Designing a Model for Improving Online Retailing Performance: A Study of Selective Online Retailers in North India

Abstract

Due to highly interactive nature triggered by internet communication, a number of new opportunities have been created and it has enabled entrepreneurs to conduct business transactions online without meeting in person. This gave birth to a new technology, recognized universally as electronic commerce (e-Commerce). E-commerce and e-marketing are the two important items in the new internet based business domain. Extensive research has been conducted on retailers in offline environment but to help the managers in online environment it is imperative to understand the success factors that will instil confidence among the consumers in emerging economies to adopt online retailing in their daily purchase. But the economic condition of most developing countries is far different from those in developed countries (Upadhyay, 2013). In contrast to developed countries, e-business infrastructure is extremely underdeveloped in emerging countries. Consequently, the models put forward for developed countries need to be validated in developing countries for broader acceptance. Thus, against this backdrop the purpose of this research is to arrive at an inclusive model of online retailing explicitly for emerging economies. The primary purpose of this study is to understand the factors which increase the performance of online retailers. Therefore, the present study integrates all the three dimensions viz., website functionality, drivers of online shopping and perceived risk to have an understanding of their impact on customer satisfaction which in-turn increase the performance of online retailers. The study also attempts to understand dimensions of Supply chain management of online retailers. To meet the above objectives this research analyzes website functionality, perceived risk and drivers of online shopping to evaluate their impact on customer satisfaction in India. The study also empirically validates ease of ordering, cash-on-delivery mode of payment with UTAUT2 (Unified theory of acceptance and use of technology2) as new drivers of online shopping A sample of 500 online shoppers was collected through survey and analyzed using structural equation modelling. Website functionality emerged as a multidimensional construct significantly predicted by security and privacy, navigation characteristics, website design and customization. The important dimension of SCM emerged from the study include Strategic supplier relationship, CRM, Information sharing and delivery dependability. Performance expectancy, effort expectancy, social influence, hedonic motivation, facilitating conditions, COD and ease of ordering emerged drivers of online retailing. The main variables of perceived risk emerged from this study are financial risk, performance risk, social risk, privacy risk and time risk. Results of the study revealed that perceived risk had a negative relation with customer satisfaction where as the website functionality and drivers were positively associated with customer satisfaction. The research will help online retailers to recognize the important success factors that inculcate confidence among the customers in developing economies. The study will also help online retailers to focus in the right direction to eliminate threats and convert non shoppers to online shoppers. The study throws light on a new aspect to research by validating the role of ease of ordering and cash-on-delivery (COD) mode of payment as a construct and new dimensions to UTAUT2.