

3. The marketing subject teachers should teach their students that online selling is a

big help in order to have a more successful firm.


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4. The new entrants to this of should consider this suggested selling strategy to their

business.

5. Sellers of other products other than clothing may take advantage of the benefit of

using online selling as market strategy.