Online Shopping vs Offline Shopping : A Comparative Study

Abstract

The retail sector is one of the fastest growing sector in India. It is one of the backbones of the economy and accounts for about 10 percent of the country's GDP. The Indian retail market is estimated to be valued at US$ 600 billion and one of the top five retail markets in the world by economic value. The growth of retail sector in India is one of the fastest globally. Indian consumers are very particular about their products. The consumer choices vary based upon their preference towards online shopping versus offline shopping. The internet and traditional shopping both have their own advantages and disadvantages.Online shopping doesn't require traveling long distances, offers more variety, remains functional 24*7, offers huge discounts and extend the facility of customer reviews. On the other hand, traditional shopping allows customers to physically examining products which otherwise online shopping lacks. Consumers may be use both the online and traditional mode of shopping depending on their preferences at a particular moment, which results in fundamentally different behaviours across the two mode of shopping. This article attempts to throw some light on the differences emerging out of online shopping behaviour and offline shopping behaviour.

Full text

IJSRST16211 | Received: 22 Feb -2017 | Accepted 28 Feb-2017 | January-February-2017 [(3)1: 424-431]
© 2017 IJSRST | Volume 3 | Issue 1 | Print ISSN: 2395-6011 | Online ISSN: 2395-602X
Themed Section: Science and Technology
424
Online Shopping vs Offline Shopping : A Comparative Study
1Raja Sarkar, 2Dr. Sabyasachi Das
1,2Department of Business Administration, Utkal University, Bhubaneswar, Odisha, India
ABSTRACT
The retail sector is one of the fastest growing sector in India. It is one of the backbones of the economy and accounts
for about 10 percent of the country’s GDP. The Indian retail market is estimated to be valued at US$ 600 billion and
one of the top five retail markets in the world by economic value. The growth of retail sector in India is one of the
fastest globally. Indian consumers are very particular about their products. The consumer choices vary based upon
their preference towards online shopping versus offline shopping. The internet and traditional shopping both have
their own advantages and disadvantages.Online shopping doesn’t require traveling long distances, offers more
variety, remains functional 24*7, offers huge discounts and extend the facility of customer reviews. On the other
hand, traditional shopping allows customers to physically examining products which otherwise online shopping
lacks. Consumers may be use both the online and traditional mode of shopping depending on their preferences at a
particular moment, which results in fundamentally different behaviours across the two mode of shopping. This
article attempts to throw some light on the differences emerging out of online shopping behaviour and offline
shopping behaviour.
Keywords : Consumer Buying Behaviour, Online Buying Behaviour, Offline Buying Behaviour, Brick And
Mortar Stores
I. INTRODUCTION
The fundamental issue which arises in front of a
consumer when he/she embarks on buying something is
which mode of shopping they should choose to satisfy
themselves. There are both online and the traditional
brick and mortar shops available to fulfill their purchase
interests. This abundance of choice available for
consumers has thrown up a serious challenge for
companies regarding the way they should target
consumers to maintain competitive advantages.
In the developed countries like the United States, it has
become almost a norm to make purchases on the online
platform specially for apparel products. However, in a
developing country like India, majority of people still
depend on the brick and mortar stores to make purchases
in different categories. Although in the last few years,
online shopping has become quite a craze among the
masses specially among the teenagers and youngsters, in
absolute numbers, offline shopping is still way ahead of
its online counterpart.
In the present day context, learning and analysing
consumer behaviour is extremely vital for the success of
a business, be it online or offline. Consumers drive the
market. All the business activities are carried out
keeping in mind the interests of consumers. Online
shopping, which is a recent phenomenon in the Indian
context has gathered steam in the last few years backed
by increasing penetration of internet has resulted in
consumers spoiled for choice. Internet is helping the
promotion of products through online advertisements.
The healthy competition between the online stores and
the offline brick and mortar counterparts have ushered in
a new era where consumers can pick and choose the
medium of shopping to fulfill their shopping interests.
Some of the key differences between the two medium of
shopping are the means of gathering product
informations, perceived risk and the ability of consumers
to access similar kinds of products according to their
preferences.

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II. METHODS AND MATERIAL
A. Review of literature
Degeratu et al. (2000) show that for some categories the
brand name is more important online than in a
traditional shopping environment, but this might depend
on the available attribute information.
An online channel has distinct characteristics from a
physical channel (Wang et al., 2013). For example, the
absence of the experience of examining the physical
product within an online channel (Alba et al. 1997).
Earlier studies found that the products that consumers
feel they need to touch or try on are products that require
a presence or at least purchase within an offline channel
(Chiang and Dholskia, 2003; Lynch et al., 2001).
Lenvin et al. (2003) found that being able to personally
encounter a product prior to purchase is an underlying
factor of the preference for an offline shopping method
for products such as clothing. However, textile and
clothing have found the biggest acceptance in online
retail and no branch of the industry is affected by the
internet as retail sales have (Heinemann and Schwarzl,
2010).
An online channel has distinct characteristics from a
physical channel (Wang et al., 2013). For example, the
absence of the experience of examining the physical
product within an online channel (Alba et al. 1997).
According to Chayapa (2011), the process of making
decision are very similar whether the consumer is offline
or online but some major differences are shopping
environment and marketing communication.
Smith and Brynjolfsson (2001) use data from an online
shopbot to study the behavior of online book consumers.
They find that brand has an effect on the consumers’
willingness to pay.
Online search isn’t completely free; several papers have
estimated positive but modest costs. Bajari and
Hortaçsu (2003), for example, find the implied price of
entering an eBay auction to be $3.20. Brynjolfsson,
Dick, and Smith (2010) estimate that the maximum cost
of viewing additional pages of search results on a books
shopbot is $6.45. Hong and Shum (2006) estimate the
median consumer search cost for textbooks to be less
than $3.00. Nevertheless, while positive, these costs are
less for most consumers than the value of the time it
would take them to travel to just one offline seller.
Dong-Mo Koo, Ji-Hoon Lee (2011) proposed an inter-
relationship among dominance, energetic and tense
arousal, pleasure and their impact on intention. Results
from the from a survey of 406 consumers (217 from
offline store customers and 189 online store users)
demonstrated that dominance had a significant positive
and/or negative effect on both energetic and tense
arousal, it has no impact on pleasure and intention under
both offline and online environment; effect of
dominance on tense arousal was not statistically
significant in an online shopping environment; both
energetic and tense arousal has a positive and/or
negative impact on pleasure.
Kolko (2000) finds that cities that are farther away from
other cities are more likely to make use of the internet;
Forman, Goldfarb, and Greenstein (2005) find that
rural areas are on the margin more likely to adopt
participation technologies, as defined above, that aid
communication across establishments; and Sinai and
Waldfogel (2004) find that conditional on the amount of
local content on the internet, people in smaller cities are
more likely to connect to the internet than people in
larger cities.
Brynjolfsson and Smith (2000) and Clay, Krishnan,
and Wolff (2001) find that prices drop due to the
introduction of online book markets.
Scott Morton, Zettelmeyer, and Silva-Risso (2001)
document that consumers who used an online service to
help them search for and purchase a car paid on average
two percent less than other consumers.
Yaobin Lu (2011) focused on factors that influence
users’ intention to transfer their usage from the offline to
the online channel that offer similar services. The study
revealed that innovativeness in new technology and
relative benefit had positive effects on users’ intention to
transfer usage. Moreover, the findings of the study also
indicated that internet experience moderates the
relationship between relative benefit and consumers’
intention to transfer usage from offline to online services.

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Brown and Goolsbee (2004) find that price comparison
websites led prices for term life insurance policies to fall
by 8-15 percent.
Sengupta and Wiggins (2006) document price
reductions in airline tickets driven by online sales.
Waldfogel and Chen (2006), while finding price
comparison websites weaken brand effects, find that
brand still matters for sellers in a number of product
markets.
Jin and Kato (2006), Resnick et al. (2006), and
Cabral and Hortaçsu (2010) both show how seller
reputation on online auction sites is correlated with
transaction prices.
Dinlersoz and Pereira (2007), Koças and Bohlmann
(2008), and Loginova (2009) construct models where
heterogeneity in consumers’ views toward the
substitutability of products sold in the two segments
affects firms’ optimal online strategies.
Tony Ahn, Seewon Ryu, Ingoo Han(2004) explored
online and offline features of Internet shopping malls
and their relationships with the acceptance behaviours of
the customers. Web survey with a 932 users was
conducted in 6 shopping malls in Korea. The study
validate technology acceptance model (TAM) on
predicting the acceptance of the Internet shopping malls.
Online and offline features have positive effects on the
user acceptance, usefulness, attitude and intention to use.
Aron M. Levin, Irwin P. Levin, and Joshua A. Weller
(2005) for their study used two samples of size 199 from
a large mid-eastern American University and an online
survey panel. The study found that the preferences for
shopping online or offline were shown to vary across
products, consumers, and stages of the shopping process.
When attributes such as large selection and shopping
quickly were predominant, online shopping was
preferred. When attributes such as personal service and
ability to see-touch-handle the product were
predominant, offline shopping was preferred.
Junhong Chu et. al. (2010) explored the moderating
effects of household (e.g., shopping frequency)and
product (e.g., sensory nature) characteristics on brand
loyalty, size loyalty and pprice sensitivity across online
and offline channels of grocery products. Data was
collected from one of the five leading grocery chains in
Spain. The study found that the households were more
brand loyal and size loyal but less price sensitive in the
online channel than the offline channel.
Rick L. Andrews Ourso and Imran S. Currim (2004)
examined behavioural differences between consumers
attracted to online shopping and traditional supermarket
shopping using actual choice data from an online
supermarket and traditional scanner panel data. The
study found that as compared to traditional supermarket
consumers, online consumers prefer larger sizes to
smaller sizes, do more screening on the basis of brand
names, do less screening on the basis of sizes, have
stronger choice set effects.
Koen Pauwels et. al. (2011) found that the offline
revenue impact of the informational website critically
depends on the product category and customer segment.
The lower online search costs were especially beneficial
for sensory products and for customers distant from the
store. In contrast, customers in a particular segment
reduce their shopping trips, suggesting their online
actions partially substitute for experiential shopping in
the physical store.
Dong-Mo Koo, Ji-Hoon Lee (2011) proposed an inter-
relationship among dominance, energetic and tense
arousal, pleasure and their impact on intention. Results
from the from a survey of 406 consumers (217 from
offline store customers and 189 online store users)
demonstrated that dominance had a significant positive
and/or negative effect on both energetic and tense
arousal, it has no impact on pleasure and intention under
both offline and online environment; effect of
dominance on tense arousal was not statistically
significant in an online shopping environment; both
energetic and tense arousal has a positive and/or
negative impact on pleasure.
Isabel P. Enrique and sergio Romàn (2014) examined
the role of several consumers’ cognitive and
psychographic traits in their perception of retailers’
deceptive practices (perceived deception) and the
different effects on perceived deception associated with
online vis- à-vis in-store shopping.

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Utilitarian vs hedonic shopping behaviour:
Utilitarian means relating to practical purposes, or
relating to the idea that usefulness is more important
than beauty. An example of a utilitarian decision is to
purchase a car that gets good fuel mileage instead of a
bigger, more comfortable car. Utilitarian goods are ones
whose consumption is more cognitively driven,
instrumental, and goal oriented and accomplishes a
functional or practical task (Strahilcvitz and Myers
1998). In case of utilitarian shopping, consumer are fully
rational. They analyse each and every aspect of the
product and service minutely before making a decision.
Hedonic goods are consumed for luxury purposes,
which are desirable objects that allow the consumer to
feel pleasure, fun, and enjoyment from buying
the product available. Items that are high on hedonic
value are likely to be subject to want preferences. In
case of hedonic shopping, the beauty aspect of the
product or service is given more importance than the
actual substance. Hedonic behaviours are resulted from
aesthetic and emotional feelings.
There is actually no such strictly utilitarian or hedonic
goods available in this universe. Also absolute utilitarian
buying or hedonic buying is nothing but myth.
Consumers during their decision making processes take
into account both utilitarian and hedonic aspects of
products and services. They choose products or services
based on both their usefulness and their presentability in
the society.
B. Comparison of online and offline shopping in
light of five stage consumer decision making
model:
The five stage consumer decision making model is
shown Figure 1.
Even though online and brick and mortar shopping
channels are two entirely different mode of shopping,
the five stage consumer decision making model is
equally applicable for both the mode of purchase. Let us
discuss each of the five stage consumer decision making
model below-
Figure 1
i) Need recognition: Irrespective of the mode of the
purchase, most decision making starts with some sort of
problem. The consumer feels a difference between the
present stage he/she is in and the ideal stage he/she
wants to be in. That missing thing which can satisfy the
customer’s dissatisfaction, is the need of the customer.
Marketers need to identify this stage and offer products
and services as per the requirement. For example, if a
customer needs to buy a new set of dress to attend an
upcoming marriage ceremony, then this is the need of
the customer.
ii) Information search: Most of us are not experts on
everything around us. In this stage we evaluate the
products and services which can satisfy our needs. Apart
from our friends, family members and neighbours,
nowadays we can look for information on the websites
as well. The major difference between online and offline
shopping regarding this particular stage is the search
cost involved in it. Whereas in case of offline shopping,
it’s time consuming and physically demanding, in case
of online shopping, the search cost is extremely low and
it’s a matter of pressing some keys. This is the stage
where risk management commences. Consumers
evaluate the pros vs cons of purchasing a product. Since
customers remember good experiences over bad ones
more, it’s advisable to spend considerable amount of
time on this stage as customers don’t want to regret later
about the decision they made regarding purchase of a
certain product or service.

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iii) Evaluation of alternatives:
This is the stage where products and services are
compared with each other to choose the best ones
available. Now this decision is absolutely subjective as
consumer choice varies from person to person. One
advantage online shopping companies have over their
brick and mortar counterparts is the variety of products
available online. Due to the higher varieties, customers
have more options to choose from. Apart from that, the
customer review option available online helps customers
to go through the reviews and choose for themselves
from the alternatives available. But one advantage of
offline shops in this aspect is the tangibility factor.
Customers can touch and feel the product. They can also
get a first hand demo and try it on themselves. They can
also interact with the salespeople of the store. That
definitely helps them to make informed choices.
iv) Purchase:
This is the stage where products and services are
purchased after deliberations. In case of offline shopping,
products and services can be used immediately, whereas
in case of online shopping, customers have to wait for
the courier company to deliver the product. In case of
services like softwares, it can be downloaded directly
from the websites and can be used. At this stage a
customer has either assessed all the facts and come to a
logical conclusion, made a decision based on emotional
connections/experiences or succumbed to
advertising/marketing campaigns, or most likely a
combination of all of these has occurred.
v) Post purchase evaluation:
The review stage is a key stage for the company and for
the customer likewise. Did the product deliver on the
promises of the marketing/advertising campaigns? Did
the product match or exceed expectations? In case the
customer is not satisfied with the product and want a
replacement for it, he/she needs to act differently online
and offline. In case of a brick and mortar shop, the
replacement can be obtained by visiting the shop during
the scheduled working hour. Whereas in case of an
online shop, it requires calling up the customer care to
lodge a complaint, waiting for the courier company to
pick up the product and wait for the replacement to
arrive.
III. RESULTS AND DISCUSSION
Comparison of online and offline purchase based on
certain parameters:
i) Convenience: Now, that’s one of the benefits of
purchasing through online medium. Unlike in case of
offline purchase, in case of online shopping, consumers
don’t need to travel all the way to the brick and mortar
shop, jostle with other consumers during festive seasons
rush and face difficulty finding proper parking space for
their vehicles. Online shops are open 24*7 and products
are delivered to the residences or offices of the
customers according to their choice. So a consumer can
just wake up in the middle of the night and place an
order for a smart phone or some apparels. This is one of
the major reasons for the popularity of online shopping.
ii) Variety: An online shop is a customer’s delight. No
offline shop can offer as much variety in different
product categories as an online shop can. Since online
shops do not have to bother about space crunch, they can
make available large varieties of product at the same
place. This large variety gives consumers vast choice
which was not available before the advent of this
medium.
iii) Consumer review: This is one of the benefits of the
online shopping which helps the prospective customers
to learn about the performance of products from
somebody like them even before they can lay their hands
on the products. Once a product is purchased by a
customer through an online store, the customer is
requested by the shopping company to upload their
experiences with the product on the portal so that
customers other customers can read that and decide for
themselves if they want to purchase it or not. That helps
customers to choose the best products for themselves.
iv) Comparison shopping: As customers, we like to
visit few shops before purchasing a product. In case of
offline shopping, that means physically traveling to each
and every shop to check out the products. That’s both
time consuming and physically demanding. But in case
of online shopping, we can effortlessly pull up number
of online shopping sites on our devices and compare the
products on them. Based on the comparison and best

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deal available, we can decide to purchase from a
particular site.
v) Discounts: This is one of the major reasons for
consumers specially youngsters purchasing online. Since
online sellers don’t need to go for costly decoration of
their shops, employ large number of salespeople and due
to disintermediation, they can offer products and
services at a considerable amount of discounts compared
to their brick and mortar counterparts.
vi) Availability of unique products: Nowadays it has
become almost a fashion for manufacturers of electronic
devices and other product categories to launch their
brand new products exclusively on a particular shopping
portal. These products are not at all made available in
any offline shops and only the specific online portal gets
the exclusive right to sell the product. In that case,
customers are left with no options but to purchase these
products on that portal.
vii) Tangibility and trialability: That’s one of the draw
backs of online shopping. In case of brick and mortar
stores, customers can touch the products, feel the
products, can get a first hand demo and in case of
apparels try it out on themselves before purchasing them.
Whereas, online portals offer customers only the
pictures and specifications of products which might not
be sufficient in some cases to undertake informed
buying. Even though nowadays some of the e-tailers are
offering free trials upon delivery where a customer if not
satisfied with the product or service, can return it
immediately. Despite of that, this is one area which will
always hand an advantage to the offline stores against
their online counterparts.
viii) Shopping experience: It’s said, shopping is not
only about just going through the motion and making the
purchase. The shopping process itself, where we sift
through products and feel the colours, textures and feel
them can be extremely enjoyable. Apart from that,
shopping in India is known to be a family outing on
weekends or holidays where the entire family goes out
together, purchase products, catch some movies, visits a
restaurant to take their meals. It becomes virtually a get
together for families on weekends or holidays which
otherwise is not possible because of hectic work
schedules of the family members. Online shopping can’t
offer similar experience. You might be able to purchase
products more easily online, but the experience of
spending valuable times with your family members is
something which can’t be replicated by them.
ix) Delivery of products: Unlike in case of brick and
mortar shops where upon purchase, customers can
immediately use the products, in case of online shopping,
there is considerable amount of lag time between placing
the order and delivery of products which sometimes can
extend upto weeks. As a result, products which are of
immediate use, can’t be purchased online. To tide over
this problem, online portals have started offering same
day delivery or next day delivery of products as
premium services in exchange of certain extra payments.
x) Return of products: That’s something which always
pulls down online shopping companies. Whereas in case
of offline shops customers can visit the respective shop
to exchange their products if not satisfied, in case of
online shopping it entails calling up customer care,
waiting for the courier for reverse logistics, getting the
money back or getting the products exchanged.
Sometimes the entire process might take an entire month.
Even though most of the online shopping sites offer
money back guarantees or product exchange facilities,
the experience could be harrowing.
IV. CONCLUSION
The present literature shows that there are significant
differences between consumer purchase style in online
and offline medium of shopping based on certain
parameters. Despite the rapid growth in online sales in
India and the projection of further uptick in this medium
of shopping, the majority of consumers in India still
prefers the so called ‘real’ shopping experience of brick
and mortar shops. As different studies show, it’s mostly
the youngsters who are fueling the amazing growth story
of online shopping in India. Advent of online medium of
shopping has no doubt hit the offline stores hard. Large
discounts offered by the e-tailers have indeed put
enormous pressure on their bottom line. Adding with
that the ever increasing price of Indian real estate sector
has put the viability of brick and mortar business in
doubt. On the other side, despite of ever growing
customer base of online retailers, none of them have
broken even yet. Offering of huge discounts on products
and services have proven to be the bane for them. The
huge amount of venture capital and private equity funds

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which used to drive these companies have also dried up
recently. The concept of omni-channel strategy has
started taking centre stage whereas retailers are trying to
remain present in both online and offline channel to tap
the demands of maximum number of customers.
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