Online Shopping Habits

1
Online Shopping Habits

• Josh, Anthony, Jennifer and
• Samantha

2
Agenda

• Secondary data
• Survey
• Hypotheses / Results
• Findings
• Conclusion
• Interpretation

3
Secondary Data

• Online shoppers are
• Spending more time online
• Buying more often
• Spending more money in the process
• Average of 86.31 in 2000 compared to 49.53 in
  1998
• Total purchases increased from 4 billion in 1998
  to 23 billion in 2000.
• Source Wharton Study 2000

4
Secondary Data

• Men shop online more than women
• 53 of online shoppers are men
• 47 are women
• This is because
• Men are early adopters of the internet
• Feel more comfortable providing credit card
  information
• Source Wharton Study 2000

5
Secondary Data

• Growth of at-home broadband access has grown from
  15-27 million users over the course of a year.
  And of other users who have home Internet access,
  8 plan to acquire broadband access in the
  present year.
• Source Arbitron Study

6
Increased Broadband Penetration
7
Secondary Data

• 92 of Americans are concerned about credit card
  theft online
• Source pewinter study

8
Nearly All Consumers Have Concerns About Online
Shopping

• Source Hart Research for WAVE Systems

9
Survey

• 34 questions asked
• 100 respondents
• Convenience sample
• Conducted the week of May 6, 2002

10
Sample Questions

• Nominal Scale- a measurement that assigns only an
  identification or label to an object or set of
  objects. Example
• Have you ever purchased a product from a company
  on the internet?
• Yes
• No

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Sample Questions

• Ordinal Scale- a measurement that assigns only a
  rank or order to a set of objects. Example
• Rank the type of site from which you most often
  make purchases?
• Travel
• Flowers/Gifts
• Books/Music/ Movies
• Electronics/Computers
• Clothes
• Financial Services

12
Sample Questions

• Interval Scale- a scale with the property that
  units have the same width throughout the scale.
  Example
• How secure do you feel internet shopping is?
• 1---2---3---4---5---6---7---8---9---10
• Not Secure Very Secure

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Sample Questions

• Ratio Scale- a measurement that has a true or
  meaningful zero point, allowing for specification
  of absolute magnitudes of objects. Example
• What is the maximum amount you are willing to
  spend on an online purchase?

14
Hypotheses

• 4 Hypotheses tested

15
Overview of T-test

• T-test assesses whether the mean of two groups
  are statistically different from each other.

16
Hypothesis 1

• H0- Frequency of online shopping is equal for men
  and women
• mm mw
• H1- Frequency of online shopping is not equal for
  men and women
• mm ? mw
• Q3 Have you ever purchased a product/service
  online?
• Q12 how many times do you shop online?
• Q30 What is your gender?

17
Results

• We calculated the appropriate statistic
• tobt -0.470
• Now we need to evaluate it based on its sampling
  distribution
• tobt gt tcrit 
• df N 2 75-2 73
• Look in Table A-4
• For 95 confidence interval, tcrit 1.993
• Since 0.470 lt 1.993, we accept H0

18
Hypothesis 2

• H0- Frequency of online shopping is equal for
  dial-up and broadband customers
• md mb
• H1- Frequency of online shopping is not equal for
  dial-up and broadband customers
• md ? mb
• Q4 How do you connect to the internet?
• Q12 how many times do you shop online?

19
Results

• We calculated the appropriate statistic
• tobt -1.018
• Now we need to evaluate it based on its sampling
  distribution
• tobt gt tcrit 
• df N 2 77-2 75
• Look in Table A-4
• For 95 confidence interval, tcrit 1.992
• Since 1.018 lt 1.993, we accept H0

20
Hypothesis 3

• H0- Fraud on the internet influences online
  purchases
• mf mnf
• H1- Fraud on the internet does not influence
  online purchases
• mf ? mnf
• Q15 How much does potential credit card fraud
  influence online purchases?

21
Results

• We calculated the appropriate statistic
• tobt 15.444
• Now we need to evaluate it based on its sampling
  distribution
• tobt gt tcrit 
• df N 1 75-1 74
• Look in Table A-4
• For 95 confidence interval, tcrit 1.993
• Since 15.444 gt 1.993, we reject H0

22
Hypothesis 4

• H0- Online purchases are made in equal amounts in
  each of the identified categories
• mf mnf
• H1- Online purchases are not made in equal
  amounts in each of the identified categories
• mf ? mnf
• Q20 From what category was your first online
  purchase
• Q21 Rank the type of site from which you most
  often make purchases

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Results
Category Mean Std. Deviation First Purchase
Travel 2.66 1.61 14
Flowers/Gifts 3.92 1.51 3
Books/Music/Movies 1.77 0.98 30
Electronics/ Computers 2.96 1.55 9
Clothes 3.09 1.55 13
Financial Services 4.65 1.49 1
24
Results

• Respondents indicated a preference for the
  category of Books/music/movies when ranking
  sites most used for purchases
• Additionally 30 made their first purchase at one
  of the sites in this category
• So, we reject H0

25
Conclusion

• Secondary data supports all the hypotheses
• Primary data supports 2 of the 4 hypotheses
• Credit card fraud results differed from secondary
  data
• Expected one category to be preferred over the
  others and survey revealed most popular category

26
Interesting Results

• 11 have no access to the Internet
• 46 have been on the internet more than 4 years
• 70 use the internet daily
• 42 consider their skill level on the Internet to
  be expert

27
Interesting Results

• 60 use offline information to shop online at
  least occasionally
• 63 use online information to shop offline at
  least occasionally
• 41 rate price the most important factor when
  shopping online

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Interpretation

• Data supports continued growth of online shopping
  creating business opportunities
• Faster internet connections and software
  advancements will create new ways to shop online

29
Questions?