The Transitional Environment of E-tail vs. Retail : An exploratory study of the factors that trigger channel purchasing decisions within the area of Umeå

Abstract: In the field of consumer goods the ecommerce industry has been growing rapidly. This rapid growth has created significant pressure on traditional retailers forcing them to institute change or risk being removed from the market. The primary objective of this study was to examine the shopping behavior of Umeå inhabitants in the Retail vs. Online Channels of the clothing sector. The goal was to identify key decision factors that cause consumers to choose a specific purchasing channel and use this information to create and test a conceptual model. The model focused on five decision factors including: (1) Loyalty (online, retail), (2) Physical Product, (3) Price, (4) Promotion, and (5) Convenience. We were also were interested in whether IT affinity (level of Internet browsing experience) had a direct relationship to the decision factors. To satisfy our research objective a deductive quantitative method was chosen. Information was tested in the form of a self-completion survey using a sample taken from 113 Umeå, Sweden residents between the ages of 18-29. This age group was specifically chosen, as almost 90% made purchases within a 4-month period (HUI, 2012 p.6). In the final analysis we concluded that all five decision factors in the Online Channel correlated whether positively or negatively, i.e., in some manner affected the final purchasing decision. The decision factors Loyalty Online, Promotion, and Physical Product were the strongest factors influencing the decision to purchase online. Price and IT Affinity correlated with Convenience, which in turn, correlated with Promotion, a decision factor contributing to online purchasing. Physical Product negatively correlated. Regarding the Retail Channel, the Physical Product was the strongest and only significant decision factor correlating positively to retail purchasing. With this understanding we conclude to a certain extent that consumers with a strong desire to try a physical product need other motivational factors to change channels toward online purchasing. Research on a larger scale would provide additional insight in this rapidly growing and interesting market.