EVALUATING THE CUSTOMER PREFERENCES OF ONLINE SHOPPING: DEMOGRAPHIC FACTORS AND ONLINE SHOP APPLICATION ISSUE.

Author:Lubis, Arlina Nurbaity
Position:Report - Abstract
 
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INTRODUCTION

Increasingly stable and faster internet presence makes fundamental changes in human behavior. Hence, the distance becomes increasingly meaningless. Communication and trade can occur in a short time without any significant pause. The flow of information becomes very fast and can even convey information from any part of the world in a short time. Bourlakis et al. (2008) pointed out that from all aspects of change in the internet age, online shopping behavior change is the most popular and well accepted change by the marketing community today. More specifically, Ali & Sankaran (2011) point out those electronic interactions through the FAQs' program on online sites can address various consumer information needs that facilitate decision making in aspects of shopping.

Shanthi & Kannaiah (2015) found that although many consumers have begun switching to online stores, most of consumers still choose to shop directly to traditional markets that have a clear physical presence. A person's preference for buying a product, both online and traditional, is influenced by the personality factor possessed by that person. Hence, consumer shopping preferences are defined as the tastes of the consumers measured by the perceptions of the usefulness and benefits of the products offered (Guleria et al., 2015). Shopping preferences are related to someone likes or dislikes shopping methods and are not influenced by consumers' purchasing power. This generally affects purchasing decisions. The focus in understanding consumers is the key in keeping consumers (retain) and making it loyal to the seller. Lubis et al. (2017) states that consumers will only become loyal when they are satisfied. Satisfaction is sourced when we focus on providing services to consumers. This study was conducted to evaluate demographic factors that affect a person's preference in buying products online. The study of demographic influences on online shopping decisions has taken place since 1995 (Fram & Grady, 1997; Kunz, 1997; Mehta & Sivadas, 1995; Sultan & Henrichs, 2000; Stafford et al., 2004; Punj, 2011; Richa, 2012; Rahaman, 2014). This consumer demographic study can help stores make decisions based on the characteristics of their customers whether they should run their businesses online or traditional means. For example, Haver (2008) states that in young age groups called 'green shopper' or beginner generation is more popular to use shopping online. Young people do not want to spend their time going from store to store to make comparisons. They will shop online whenever possible. Richa (2012) in a study indicates that one's shopping preferences are strongly influenced by demographic factors such as age, income, marital status, number of family members and gender. In addition, this research involves the presence of online store applications on smartphones from consumers in influencing their preference for online shopping. The presence of the app can make the experience of using the internet to access online shopping easier. Ease of use is the basis in choosing to shop online (Mauldin & Arunachalam, 2002). However, not all online stores are willing to invest in funds to create an online store application. Moreover, it is theoretically stated that people's shopping preferences have begun to shift to online shopping (Shanthi & Kannaiah, 2015). Nevertheless, some people practically still survive in using traditional markets at certain times or types of shopping. Many traditional stores are turning into online stores by using online shopping apps. Now, smartphone ownership in urban society in Indonesia, including Medan, is very high. The market in Medan itself has also started to tend to lead to online shopping. Various business and shopping activities are already connected to the internet, with some already having an online store application. This study examines whether it should invest funds to create an official online store application (including being part of an official online store) or simply move through third parties of social media like Facebook or Instagram only. To improve the more fundamental understanding, this study also uses demographic factor as a determinant of consumer preference. This is driven by the theoretical basis that consumers form the market itself. Hence, demographic factors which are very fundamental, is regarded able to reflect the state of the market. Many marketers have an interest in understanding population growth in the market, including consumer characteristics such as age, educational level, household, economy and sociocultural issues of society. Thus, by using demographic factors, this study is expected to gain a deeper understanding of the market, consumer behavior and other considerations that lead to purchasing decisions and to assist marketers in setting up market penetration strategies.

LITERATURE REVIEW

The presence of online stores today provides many changes in the buying behavior of the community. The online system makes it easy to communicate and approach customers (Katawetawaraks & Wang, 2011). Wang et al. (2005) states that online stores are becoming more fun for consumers as it comes to consumers 24 hours a day, 7 days a week. Online store applications provide more benefits to consumers. Direct apps help consumers find their options more easily. In addition, online applications help address issues such as security and service guarantees to consumers. The interaction between the consumer and the application system helps to cope with direct contact with the salesperson where some people prefer not to interact with the salesperson (Parks, 2008). Online shopping apps can affect consumer shopping preferences to use online shopping. In this drastically altered marketing context, knowledge of demographic factor will lead to understand how the shopping preferences affect market conditions. Marketing experts always pay attention to major factors such as demographic, economic, socio-cultural, technological and environmental factors in an effort to understand market conditions. Haver (2009) has shown that younger consumers are more familiar and choose online shopping preferences. Richa (2012) evaluates more demographic aspects and concludes that this preference is influenced by gender, age, income and marital status. Therefore, demographic factors can affect consumers' preferences in shopping.

An adequate internet network is capable of bringing about revolutionary changes in the goods and services market. Traditional perspective states that the market is essentially a meeting place between the seller and the buyer (Wahyuni & Ginting, 2017), but with the rapid development of internet, buying and selling no longer has to be done when the seller meets directly with the buyer (Nugroho et al., 2017; Budiharseno, 2017). Along with the development of technology, the understanding of the market began to shift. In the beginning the market happens when the buyer and seller meet in person. The development of the era of communication makes the market happen without having to meet directly, but through telephone conversation. This activity developed into tele-marketing. Internet presence makes sellers and buyers do not have to meet directly, can even happen without any meaningful interaction from the seller or buyer. The presence of an online store makes the buying and selling process simpler. The seller markets the product information on the website or online store, then the buyer can compare the product according to their needs or wishes and make a purchase either in consultation with the seller or not. In the end, the internet presence in marketing and online shopping has resulted in three beliefs, which are time-saving, cost-effective and 'best match' to the desired product (Punj, 2011).

Attendance of online shops provides various facilities in the aspects of buying and selling. Buyers can easily find information, make comparisons between alternative products and stores in an effort to meet their needs and wants, as well as find the best alternative of all the options available. The buyer does not even have to make purchases outdoors to buy the products he wants from either the local shop or from any hemisphere. Katawetawaraks & Wang (2013) point out that the ease of marketing communication provided by the online market greatly influences consumer decisions in choosing to shop online. The conveniences offered by online stores to consumers make online shopping grows rapidly, reaching even 231% in 2007 (Rose et al., 2011). Unfortunately, the presence of online stores also eliminates those aspects...

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