The impact of mobile shopping channels on research shopping and show rooming behaviour

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MASTER THESIS

“The impact of Mobile Shopping Channels on Research Shopping and Show

Rooming Behaviour.”

University of Amsterdam

Faculty of Economics and Business

MSc. In Business Administration

Track: Marketing

Thesis supervisor: Dr. Umut Konus

Student: Kerim Karakis Student number: 10989323 Email: karakiskerim@gmail.com Date: 29th of January 2016

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Statement of originality

This document is written by Student Kerim Karakis who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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3 Acknowledgement

I would like to thank my supervisor, Dr. Umut Konus for his support and guidance in writing this Master Thesis. The communication and the structure of this guidance were really efficient. I realize this even more when I compare it with the guidance those other students had with their supervisors. Besides that, Dr. Umut Konus had a lot of knowledge about this subject which helped me even more with writing this thesis.

I will finish my Master Business Administration with this thesis, whereby I learned a lot of things. Next step is finding a job that meets my preferences.

I hope you will enjoy reading this thesis about an extremely interesting topic. Kind Regards,

Kerim Karakis 29th of January 2016

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4 Abstract

The changing consumer behaviour and the increase in use of mobile devices (e.g. smartphones or tablets) create new challenges for retailers and researchers to understand how consumers search for information or purchase products in a multi-channel environment. This research focuses on the research shopping and show rooming behaviour of consumers in a multi-channel environment where mobile channels are integrated. Research shopping is explained as a behaviour whereby consumers search for products or services on mobile or non-mobile online channels (e.g. pc or laptop) and purchase the product at the retail store which is an offline channel. Otherwise, show rooming behaviour is searching products or services at offline channels and purchasing it on mobile or non-mobile channels. This research has a focus on a multi-channel environment with mobile channels and offline channels. The insights of this research should show if research shopping and show rooming behaviour exists in a multi-channel environment with mobile channels. Besides that, the psychographic and demographic drivers which could have an influence on this consumer behaviour if it exists are examined as well. The insights of this research should help managers with their multi-channel marketing strategy and give insights for further research in terms of research shopping and show rooming behaviour.

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Index of tables

Table 1: Psychographic drivers, research shopping and show rooming ... 20

Table 2: Perceived costs or benefits, research shopping and show rooming behaviour (Konus, Neslin, Verhoef, 2014) ... 22

Table 3: Demographic drivers, research shopping and show rooming ... 24

Table 4: differences between mobile marketing and mass marketing. Source: Shankar, Balasubramanian, 2008 ... 26

Table 5: Shopping process phases in mobile marketing. ... 28

Table 6: Drivers of research shopping and show rooming behaviour in a multi-channel environment. ... 33

Table 7: Percentage of specific gender among respondents, N= 124 ... 52

Table 8: Education level among respondents N=124 ... 52

Table 9: Amount of hours spend per day on mobile device, N=124 ... 52

Table 10: Amount of hours spend per day on mobile device, N=124 ... 53

Table 11: Cronbach’s Alfa ... 53

Table 12: Research shopping and Show rooming behaviour mobile-offline. N=124 ... 57

Table 13: Binary Logit regression, price consciousness and show rooming behaviour, *p>0.05 .. 58

Table 14: Binary Logit regression, price consciousness and research shopping behaviour, *p>0.05 ... 59

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7 Table 15: Binary Logit regression, innovativeness and research shopping behaviour, *p>0.05 ... 60 Table 16: Binary Logit regression, shopping enjoyment and show rooming behaviour, *p>0.05. 61 Table 17: Binary Logit regression, convenience and research shopping behaviour, *p>0.05... 62 Table 18: Binary Logit regression, time pressure and research shopping behaviour, * p>0.05 .... 63 Table 19: Binary Logit regression education level and Research shopping behaviour, * p>0.05 .. 64 Table 20: Binary Logit regression Gender and Research shopping behaviour, * p>0.05 ... 64 Table 21: Hypotheses testing... 65 Appendix B: Tables Research Analysis SPSS hypothesis testing ... 85

Index of Figures

Figure 1: Graphical explanation of Research Shopping and Show Rooming behaviour ...9 Figure 2: Five types of Mobile-Assisted Shoppers (Khan, 2014)………... 28 Figure 3: Conceptual framework Research Shopping and Show rooming in multi-channel

environment ... 37 Appendix C: Conceptual Framework ... 92

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8 1. General introduction

In the last decade there is a growing phenomenon of shopping via multiple channels, whereby consumers are using different devices which they can use anywhere and anytime. As a response to this consumer behaviour are companies adding different channels to search or purchase products or services (Beck, Rygl, 2015). This is probably not surprising if you notice that 1 out of 5 households in the Netherlands own 2 or more tablets (Marketingfacts, 2015). In this multi-channel environment consumers are also purchasing more via mobile channels and non - mobile online channels instead of offline channels (Waasdorp, 2015; Funk, 2007; San-Martín, Prodanova, Jiménez, 2015). Mobile channels consist of tablets or smartphones, non-mobile online channel is for example a computer and an offline channel is the retail store. These trends has an influence on the multi-channel environment, because the difference between channels are blurring and natural borders between channels are disappearing (Verhoef, Kannan, Inman, 2015).

So, the consumer behaviour is changing which causes also a change in retailing, whereby retailing is transforming and anticipating to new developments and the needs of the consumers as mentioned above (Funk, 2007 Salesforce, 2014; Marketingtribune, 2015). This multi-channel retail environment results in a channel landscape in which retailers give the possibility to consumers to purchase or order a product on a mobile or non-mobile online channel and pick it up in the store, which depends on the location or device of the customers (Beck, Rygl, 2015). The phenomenon of searching for products or services at a specific channel and purchasing the product at different channels is called research shopping and show rooming. More specifically, research shopping behaviour is defined as searching for a product or service on mobile or non-mobile online channel and purchase the product at an offline channel like a retail store (Verhoef, Kannan, Inman, 2015). For example, consumers search for reviews or other specific information on mobile channels and purchase the products in the retail store.

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Several businesses are anticipating on these trends and changing consumer behaviour, because as a response they integrate a pick-up option for consumers to search and order products on mobile applications and purchase or it up in the retail store or another pick-up point (Khan, 2014). For example, clothing brand Pull and Bear has a mobile application where you can search for clothes and order them. After ordering the products you are able to pick-up the products in several Pull and Bear stores in several countries.

Show rooming behaviour is defined as searching for a product or service in an offline channel and purchasing it on a mobile or non-mobile online channel (Verhoef, Kannan, Inman, 2015; Chiou, Wu, Chou, 2012; Verhoef, Neslin, Vroomen, 2007; Konus, Neslin, Verhoef, 2014). For example, consumers search for phone subscriptions first at retail stores to talk with an employee or to touch, view and try a specific smartphone (TNS Nipo, 2013). After doing their research in the store they are purchasing the products on mobile channels. The interesting thing is what specific factors are which could have an effect on this show rooming behaviour. Are consumers show rooming, because they like to shop or search for products in the store? In this study we will research what kind of drivers will have an effect on show rooming and research shopping behaviour and if this behaviour exists in a multi-channel environment where mobile channels are integrated.

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In the marketing literature many studies had already showed that research shopping and show rooming behaviour exists in multi-channel environment with non-mobile online versus offline channels and influenced by psychographic and demographic drivers as shopping enjoyment or price consciousness (Verhoef, Neslin, Vroomen, 2007).

However, now the marketing environment has changed and the use of mobile devices is increasing where consumers can search and purchase, could lead to a new form of consumer behaviour and change the existing attitude or behaviour in terms of research and show rooming behaviour.

Does research shopping and show rooming behaviour exist in a multi-channel environment where mobile channels are also present and what are the drivers in such a context?

To answer this question this research will focus on the existence of research shopping and show rooming behaviour in a multi-channel environment where mobile channels are present. Besides that, if both of these forms of behaviour are present in a multi-channel environment, this research will measure what psychographic or demographic drivers do have an influence on research sopping and/or show rooming behaviour. For example, consumers who are younger and higher educated are more research shopping than older and lower educated people. Besides that, consumers are searching for the best offer at mobile channels, but they will purchase the product in the retail store because they are price conscious.

This research will give managers insights about the existence of research shopping and show rooming behaviour in a multi-channel environment where customers also use mobile channels and what drives customers to search or purchase in a specific channel. For example, if you know as a manager that consumers use mobile or a non-mobile online channel only to purchase products after search or viewing them in the shop than you would not invest too much in mobile or non-mobile online customer experience.

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On the contrary, a company will invest more on customer experience in the retail store and activate customers to visit the retail store for the best brand or product experience.

For example, if research shopping behaviour is mainly seen among their customers and an important reason for this is time pressure, than managers will think about a strategy which should save time in the search and purchase process at different channels. So, managers would obtain knowledge on which elements they should focus in the purchase process which is in this situation saving time for their customer. But, this could also be the experience of consumers if shopping enjoyment is much more important for them.

So, they can benefit from the knowledge as described above if they know what consumers drive to search or purchase in a specific channel, because they can anticipate and implement this knowledge in their multi-channel business strategy. With this information the needs of consumers in the purchase process or the needs at a specific channel could be fulfilled.

The academic contribution of this research is to explore the existence and extent of research shopping behaviour in a multi-channel environment where customers also use mobile channels. Besides that to investigate the drivers of research shopping and show rooming behaviour with specific focus on mobile channels.

This thesis will continue with a full literature review and a theoretical framework whereby key concepts and definitions will be explained regarding research shopping and show rooming behaviour. In addition, there will be a conceptual framework which is an extended literature review that ends with main and sub research questions and hypotheses of this research. Also, a methodology and results part will address which methodology is used and what kind of results are obtained. Finally, the research will end with a conclusion, discussion and managerial implications.

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12 2. Literature review

In this part of the thesis there is an overview of existing literature about research shopping and show rooming behaviour in a multi-channel environment. First, an introduction of the current multi-channel marketing environment will be addressed. Second, the forms of research shopping, show rooming and the influence of psychographic and demographic drivers will be discussed. Third, research shopping behaviour in a multichannel environment with mobile channels will be discussed and the impact of these mobile channels on research shopping behaviour as well. This paragraph will end with the explanation of the research gap and the contribution of this research.

2.1 Multichannel Marketing

Customers have become familiar with the use of several channels in their buying and search process in the past decade. It is becoming common to use different channels at different stages of the purchase and search process (Rangaswamy, van Bruggen, 2005; Verhoef, Kannan, Inman, 2015). The expected increase of mobile channels is around 59% in 2016 in comparison to 2015, more specifically more searches are conducted on mobile devices in approximately ten countries (Kalkofen, 2015). The multi-channel environment means actually that organizations use several channels to send one and the same message and serve the needs of the consumers via different channels (Van Berkum, 2011; Neslin et al., 2006; Melis, Campo, Brugelmans, Lamey, 2015). According to Peterson, Gröne, Kammer and Kirscheneder (2010) businesses in Germany alone wasted more than 1 billion euro a year with unproductive marketing, because these businesses focused on single channels and didn’t respond to the needs of consumers to use several channels for searching and purchasing. The advice for companies is to have a detailed understanding of the channel journey o f customers to identify what work most efficiently and effectively (Peterson, Gröne, Kammer, Kirscheneder, 2010).

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The use of mobile and non-mobile online channels could close gaps in the customer experience and facilitate on customer segmentation, because the use of multiple touch points offers more choices for the customer along the buying journey (Peterson, Gröne, Kammer, Kirscheneder, 2010).

This will make retailers more successful than the traditional way of using single channels for sales or searching products or services, because effective execution of your multi-channel marketing strategy can boost sales efficiency by 10 to 30 percent without jeopardizing revenue growth (McKinsey & Company, 2016). Therefore, it is likely that there will be a radical integration of the consumer experience across several virtual and physical environments, because the borders are blurring between the channels whereby consumers have access to several channels for researching and purchasing products or services all at their fingertips (Van Bommel, Edelman, Ungerman, 2014). In the past the consistency between several channels was not the focus of the organizations, but now optimizing the customer experience on different devices and being consistent at several channels is one of the main rules in a multi-channel environment. So, consumers will receive and experience the same message through all devices and channels within their interaction with organizations. For example, the multi-channel strategy of an organization is that the consumers experience is similar at several channels like their website, the smartphone application and the retail store. In this multi-channel environments are mobile channels getting more important, because the use of smartphones or tablets is increasing (Marketingfacts, 2015; Salesforce, 2014). The multi-channel environment is interrelated with customer touch points, which is an episode of indirect or direct contact with a brand or firm, this could be an online purchase or a purchase at the retail store (Hazan & Wagener, 2012).

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The amount of consumers that research products via mobile or non-mobile online devices prior making a purchase decision are increasing, mainly the researching behaviour at smartphones (Hazan &Wagener, 2012). In the literature this behaviour addressed as research shopping behaviour, but there is also an opposite sort of behaviour which is show rooming behaviour. This behaviour means that a consumer visits a store to check out the product and then purchases the product online or on a mobile device (Khan, 2014). In the next paragraph these two forms of behaviour will be addressed in detail.

2.2 Research shopping behaviour and show rooming behaviour

Nowadays a huge amount of shoppers are conducting online search for products before purchasing them (Morrison, 2014). In the past consumer were only researching online before making a big purchase, but the accessibility which is provided by the new mobile devices and channels gives consumers the possibility to research anytime and anywhere (Retailing Today, 2013). Nowadays retailers are supporting and anticipating on the research shopping behaviour of consumers, because they offer new services at several channels like pick-up order options. This means that consumers who are really busy could research and read everything about a product at online or mobile channels, and then they are able to order and purchase the product in the retail store. These options gave consumers more flexibility and convenience if they want to purchase a product or service by using several channels.

Consumers use the internet for several reasons, to research, to compare costs, service, product details, getting insurance quotes, but when the consumers want to purchase the product, consumers mainly want to talk to an advisor or view the product in real life (Smith, 2014). So, these explanations show that research shopping behaviour is frequently experienced at consumers.

Otherwise, there are also consumers who want to talk or experience the product before they purchase it online or via an application on a mobile device.

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These consumers are searching in stores and purchasing the products at non-mobile online or mobile channels. In the research this phenomena is defined as show rooming behaviour. The key concepts in this research are research shopping and show rooming. In this paragraph these key concepts will be explained and it will be addressed how this behaviour works and why it is important for retailers. In addition, there will be explanation of possible psychographic and demographic drivers which could influence research shopping and show rooming behaviour.

2.2.1 Research shopping behaviour

Research shopping behaviour is defined as the way that shoppers search in one channel and purchase in another channel, for example searching online for an interesting smartphone and purchase the smartphone at an offline channel namely the retail store (Verhoef, Kannan, Inman, 2015; Bodur, Klein, Arora, 2015). According to Verhoef, Neslin and Vroomen (2007) this is the most common form of shopping research shopping, namely searching on internet for products and buying them at the retail store. So, consumers are actually researching on non-mobile online channels to look up prices, specific information and recommendations about the products and in the end the product is purchased in the retail store.

The effort that a consumer is spending to acquire information at a non-mobile online channel or the environment for a specific purchase is the consumer information search process (Maity, Dass, Malhotra, 2014). The search process of consumers has two dimensions.

First, the amount of search, which is the number of times a source is examined or the extent of search and secondly the time which is spent on search, the total time that is required to search (Maity, Dass, Malhotra, 2014).

However, an important question is why consumers are searching online and purchasing offline? Consumers are doing research for several reasons at online channels, because of the best price, service, reviews or recommendations about products or services.

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Price comparison websites give consumers a snapshot of the prices in the markets and after searching on these websites consumers gain useful information if they are price conscious (Bodur, Klein, Arora, 2015). Besides that, consumers could use the online channels to obtain information from other consumers, by reading recommendations or reviews about products (Smith, 2014). For example, consumers couldn’t have enough time to search for products in the stores and look up these products at online channels which is more time-efficient and convenient. In addition, the research shopping behaviour could provide the consumers also a smart shopper behaviour, whereby they might feel smart if they purchase after an exhaustively research (Balasubramanian et al., 2005; Chandon, Wansink, & Laurent, 2000).

2.2.2 Show rooming behaviour

In the last paragraph research shopping behaviour is described as a form of consumer behaviour in a multi-channel environment. Also a sort of similar form of behaviour will be addressed. The opposite form of research shopping behaviour is show rooming behaviour. Show rooming behaviour explains that consumers are searching for information at an offline channel and look at non-mobile online or mobile channels for more information and searching for the most attractive prices to purchase a product (Verhoef, Kannan, Inman, 2015).

Consumers could prefer to experience the look and feel of a product in real life. Namely, consumer could not get satisfaction or experience at a non-mobile online or mobile environment. The consumers search for products in the retail stores to gain information from sales advisors and to touch and feel the products to get the real experience.

Consumers that search at the retail store shouldn’t be price conscious, because the price conscious consumers are purchasing mainly online after doing fast research and price comparisons (Scarpi, Pizzi, Visentin, 2014).

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Consumers mainly shop for fun at offline channels, whereby time pressure is not an issue. Even if consumers are deal hunting and shopping for fun, the consumer experience is more than at non-mobile online or mobile channels (Scarpi, Pizzi, Visentin, 2014). In addition, when consumers are shopping for fun, they are more familiar with the offline stores, besides that the offline stores have a greater maturity which means that consumers do not expect lower prices in these stores (Scarpi, Pizzi, Visentin, 2014). The way of searching and purchasing at different channels could be different per product category in a multi-channel environment. For example, consumers who are buying clothes could have the attitude that they want to see or fit the clothes before purchasing it. This could be really different in terms of flight tickets, because the most money is spend for flight tickets in the Netherlands in terms of online purchase (Schellevis, 2014). It is interesting to know what consumers drive to purchase or search in a specific channel, this will be discussed in the next paragraph.

2.3 Factors impacting on Research Shopping and Show Rooming.

There are several motives that consumers drive to purchase and search in a specific channel in a multi-channel environment with mobile channels. In this paragraph these several factors will be addressed and discussed.

According to Konus, Verhoef and Neslin (2008) there are demographical and psychographic customer characteristics which drive consumers in a multi-channel environment. Several studies found consumer characteristics which have an impact on research shopping behaviour in a multi-channel environment with mobile channels (Konus¸ Verhoef, Neslin, 2008; Shankar, Venkatesh, Hofacker, Naik, 2010).

These factors that drive consumers to purchase in a mobile or non-mobile online channel are really interesting when the offers in all channels are identical.

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18 2.3.1 Psychographic factors

First, consumers focus on paying a low price if they are price consciousness (Konus¸ Verhoef, Neslin, 2008; Scarpi, Pizzi, Visentin, 2014). This is a form of saving, because consumers seek to minimize the price they pay for a product (Lichtenstein, Netemeyer, Burton, 1990). The price perception of a channel could influence the channel choice of the consumer, for example consumers could think that the prices at non-mobile online or mobile channels where always less due to the costs for the retailers (Scarpi, Pizzi, Visentin, 2014). Nowadays, research shoppers have the power to search for most attractive deals across channels and purchase the product with the best price.

The expectation is that price conscious consumers will search in several channels and will purchase in the most beneficial channel. Price consciousness could be an important driver for research shopping behaviour in a multi-channel environment with mobile channels, because the consumers are seeking for the best offers in terms of price and other factors are less important for them (Konus¸ Verhoef, Neslin, 2008; Scarpi, Pizzi, Visentin, 2014).

Second, there are consumers who like shopping and see this activity as an emotional, entertainment beneficial experience and get pleasure and fun from shopping, this phenomenon is defined as shopping enjoyment (Konus¸ Verhoef, Neslin, 2008; Bruner, 2009). In terms of channels selection is social setting, like shopping with friends or shopping at a cozy store an important driver, but shopping enjoyment could also take place at non-mobile online or mobile channels (Yang, Kim, 2012; Konus, Verhoef, Neslin, 2008).

According to Verhoef, Neslin and Vroomen (2007) may shopping enjoyment promote multi-channel use, because consumers enjoy shopping they want to try new things and get new ideas anywhere and anytime (Ailawadi Neslin, Gedenk, 2001).

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Shopping enjoyment is a driver for research shopping behaviour in non-mobile online and mobile channels, since consumers could choose for one of these channels because of entertainment and emotional benefits.

For example, consumers search for information about the product at non-mobile online channels, but they will purchase the product in an offline channel and combine this purchase with visiting the store with friends or their family. Shopping at an offline channel to purchase products could be seen as an activity for consumers to spend their day.

Third, innovativeness is an important factor for research shopping behaviour which refers to the scale of someone tries different and new products and search for new experiences (Konus¸ Verhoef, Neslin, 2008; Shankar, Venkatesh, Hofacker, Naik, 2010). Innovative consumers are searching more widespread and they are searching for different products and experiences than other consumers. Besides that, innovative consumers are able to adopt new technology in an earlier stage than other consumers (Aldas-Manzano, Ruiz-Mafe, Sanz-Blas, 2008). Mobile channels are mostly new, constantly changing and there are a large number of monthly updates and improvements. Innovative consumers have access to several channels and are open to search for products at different channels like the mobile channels (Yang, Kim, 2012). Fourth, time pressure which is the consumer’s tendency to deliberate time as a limited resource and plan is an important driver of research shopping behaviour (Konus¸ Verhoef, Neslin, 2008). Channel selection is influenced by temporal variables like urgency of the purchase and time of the day. Mobile and non-mobile online channels are known by their time-saving benefits and this means there is a positive relationship between time pressure and the advantages of online channels (Konus¸ Verhoef, Neslin, 2008). Time-conscious consumers are really concerned about their time and will look for opportunities to control their time (Lee, Paswan, Xavier, 2009).

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Time-conscious consumers are probably using non-mobile online and mobile channels, because this is time-saving and it is really convenient like online channels (Xu-priour, Cliquet, Fu, 2012).

The result is that these consumers will search and purchase in the most time-saving channel and ignore the availability of other channels. So, there is probably a relationship between research shopping or show rooming behaviour and time-consciousness.

Fifth, the convenience of non-mobile online channels is their usage situation which is an important driver for consumers in their consumer behaviour, because the degree in which these attributes are convenience could be experienced as a benefit for consumers (Konus, Neslin, Verhoef, 2014). Convenience could be divided in search convenience and purchase convenience. According to Konus, Neslin and Verhoef (2014) means search convenience, obtaining information quickly and at any time of the day. In addition, purchase convenience means the effort that is required to buy a product (Konus, Neslin, Verhoef, 2014).

Psychographic drivers Source

Price consciousness Konus¸ Verhoef, Neslin, 2008; Scarpi, Pizzi, Visentin, 2014

Shopping enjoyment Ailawadi, Neslin, Gedenk, 2001; Yang, Kim, 2012; Konus, Verhoef, Neslin, 2008; Verhoef, Neslin, Vroomen, 2007

Innovativeness Konus¸ Verhoef, Neslin, 2008; Shankar, Venkatesh, Hofacker, Naik, 2010; Yang, Kim, 2012

Time Pressure Lee, Paswan, Xavier, 2009; Xu-priour, Cliquet, Fu, 2012; Konus¸ Verhoef, Neslin, 2008

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21 2.3.2 Benefits and cost factors

Besides psychographic factors which could have an influence on research shopping and show rooming behaviour, there could also be behavioural or economical benefits for consumers. There are benefits of using mobile or non-mobile online channels which provides first of all convenience which are not available at other channels than these.

There are costs and benefits like assortment, convenience, prices, risks, enjoyment et cetera (Konus, Neslin, Verhoef, 2014). According to Konus, Neslin and Verhoef (2014) there are several costs and benefits specific for mobile and non-mobile online channels like search convenience which is a benefit for consumers if they use a specific channel, information availability, shopping enjoyment, purchase convenience, service quality, price & promotion, assortment, risk and clientele. According to Konus, Neslin and Verhoef (2014) there could be added two sorts of costs, namely emotion and adjustment. These additional costs could be relevant if consumers want to eliminate a channel. Adjustment cost is defined as thinking and learning in customers acquire when they adapt their behaviour (Konus, Neslin, Verhoef, 2014). Besides that, emotion is explained as an elimination of a channel to force customers to use other channels (Konus, Neslin, Verhoef, 2014).

However, there are also perceived risks or a form of uncertainties, whose are mainly if you have to use personal information or have to pay money for a purchase (Bhatnagar, Ghose, 2004). For example, consumers have to fill in their credit card data for a purchase or other personal information as their address or email. Consumers don’t want to give too much personal information, because they are scared that something bad will happen as somebody uses their credit card or personal information for other purposes.

In terms of mobile and non-mobile online shopping these several perceptions regarding expected benefits and costs influence the decision of consumers to use a specific channel, this could be a mobile or a non-mobile channel (Zhou et al., 2007).

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For example, Consumers could prefer to shop on their smartphone than on a laptop or computer because this has more benefits in terms of convenience. Using your smartphone or tablet has more benefits in terms of convenience, because consumers do have most of the time a smartphone anytime and anywhere which makes it faster than a pc or laptop. So, mobile channels have an essential characteristic which matches the needs of consumers who prefer convenience and accessibility. The costs of security and the benefits of accessibility and convenience could be as well important factors which could have an influence on research shopping and show rooming behaviour (Bhatnagar, Ghose, 2004).

Attribute Cost or benefit Description

Information availability Benefit Comparing prices and assortment easy and fast.

Search convenience Benefit Finding information at anytime.

Purchase convenience Benefit Effort need to buy product.

Service quality Benefit Good assistance and personal advice, which means good service.

Shopping enjoyment Benefit Comfortable and fun to shop.

Assortment Benefit Large, new and high qualitative products.

Clientele Benefit Relatives and friends search in this specific channel.

Price & Promotion Benefit Regular promotion, low prices and attractive offers.

Emotion Cost Dissatisfaction due to changes.

Risk Cost Wrong payments or purchase wrong

product.

Adjustment Cost Effort spend on adapting and thinking when environment of channels changes.

Table 2: Perceived costs or benefits, research shopping and show rooming behaviour (Konus, Neslin, Verhoef, 2014)

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23 2.3.3 Demographic factors

Demographic variables could influence research shopping and show rooming behaviour (Konus¸ Verhoef, Neslin, 2008; Verhoef, Neslin, Vroomen, 2007). According to Konus¸ Verhoef and Neslin (2008) there is not a strong impact of demographics on multi-channel behaviour, because these demographics are less important than attitudes and beliefs.

However, demographics could be important drivers for research shopping behaviour in mobile and offline channels, because the education level or age could be predictors of research shopping at mobile channels. For example, younger and higher educated people make more use of mobile channels than low educated and older people due to amount of smart phone use and the benefits of extensive search.

In addition, gender could also be a factor which influences online shopping behaviour. The fact that somebody is a man or woman has an influence on the likelihood of consumers to buy at mobile channels or non-mobile online channels. It is interesting to see a difference between the two genders. According to Eisler (2013) is the amount of online shopping among man and women pretty similarly, but the way man or woman are shopping or could be reached by retailers is different. Women respond more to email marketing and they are sensitive for coupons or discount codes which are included (Eisler, 2013). Otherwise, men have a more exploring attitude and are looking around for sales by surfing on the web. Men could be best reached by retailers through paid advertising with efficient call to actions where products are shown where they are looking for (Eisler, 2013)

Thus, these factors should be taken into account when studying research shopping behaviour of consumers in mobile-offline channels, because these factors could be potential drivers for research shopping and show rooming behaviour. These demographic drivers are addressed and explained in table 3.

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Demographic drivers Source

Age Konus¸ Verhoef, Neslin, 2008; Verhoef, Neslin, Vroomen, 2007; Joines, Scherer , Scheufele, 2003.

Education Konus¸ Verhoef, Neslin, 2008; Verhoef, Neslin, Vroomen, 2007.

Gender Eisler, 2013; Konus¸ Verhoef, Neslin, 2008

Table 3: Demographic drivers, research shopping and show rooming

2.4 Mobile marketing and mobile shoppers

In the last paragraphs are several sorts of consumer behaviours and the drivers that serve as motives for this behaviour are addressed in a multi-channel environment with non-mobile online and mobile channels. This way of marketing is described as mobile marketing, which is a multi way communication and promotion of an offer between a company and its customers by using a mobile medium, technology or device (Shankar, Balasubramanian, 2008; Souza, 2014). Mobile channels are smartphones, tablets and other handheld devices (Wang, Malthouse, Krishnamurthi, 2015). Whereby, mobile applications make it possible to search or purchase products or services on mobile devices.

Nowadays, consumers are more shopping with mobile devices like their smartphones which means that their shopping behaviour is changed as well (SEW, 2015). Mobile channels are becoming more important for consumers and retailers due to increasing smartphone users and this will reach an amount of two billion people by 2016 (Wang, Malthouse, Krishnamurthi, 2015). So, the addition of mobile channels and social media has changed the retail business models of several companies.

Besides that, there are several reasons why the use of mobile channels is increasing. Mobile channels introduce new advantages in comparison to existing non-mobile online channels. Consumers have different buying strategies while shopping in a mobile environment in comparison to a traditional online web browser channel.

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An advantage is the convenience across temporal and spatial dimensions, which makes it flexible for consumers and it adapts to the needs and schedules of consumers (San-Martín, Prodanova, Jiménez, 2015; Agrebi, Jallais, 2015). Mobile devices provide more interactive, personal and immediate shopping experience, because tablets and smartphones are devices which are always connected and the customers have the opportunity to control everything on their screen immediately. With one finger are customers able to browse or shop on their mobile device in the collection of a retailer in an application (Wang, Malthouse, Krishnamurthi, 2015).

The localization and personalization enable consumers to allow products or services adaptation depending on location and the smartphone is mostly for personal use (San-Martín, Prodanova, Jiménez, 2015; Shankar, Venkatesh, Hofacker, Naik, 2010). Final, the intention to use a smartphone for mobile shopping is an important factor that addresses what the reason is behind this behaviour.

The greater the perceived usefulness, the perceived enjoyment and the satisfaction with the purchase the greater the mobile purchasing has a positive impact on the use of a smartphone (Agrebi, Jallais, 2015). Computers and laptops take longer time for booting-up and consumers have to use other hardware like trackpads or keyboards.

However, there are also limitations of mobile devices’ which their screen size is. Customers have less opportunity to search on smartphones due to screen size, whereby they buy mainly products from firms they already know (Wang, Malthouse, Krishnamurthi, 2015). So, this couldn’t be an issue if customers are loyal to a specific brand.

The convenience of access provided by mobile devices is an important factor for retailers to invest in mobile apps and mobile store-fronts (Wang, Malthouse, Krishnamurthi, 2015). Consumers are always connected due to the telecommunication networks of these devices which are equipped with 4G LTE and WI-FI.

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This paragraph will end with defining the differences between mobile marketing and mass marketing in table 4 (Shankar, Balasubramanian, 2008).

Dimension Mass marketing Mobile marketing

Potential Type of Communication Text, Voice, and video in rich format Text, voice, and video in very limited visual space with limitations in transmission speed.

Scope of audience All existing and potential users of the product.

Existing and potential product users owing mobile devices who opt-in to receive communication.

Typical direction of communication Marketer- to- Consumer Interactive between consumers and marketer.

Ability to measure and track response Low High

Ability to deliver message by target location

Low High

Cost per target audience High Low

Consumers target ability Low Medium

Table 4: differences between mobile marketing and mass marketing. Source: Shankar, Balasubramanian, 2008

2.5 The impact of mobile channel use in research shopping & show rooming behaviour In this paragraph are the impacts and phases of mobile channel use in research shopping and show rooming behaviour addressed and explained.

As already been mentioned the retail environment is changing form a Multi-channel retailing to an Omni-channel retailing, whereby there is a difference between channels because of the disappearing natural borders between channels (Verhoef, Kannan, Inman, 2015). Consumers are equipped with smartphones, they are using online reviews to form an opinion and they have a preference which product they will purchase online, at a store or online and pickup the product in a retail store (Khan, 2014). Consumers have more convenience in terms of research shopping in a multi-channel environment with mobile channels. First, the easiness of searching for information or products on mobile applications is an important benefit.

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Secondly, several companies and brands are anticipating on the research shopping behaviour of consumers from mobile-to-offline channels. They do this by improving the usability of mobile applications and adding options on mobile channels to pick-up products at retail stores when this is possible for the consumers. Nowadays, there are even in-store possibilities to use your mobile application to increase the consumer experience in the retail store. For example, a mobile application gives you to possibility to scan a QR-code and this code provides the consumer about more background information about the product and possible videos to create more visual and rich experience in-store with including different sorts of music.

Finally, consumers could also search for the best priced products on mobile channels, because this is easy and fast. There could also be an association that mobile channels are cheaper than the retail store, because there is not a physical store but a mobile shop which is more cost-saving.

The use of mobile marketing could be in different phases in the shopping process. There are several phases, these are addressed in table 5. First, the searching phase which is possible at all channels depends on the specific company. Consumers are able to search for products or services at mobile channels, non-mobile online channels and the retail store. Second, after searching for the right product with the best price consumers could purchase the products at a specific channel. Some companies offer a possibility to purchase the product at several channels. For example, Pull and Bear which is a fashion brand offers to purchase products at their mobile application, the shop and their website. Research shopping and show rooming behaviour is related with these different shopping phases, because consumers have the possibility to search at a specific channel and purchase it at different channels. Finally, the last phase is after sales. In this phase the focus is laid on the service which is provided after the purchase. The after sales phase could be via different channels which also depend on the offer of the company.

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For example, consumers could have questions about a specific product or the size of clothes could be too big and the consumer wants to change it for the right size. Several companies offer the possibility to give a request of returning products via mobile or non-mobile channels, whereby the company changes the clothes for free at your home. These several phases in the shopping process are related with research shopping and show rooming behaviour.

Mobile channels (e.g. Smartphone, tablet)

Non-mobile online channels (e.g. laptop, pc).

Offline channels (e.g. retail store)

Search X X X

Purchase X X X

After sales X X X

Table 5: Shopping process phases in mobile marketing.

According to Khan (2014) there are five types of mobile assisted shoppers which are addressed in figure 2.

Figure 2: Five types of Mobile-Assisted Shoppers (Khan, 2014)

Traditionalists are consumers who prefer a customer experience at the retail store and don’t think that non-mobile online or mobile channels have enough customer experience. In addition, there are experience-seekers who value the best experience and not the price.

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Price-sensitive’s are the same as price conscious consumers, because they are always looking for deals. Savvys are persons close to price-sensitive, but they are persuadable. Last, there are exploiters who are premeditated about lower prices. According to Khan (2014) a higher amount of consumers are web rooming instead of show rooming and retailers do see the importance of Omni-channel selling, which results in the adoption of e-commerce storefronts to provide better store customer experience. These kinds of services provide customers in-store pick-ups of mobile and online orders, WIFI in in-stores and sales staff with knowledge. According to Khan (2014 there are several specific motives for consumers to visit a retail store after an online order. Consumers don’t want to pay for shipping and don’t want to wait for the delivering of products. Besides that, consumers want to touch and feel a product before they buy it (Khan, 2014).

The most interesting motive is that consumers as the store to price match a better price which they found online and additionally they like the option to return the item to the specific store when needed. So, retailers try to combine demands of consumers and the possibilities of the mobile and non-mobile online channels to create a complete customer experience. With the increasing use of mobile devices and smartphones should the existence of research shopping and show rooming behaviour not being surprising in a multi-channel environment with mobile channels (SEW, 2015; Marketingfacts, 2015; Salesforce, 2014). So, consumers search for products on mobile applications and purchase products in the store or vice versa. And if these phenomena exist in a multi-channel environment, than it is interesting to know what psychographic and demographic drivers have an influence on this behaviour.

The psychographic and demographic drivers have an influence on show rooming and research shopping behaviour in a multi-channel environment with non-mobile online and offline channels. These drivers will be researched in a multi-channel environment with mobile and offline channels. Why does research shopping still exist?

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Why are consumers not purchasing products immediately at a mobile channel? Do consumers prefer buying products in a store due to privacy concerns online or security issues in terms of using payment methods like a credit card? Otherwise, do consumers want personal contact if they buy products or do they want to speak to somebody to ask questions about the product? Is time pressure an important factor to do research via the smartphone and pick-up the product in the store? There could be several reasons for the existence of research shopping and show rooming in a multi-channel environment.

2.6 Drivers research shopping and show rooming.

There could be several reasons for the existence of research shopping and show rooming in a multi-channel environment with mobile and offline channels. The possible drivers or reasons where the focus of this research is laid on for this behaviour in a multi-channel environment will be addressed in this paragraph.

Consumers could have several reasons to buy a product at the retail store or via a mobile application. Price conscious consumers do really care about the price of the product which is an important driver for them that can cause research shopping or show rooming behaviour. Consumers are able to do good research with their smartphones and find the lowest price which makes the smartphone a useful element that strengthens price conscious consumers. Price conscious consumers could have positive associations in terms of price with mobile applications of retailers due to less exponential costs.

Second, Shopping enjoyment could be an important driver for research shopping and show rooming behaviour, because this could drive people to search for products on mobile applications and purchase the product at the store, because these consumers see shopping as a way of entertainment. However, shopping enjoyment could also drive show rooming behaviour. Consumers could search, experience and view products at the store and purchase the product at a mobile channel.

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So, consumers could visit a store for enjoyment, experience and for personal contact if they purchase or search for a product. With the integration of several channels, retailers are trying to create the best customer experience by integrating mobile channel aspect in offline channels (Khan, 2014).

Third, the level of innovativeness of the consumer could be an important factor for research shopping and show rooming behaviour (Konus¸ Verhoef, Neslin, 2008; Shankar, Venkatesh, Hofacker, Naik, 2010). Innovative consumers are searching more widespread and have access to several channels, which increases the chance that these consumers will use mobile applications. Innovative consumers will search across several channels and will probably choose the most easy and modern way to search and purchase a product. It is hard to think that innovativeness is the only driver that motivates consumers for research shopping or show rooming in a multi-channel environment. The level of innovativeness could be a driver which predicts or influences the research shopping or show rooming behaviour in a negative perspective. So, consumers whose are innovative would probably search and purchase only on mobile channels. But, the innovativeness driver would be probably not a separate influencer of research shopping or show rooming behaviour. The level innovativeness could collaborate with a driver as convenience, because consumers whose are innovative and prefer convenience in their shopping process will only purchase and search on mobile channels. Therefore, for these consumers could purchase on a mobile channel and picking up the product at the store or a pick-up point could also be convenient and innovative.

Fourth, time pressure could be an important driver for research shopping and show rooming in a multi-channel environment. Mobile channels are time-saving and so there is a positive relationship between mobile channels and time pressure (Konus¸ Verhoef, Neslin, 2008). Time pressure could be a driver for research shopping, because consumers will search on mobile applications and purchase or pick-up the product at the store after work or school.

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Searching for products at the stores would consume a huge amount of time, and this is not the case on mobile channels. Time pressure could also be an important driver for show rooming. Consumers could view, feel and experience the product in a store. Due to time pressure could consumers purchase the product at a mobile channel which is easier and faster.

So, time-conscious consumers are really concerned about their time and will look for opportunities to control their time. For this reason time conscious consumers will search and purchase in the most time-saving channel and ignore the availability of other channels.

Fifth, convenience is an important driver which could influence research shopping and show rooming behaviour. Convenience could be divided in search convenience and purchase convenience. Search and purchase convenience could be important drivers for research shopping behaviour. Consumers want to obtain information quickly and at any time of the day, this is possible with mobile channels which are convenient in usage. But, do these consumers want to purchase the product at the store or would they purchase it immediately on mobile channels? For this reason is it important to research what purchase convenience exactly means for consumers, because some people would prefer to pick-up products at a shop or pick-up point and others would prefer delivery at home or work. In addition, convenience could also result in increased spending on mobile channels (Wang, Malthouse, Krishnamurthi, 2015). This means that the level of convenience could also influence the level of spending of consumers.

So, convenience could be a driver which will influence research shopping and show rooming behaviour in a multi-channel environment. However, the direction it will influence research shopping or show rooming is interesting. This means would consumers avoid research shopping and show rooming behaviour, because they prefer search and purchase convenience and do both on one channel which could be the mobile channel.

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Finally, demographic variables could influence research shopping and show rooming behaviour in a multi-channel environment (Konus¸ Verhoef, Neslin, 2008; Verhoef, Neslin, Vroomen, 2007). For example, the age and education level could be predictors of research shopping and show rooming in a multi-channel environment. Consumers whose are high educated and have a full-time job could prefer research shopping, because they want to save time with searching and do this on their mobile device and pick-up the product after work at the store or a pick-up point.

Consumers who are young could prefer show rooming, they want to experience, touch and feel the product and purchase it on their smartphone due to convenience or price consciousness. Demographic drivers could be important drivers of research shopping and show rooming in a multi-channel environment as well, because there is a difference in age and usage with searching or purchasing on mobile channels.

Thus, there are several drivers which could have an influence on research shopping and show rooming behaviour in a multi-channel environment where mobile channels are integrated. However, there is also a strong possibility that drivers could collaborate and influence research shopping or show rooming behaviour together.

Overview of psychographic and demographic drivers Price consciousness Shopping enjoyment Innovativeness Time pressure Convenience

Demographics: Age, level of education, gender and use of smartphone or computer in hours.

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34 2.7 Research gap

In existing research there are studies which did research regarding Multi-channel retailing and Omni-channel retailing in online and offline channels. Several studies looked what the touch points are of the customers and what the effect of Multi-channel and Omni-channel retailing is on the customer purchase and research shopping behaviour.

But, there is not sufficient research done about the relationship between mobile channels (i.e. smartphone mobile applications) and offline channels (i.e. retail stores) and the existence of research shopping and/ or show rooming behaviour in these two channels. Due to the increasing importance and use of mobile devices by consumers it is important and interesting to do research regarding the research shopping behaviour of consumers in mobile and offline channels. The importance of mobile devices increased in the couple of years, because consumers mention that mobile devices become a central part of everyday life that travels everywhere with them to communicate with others, for shopping and searching for information (Salesforce, 2014).

In addition, the possible drivers for research shopping behaviour between mobile channels and offline channels are missing in existing literature and researches. This is an interesting gap in academic literature, namely to research the existence of research shopping behaviour in mobile-offline channels and the possible drivers for this behaviour.

2.8 Academic and managerial contribution

The contribution of this research is that the existence will be approved of research shopping and show rooming behaviour in a multi-channel environment with mobile channels (i.e. mobile applications), non-mobile online channels (i.e. pc or laptop) and offline channels (i.e. retail store). There are several studies about research shopping and show rooming behaviour in a multi-channel environment, whereby there is less research regarding the existence of these phenomena in a multi-channel environment.

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This study will provide more clarification about research shopping and show rooming behaviour in a multi-channel environment with mobile channels.

In addition, possible drivers could have an effect on research shopping and show rooming behaviour in a multi-channel environment. Mainly, drivers which are used in prior research regarding research shopping and show rooming behaviour in a multi-channel environment with non-mobile online and offline channels will be used. These drivers are psychographic and demographic, for example level of education, age and gender.

The insights which would be obtained after this research will be a useful gain for managers in their marketing strategy in a multi-channel environment. Managers would obtain information about the existence of research shopping and show rooming behaviour in a multi-channel environment with mobile channels. Besides that, there will be insights about which factors would influence or have an effect on research shopping and show rooming. Managers will obtain information what drives consumers to search or purchase at a specific channel. So, managers and companies will be able to anticipate on this consumer behaviour. Some specific examples will give clarification about what the possible gain for managers will be.

For example, if time pressure would have a positive effect on research shopping behaviour in multi-channel environment managers could implement this insight in their marketing strategy. This information means that consumers who don’t have enough time for shopping will search for products on mobile channels and purchase products at offline channels like the retail store. When the target group of a company is comparable with the respondents of this research, than the manager could use this information for their multi-channel marketing strategy. This could be done by improving the mobile application on mobile devices and give the possibility to consumers to pick-up their products immediately after ordering it on mobile channels at the retail store.

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Another example is that managers could be that shopping enjoyment has a positive effect on show rooming behaviour.

Consumers who like to shop and search for products at offline channels will purchase their products on mobile channels. So, if the target group of a specific company is mainly show rooming than this company should improve the consumer experience in-store at offline channels.

Consumers who are show rooming are searching for products in the retail store and purchasing the product on mobile channels, the consumer behaviour of these consumers could be influenced with giving good service and a product experience in-store. Besides that, the purchase of the consumer could be influenced by cross-and up sell.

So, the managerial contribution of this study is that the results of this research will give new insights to managers and companies to influence the consumer behaviour of their potential customers. They are able to implement the insights of this research in their multi-channel business strategy.

Thus, the managerial contribution of this research will give retailers more insight about research shopping and show rooming behaviour in a multi-channel environment with mobile channels and the potential drivers which could have an influence on the consumer behaviour.

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37 3. Conceptual framework

In this chapter the researched conceptual framework is introduced with a detailed report of all components of this study. Finding a research gap after a critical evaluation of previous literature, are in this chapter several hypotheses formulated and proposed. In this chapter is the framework of this study addressed.

3.1 The framework and hypothesis development

Figure 3: Conceptual framework Research Shopping and Show rooming in multi-channel environment

Figure 3 provides an overview of the conceptual framework for this study. The purpose is to identify the existence of research shopping and show rooming behaviour in a multi-channel environment with mobile and offline channels. The research question of this study is formulated as: To what extent do consumers engage in research shopping and show rooming

behavior in a multi-channel environment where mobile channels are also available and how

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It is expected that research shopping and show rooming behaviour does exist in a multi-channel environment with mobile and offline multi-channels, because as explained in the literature review it already exists in a multi-channel environment with non-mobile online and offline channels.

In this study is the influence of psychographic and demographic drivers on research shopping and show rooming behaviour in a multi-channel environment researched. The specific psychographic and demographic drivers which are tested are addressed in the hypotheses of this chapter.

In this framework are mobile channels and non-mobile channels addressed to show the big picture in a multi-channel environment, however this framework will only examine mobile and offline channels and not non-mobile channels like the computer. In addition, the searching and purchasing process are figured, whereby the focus will be on these two activities of consumers and not after-sales service. The relationship between searching and purchasing in a multi-channel environment is studied.

As explained in the literature section research shopping and show rooming behaviour are imagined in this framework. Whereby, research shopping is searching on mobile channels and purchasing in the store and show rooming is purchasing on mobile channels and searching for a product at the retail store.

3.2 Existence of research shopping and show rooming in multi-channelling.

As analyzed in the literature review, in order to analyze the existence of research shopping and show rooming, we will take into account two channels, mobile channels (ie. Tablets, smartphones) and offline channels (ie. retail store). One of the main questions of this study is to research if these phenomena exist in a multi-channel environment with mobile and offline channels. In addition, if these phenomena exist than what are the drivers for research shopping and show rooming.

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This main question could be found in the central part of figure 3, The X variables are variables for show rooming and the triangle stands for the research shopping process.

Analysis found out that research shopping and show rooming behaviour exists in a multi-channel environment with non-mobile multi-channels and offline multi-channels (Konus¸ Verhoef, Neslin, 2008; Verhoef, Neslin, Vroomen, 2007).

In addition, it is interesting to know why consumers are research shopping in mobile- and offline channels. The drivers for this consumer behaviour will be taken into account in the upcoming sections of this chapter.

3.2.1 Expected psychographic relationships and influences

In this paragraph there will be several hypotheses and expectations discussed whose are tested in this research. As mentioned in the last chapter there is research shopping and show rooming behaviour in a multi-channel environment with non-mobile online and offline channels (Verhoef, Neslin, Vroomen, 2007; Morrison, 2014). One of the main goals of this research is to research the existence of research shopping and show rooming behaviour in a multi-channel environment with mobile channels, because there is much research done about this behaviour in a multi-channel environment with non-mobile online and offline channels but not with mobile channels included. The expectation is with the increasing importance and use of mobile devices there will be research shopping and show rooming behaviour in this context (Marketingfacts, 2015; Salesforce, 2014). Hereby, these expectations are addressed:

Expectation 1: The expectation is that consumers search for products on mobile channels and purchase these products in offline channels, which means research shopping behaviour in mobile-to-offline channels in a multi-channel environment.

The impact of mobile shopping channels on research shopping and show rooming behaviour

MASTER THESIS