International Journal of Sales & Marketing

Management Research and Development (IJSMMRD);

ISSN(P): 2249-6939; ISSN(E): 2249-8044
Vol. 4, Issue 4, Aug 2014, 41-48
TJPRC Pvt. Ltd.

A STUDY ABOUT THE IMPACT OF PERCEIVED RISK ON ONLINE SHOPPING

AMONG THE WOMEN EMPLOYEES IN CHENNAI
SARA SELVARAJ. S1, KRITHIKA. M2 & S. PANCHANATHAM3
1

Associate Professor, School of Management Studies, Vels University, Pallavaram, Chennai, Tamil Nadu, India
2

Research Scholar, School of Management Studies, Vels University, Pallavaram, Chennai, Tamil Nadu, India
3

Registrar, Annamalai University, Annamalai Nagar, Chidambaram, Tamil Nadu, India

ABSTRACT
According to consumer behavior study perceived risk is that the risk associated with the consumers experience in
the purchase of the products and the degree of expected loss resulting from the purchase and use of a product.
Consumers especially women consumers perceive more risks in online shops than in a traditional retail environment which
in turn results slow growth of online shopping in India. This study hopes to achieve the following goals through the survey
done with 50 women employees of Chennai. First the researcher tries to identify and rank Indian women consumers online
perceived risks and to find out the most prominent risk that prevent the online purchase. Second the researcher like to
examine the effect of risks and risk reduction strategies on consumers intension to buy online shopping. Here Friedman
test and factor analysis are used to identify the same.

KEYWORDS: Perceived Risk, Attitude, Risk Reduction Strategies, Online Buying

INTRODUCTION
Retail is the dominion of women; they shop to purchase both essential and discretionary goods, to relax, and to
socialize. So its not surprising that women account for over 80 percent of consumer spending, or about $5 trillion dollars
annually, according to the U.S. Census Bureau The early days of online shopping were actually quite male-oriented as the
selection of products was limited to computers, software, music, and consumer electronics. Then as the variety of online
goods expanded to food, apparel, home goods, and toys, females took to online shopping. Females can now share more of
the online shopping experience and decision-making with friends and family.

REVIEW OF LITERATURE
According to (Ajzen, 1991), behavioral intention measures how hard an individual is intended to try, or the
strength of intended effort to perform a behavior. Behavioral intention does not perfectly correlate with the actual behavior.
An individual may engage in a less intended choice due to the presence of constraints (behavioral control factors).
In addition, of course, stated intentions often differ from true intentions due to social desirability bias (the tendency to
provide the response that is socially expected) or consistency bias (the need to appear consistent to the analyst, which can
result in stated intentions that are consonant with previously-expressed attitudes, when in reality ones actual behavior will
be dissonant from those attitudes).
Limayem et al. (2000) Employed a longitudinal survey, the first survey measuring respondents attitudes,
online purchasing intention, and so on, and the second survey asking for the number of online purchases they made since
the first survey.
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Sara Selvaraj. S, Krithika. M & S. Panchanatham

A study by Belanger et al., 2002, behavioral intention tends to have a positive association with the actual choice
of that behavior. That is, the stronger an individuals behavioral intention, the more likely she is to perform the behavior.
Want to purchase in nearby future E-shopping intention can measure an individuals cognitive beliefs with respect to
adopting or using e-shopping. This purchasing intention was expressed in various ways such as likelihood, probability,
expectation and so on, and was measured at different time points such as currently, at the next visit, or in the future.
In some studies, e-shopping intention was also assessed by an integration of near-term and long-term intentions.
(Choi and Geistfeld, 2004; Jarvenpaa et al., 2000; van der Heijden et al., 2003; van der Heijden and Verhagen,
2004).
The concept of perceived risk was first introduced by Bauer (1960) and has been frequently used to address
various issues in consumer behavior.
Shopping has long been regarded as a risk taking activity as consumers may be uncertain of a purchase decision
and the consequences of poor decisions (Bauer, 1960).
Cox and Rich (1964) Conceptualized perceived risk as the nature and amount of risk perceived by a consumer
in contemplating a particular purchase decision (p. 33)
Cunningham (1967) Found that consumers appear to alter their perception of risk from product to product.
Cox and Rich (1967) Proposed that there were various issues that may influence consumers perceived
uncertainty, such as the mode of purchase and place of purchase
According to Lee and colleagues (2001), two main categories of perceived risk emerge in the process of online
shopping. The first is the perceived risk associated with product/service and includes functional loss, financial loss,
time loss, opportunity loss, and product risk. The second is the perceived risk associated with context of online
transactions, and includes risk of privacy, security, and no repudiation.
(Senecal 2000; Borchers 2001; Bhatnagar et al. 2002) According to them, the influence of financial risk,
product risk, and concern for privacy and security is significant. However, the fourth dimension of attitude, consumers trust
in the stores, can reduce perceived risk.
Studies on online shopping behavior have focus mainly on demographic, psychographics and personality
characteristics. Bellman et al. (1999) Cautioned that demographic variables alone explain a very low percentage of
variance in the purchase decision. According to Burke (2002) four relevant demographic factors age, gender, education,
and income have a significant moderating effect on consumers attitude toward online shopping. In studying these
variables several studies arrived to some contradictory results. Concerning age, it was found that younger are more
interested in using new technologies, like Internet, to search for comparative information on products (Wood, 2002).
Older consumers avoid shopping online as the potential benefits from shopping online are offset by the perceived cost in
skill needed to do it (Ratchford et al., 2001). On the other hand as younger are associated with less income it was found
that the higher a persons income and age, the higher the propensity to buy online (Bellman et al., 1999; Liao and
Cheung, 2001). Gender differences also related to different attitudes towards online shopping. Although men are more
positive about using Internet as a shopping medium, female shoppers that prefer to shop online, do it more frequently than
male (Burke, 2002; Li et al., 1999).

Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

43

A Study about the Impact of Perceived Risk on Online Shopping among the Women Employees in Chennai

RESEARCH OBJECTIVES

To explore the risk-reducing strategies that women employees follow in adopting the Internet for online
purchasing.

To analyze what types of risk are salient and therefore important to the women employees towards online
shopping.

To know the online shopping characteristics of women employees in Chennai.

RESEARCH METHODOLOGY
This research is about the influence of perceived risk on online shopping among women employees in Chennai.
Research Design
Descriptive research design has been used for the study.
Sampling Techniques
Simple random sampling has been derived from non- probability sampling method to select women employees in
south Chennai, Tamil Nadu, India.
Sample Size & Data Collection
From the total women employees of south Chennai, 50 employees are chosen as sample size for the study and the
data is collected through a Structured Questionnaire.
Tools and Techniques

Percentage Analysis,

Friedman test.

Factor analysis

DATA ANALYSIS AND INTERPRETATION

Table 1: Demographic Details of Respondents
Variables
Age
Qualification
Monthly
Income
Marital
Status
Family Type
How Long

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Category
19 - 29
30 39
40 - 49
Ug
Pg
Less Than 40,000
40,000 60,000
60,000 80,000
Above 80,000
Married
Single
Nuclear
Joint
Less than 3 Months

Frequency
27
21
2
16
34
26
18
4
2
36
14
35
15
10

%
54
42
4
32
68
52
36
8
4
72
28
70
30
20

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Sara Selvaraj. S, Krithika. M & S. Panchanatham

Using
Online
Shopping
Frequency
of Online
Shopping for
the Past 6
Months
Amount
Spent on
Online
Shopping for
the Past 6
Months

Purchase
Adoption in
the Coming
Year

3 6 Months
6 12 Months
1 2 Years
More Than 2 Years
1 2 Times
3 5 Times
6 10 Times

13
6
12
9
16
23
7

26
12
24
18
32
46
14

More Than 10 Times

1000 - 3000
3001 5000
5001 7000

30
10
2

60
20
4

Above 7000

16

Definitely Will Buy

Probably Will Buy
May Or May Not Buy
Probably Will Not Buy
Definitely Will Not Buy
Beginner
Intermediate
Expert

18
20
12
0
0
18
27
5

36
40
24
0
0
36
54
10

RELIABILITY
Table 2

8
5
9
4
6

Cronbach
Alpha
0.734
0.895
0.706
0.687
0.680

0.817

0.846

5
6
5

0.869
0.906
0.786

No. of Items
Financial Risk
Product Risk
Time Risk
Delivery Risk
Social Risk
Information
Security Risk
Psychological
Risk
Physical Risk
Source Risk
Quality Risk

The internal consistency reliability method was used in this study to determine the reliability of the scale
questions (questions A12 to PPREC 102) by determining the co-efficient alpha.Cronbachs co-efficient alpha is a measure
of the internal consistency of a measurement (Welman, Kruger and Mitchell.2005).
The co-efficient ranges from 0 to 1 and shows the degrees to which all items in a measurement scale measure the
same attribute. A value of 0.7 and above generally indicates the satisfactory internal consistency reliability.
(Nunnally and Bernstein, 1994).

Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

45

A Study about the Impact of Perceived Risk on Online Shopping among the Women Employees in Chennai

FACTOR ANALYSIS: (RISK REDUCTION STRATEGIES)

KMO and Bartlett's Test
Table 3
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy
Approx. Chi-Square
Bartlett's Test of
df
Sphericity
Sig.

.694
351.134
55
.000

Total Variance Explained

Table 4

Interpretation
There are 11 different risk aversion strategies which are reduced into fewer factors by analyzing correlation
between variables. In this study 11 variables are reduced in to 3 factors which contributes the much of the original data.
From the cumulative percentage column, the three factors extracted together accounts for 71.537% of the total variance
(information contained in 11 variables).

FRIED MAN TEST

Table 5
Mean Rank
Quality risk
9.23
Financial risk
8.87
Product risk
7.67
Information
6.68
security risk
Delivery risk
5.86
Product risk
5.25
Psychological risk
4.65
Time risk
3.45
Source risk
2.22
Physical risk
1.12
** 1% level of significance.

Rank
1
2
3

Chi-Square Value

P-Value

2707.830

0.001**

5
6
7
8
9
10

INTREPRETATION
Perceived risk in online shopping denotes the nature and amount of risk perceived by a consumer in
contemplating a particular purchase decision .The above table shows the respondents views about Perceived risk during
the buying process.

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Sara Selvaraj. S, Krithika. M & S. Panchanatham

For measuring the perceived risk ten types of risk were taken up for the study. From the mean values of the items
taken, it is found that the order of importance for perceived risk is quality risk, financial risk, product risk, information
security risk, delivery risk, product risk, psychological risk, time risk, source risk and physical risk.

FINDINGS

Through this study, it is found that majority of the online buyers (54%) are from the age group 19-29. This finding
is consistent that younger generation did more online shopping because of their knowledge and familiarity with
computer technology compared to older generation.

From this study, it is found that 52% of online buyers were from monthly income group less than 40,000.

Through this study it is found that 68% of the online buyers had postgraduate degree.

It was found that 28% of the online buyers were single, most of them pursue their study or in their early career
development stage.

Marital status also plays an important role in persons online shopping behavior. It was found that there was no
impact of nuclear or joint family on online buying behavior.

Majority of respondents have done online shopping occasionally i.e. 1-2 purchases for the past 6 month period.

60% of the online buyers spend 1000-3000 in one transaction. The reason for this is due to lack of trust and
perceived risk in purchasing high-involvement products.

According to this study 70% of the respondents belongs to nuclear family type.

54% of the women employees reveal that they are in the intermediate level of online shopping experience.

According to the mean score value, the quality risk plays an important role among women employees.

Among perceived risks, quality risk, product performance, transaction security, time-consuming, internal
psychological and financial loss are the most concerned by consumers. Depending on the degree of the risks as
threats, they look for strategies such as product information, secured mode of payment and money back guarantee.

SUGGESTIONS AND CONCLUSIONS

The purpose of the study was to examine the perceived risk associated with intention to purchase from online.
Among the ten risk dimensions, Quality risk is considered to be more important among women employees. Finance risk is,
however, also quite important to women online shoppers. Risk reduction strategies, such as information about the product,
payment security, money-back guarantee, past experience using this product-brand, and buying a well-known brand, over
personal risk reduction strategies, such as information from family and friends, comments on the Internet, website loyalty,
and possibility of communicating with a salesperson (by phone or mail). Adopters of online shopping are predominantly
young, single and well educated. Majority of the online buyers purchases occasionally.
The findings of this research may outline as implication for online retailers in order to enhance their women
customer knowledge and develop their online marketing strategy effectiveness. Also help online retailers learn how to
convert browsers to purchasers to capture revenues lost to abandoned shopping carts.

Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0

A Study about the Impact of Perceived Risk on Online Shopping among the Women Employees in Chennai

47

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Impact Factor (JCC): 5.3064

Index Copernicus Value (ICV): 3.0