Insight into Dubai’s Generation Y Online Shopping Behavior: Exploring the Limitations of the Technology Acceptance Model with the Digital Natives
This research paper aims to expand the theory of Technology Acceptance Model (TAM) to study Dubai’s Generation Y’s intention to shop online. The paper presents the results of a series of interviews and explores the relevance of the constructs suggested by this theory for online shopping behaviour of this segment in Dubai. The findings of this research show various similarities and contrasts with previous studies using Technology Acceptance Model in the context of E-Commerce. Similarities include participants agreeing that usefulness of online shopping has a major role in their intention to shop online. In contrast with previous studies, where Ease-of-Use and Enjoyment are major contributors to consumer’s intention to shop online,our study shows that Generation Y participants were not concerned about Ease-of-Use or Enjoyment at all. In fact, the interviewee responses revealed a need for adding newer factors to the framework, situational factors such as consumers not being a debit or credit card holder and locational factors that suggest how having shopping malls within the reach of consumer’s can also affect their online shopping intentions.
Keywords: E-Commerce, Online Shopping, Dubai, Technology Acceptance Model
E-commerce is an extensive idea with various definitions based on the context and perspective. Electronic Commerce Association defines E-commerce as “covering any form of business that is executed, using any information and communication technology”. García-Sánchez et al. (2005, p.223) said E-commerce offers vast opportunities to improve business functionality and business communication between the business and the buyer as well the business and the supplier. As customers gain experience in the field of online shopping, the growth of E-commerce as a medium of shopping becomes more evident (Gefen et al., 2003; Yu et al., 2005; Hsu et al., 2007). The studies by Gefen et al. (2003), Yu et al. (2005) and Hsu et al. (2007) state that in retail business, the motivational factors that lead a potential customer to make his or her purchasing decision is not the same as a regular customer. The level of Internet penetration in the UAE is among the highest in the world, with 93.2% of its population able to connect to the Internet (Internet World Stats, 2015). Consumers worldwide are increasingly using the internet to socialise, search for information, co-create content and also to purchase products and services (Bargh and McKenna, 2004; Laing et al., 2009). The potential of E-commerce in the UAE is expected to increase in the upcoming years, with estimates valuing the market at $10 billion (Dh36.7 billion) (Gulf News, 2014). As the internet is becoming an integrated part of consumer’s lives, to understand what motivates consumers in UAE to buy online is of great importance for marketing practitioners and scholars in the Middle East.
Demographic factors such as age of a consumer can be of significance when it comes to understanding their intention to shop online. The youth generation now-a-days have access to the internet no matter where they are in the world; at home, school, library and even public transports have wireless internet facilities. The internet has the same importance to Generation Y as television did to Generation X (Valentine and Powers , 2013). The business dictionary describes Generation Y as people born between the years 1980 to 2000. Wood (2002) states that Generation Y likes to use the technology to find product information and compare them. Young adults in United States in the year 2011 spend approximately $209 billion online (Foshee, 2010). Due to this characteristic of the current generation, market researchers are looking to penetrate the online retailing business.
This study is focused on Dubai, United Arab Emirates which ranks 3rd best for business in the world (Future Brands, 2006). GCC aimed to be home to five out of eight of the world’s largest mall (Thompson, 2006; Retail ME, 2006). UAE has the highest average daily private consumption spending in the Arab world with US$26.80 whereas the other Arab nations spend on average US$3.50 (Kawach, 2004). Since Dubai has proclaimed itself to be home of luxury brands the resident spending must rise to match the living standards of the country’s vision. There has been an observation made that shows that during the summer season due to harsh weather conditions most expatriates leave for their home countries and this leads to low-retail month. Dubai, with its Dubai Summer Surprises which is a ten week shopping extravaganza, has tried to revive the downfall of retail market during that season. Dubai is also the host of Dubai Shopping Festival during which tourism contribution increases, like in 2006 the festival attracted over 3.6 million tourists that contributed to the overall GDP by 8% (Gulf News, 2007). Dubai is spearheading the retail industry and hence, this research has aimed to focus on Dubai’s Generation Y shopping online.
The aim of the study is to expand on existing literature of E-commerce by understanding various factors that influence the intention of Dubai’s Generation Y shopping online. The paper uses as theoretical underpinning the Technology Acceptance Model (TAM) in a context that has been understudied by other previous studies. Thus, this research aims to explore the relationships suggested by TAM and its identified factors along with discovering new ones in relation to ‘Perceived Usefulness’, ‘Perceived Ease-of-Use’ and ‘Perceived Enjoyment’ that play a role in consumer’s intention to shop online. Next the paper will explore how and why these factors are of importance to the consumers and examine if there is prevalence of one factor over others on Generation Y intentions to shop online. Furthermore, the paper will study consumer’s involvement with the internet and investigate upon their awareness towards internet safety in relation to E-commerce. Lastly, the paper will contribute to management practice by getting consumer’s views on how they foresee the future of E-commerce along with their involvement towards online shopping.
Technology Acceptance Model (TAM)
There are several models that explore the factor affecting the acceptance of technology by consumers. Some of the theoretical frameworks that are used to study the acceptance and usage behavior include the Theory of Reasoned Action by Ajzen and Fishbein (1980), the Technology Acceptance Model by Davis, Bagozzi and Warshaw (1989), Innovation Diffusion Theory by Agarwal and Prasad (1997) and the Decomposed Theory of Planned Behavior by Taylor and Todd (1995). One of the popular frameworks related to technology acceptance and usage is the Technology Acceptance Model (TAM), originally proposed by Davis in 1986. TAM is a theoretical model that helps to explain and predict user behavior of information technology (Legris, Ingham, &Collerette, 2003). According to Ajzen and Fishbein (1980), TAM is considered to be an extension to the TRA model. Several studies have replicated Davis’ original study (Davis, 1989) providing empirical evidence on the relationships between Perceived Usefulness, Ease-of-Use and System Use (Adams, Nelson & Todd 1992; Davis 1989; Hendrickson, Massey &Cronan 1993; Segars& Grover 1993; Subramanian 1994; Szajna 1994).
The original Model
The Technology Acceptance Model was developed by Davis (1989), the theory of this framework states that the success of a certain system can be determined by the consumer’s acceptance towards the system – which is measured by three factors: perceived usefulness, perceived ease of use and attitude towards usage. The framework states that a consumer’s perception about the usefulness and ease of use of the system will result in intention to use or not use the system (Davis, et al., 1989; Nov & Ye, 2008). TAM acts as a stepping stone to understand how external factors can have an impact on a person’s intention and attitude towards technology. The Figure 1 shown below is the original Technological Acceptance Model by Davis from the year 1989 (Perea y Monsuwé, llaert de Ruyter, 2004).
To determine the extent to which a consumer believes in using the internet as a tool to shop is the definition of “usefulness” in this framework for this context (Park, Nam and Cha, 2011). Usefulness being one of the main factors behind a consumer’s intention to shop online, researchers agrees that usefulness is influenced by “ease of use” which means if the consumer feels that online shopping is easier in comparison to physically going to the retail store (Venkatesh, 2000; Dabholkar, 1996; Davis et al., 1989). Hence it can be proven the easier the website to navigate the more useful it can be and thus influencing consumer’s decision to purchase online or not.
Ease of Use
The factor Ease of Use from TAM is defined to be the consumer’s perception that using the internet for online shopping will be effortless (Davis, 1989). Applying the same to this research, ease of use means the consumer can used the internet with minimum effort in order to place orders for their desired products or services. In comparison with Usefulness which refers to consumer’s perception of the outcome of the E-commerce experience being useful. In other words, usefulness is the effectiveness of online shopping and ease of use is how easy the medium of this process is; which is the internet. Ease of use has both direct and indirect effect on a consumer’s intention towards online shopping. If the technology is effortless and easy to use, it is more likely that the customer will have higher intention to use this medium to their advantage.
Additions to the TAM Model
Perea y Monsuwé, Dellaert and de Ruyter in the year 2004, discussed in their paper a framework built by previous research on customers’ acceptance of self-service technology and online shopping methods. Davis (1993) initially stated and this research later suggested and that consumer’s attitude towards online shopping was based upon online shopping features. Ease of use and usefulness can be functional perception of consumers that can be considered to be features of e-commerce. There could also be emotional and hedonic perception such as enjoying the shopping experience. By combining these features Perea y Monsuwé, Dellaert and de Ruyter have come up with the framework for online shopping. In order to have a comprehensive understanding of customers’ intentions to shop over the internet and their attitude towards the same, Perea y Monsuwé, Dellaert and de Ruyter (2004) built a framework (refer to Figure 2) that will be discussed in this section of the paper.
Recently added to the Technology Acceptance Model is the “Enjoyment” factor (refer to Figure 2). Therefore, both utilitarian and hedonic factors of consumer attitude are taken into consideration in the TAM. Researchers claim that consumer’s attitude has a strong and direct impact on consumer’s intentions to use the new technology (Bobbitt and Dabholkar, 2001; Davis, 1993) or in the case of this research intention to use e-commerce as a means for shopping habit
Along with the evidence for the importance of external factors of motivation for internet usage, there is significant research that states the importance of basic motivation (Davis et al., 1992; Venkatesh and Speier, 1999, 2000). Enjoyment is the factor from the TAM framework that best relates to the basic motivation for online shopping. Enjoyment or basic motivation is derived from when a consumer appreciates and experience (Holbrook, 1994). Enjoyment comes from the fun and entertainment of the experience while using the internet for shopping rather than just getting the product. Often the purchasing of the product may also be related to the shopping experience and therefore the enjoyment factor reflects upon a customer’s perception towards the potential enjoyment of online shopping. Childers et al. (2001) discovered that enjoyment is a strong predictor of attitude towards a consumer’s intention to shop online. If consumers enjoy the E-commerce experience and find it entertaining then they show a positive attitude towards using and adapting to Internet as a shopping tool. Within the Enjoyment concept of the TAM framework, researchers pinpoint three underlying factors that make up the entertainment perception and they are ‘Escapism’, ‘pleasure’ and ‘arousal’ (Menon and Kahn, 2002; Mathwick et al., 2001). Escapism refers to enjoyment a consumer may experience by engaging in activities that are captivating to such level that it provides a feeling of escape from the daily tasks of the person using the technology. Pleasure relates to the amount to which the person using the technology feels good and satisfied in this case towards using internet to shop online. Lastly, arousal is about the degree to which a consumer feels stimulate and alert during his or her E-commerce experience. If the consumer has a pleasant experience that will have a carryover consequence on his or her next experience encountered (Menon and Kahn, 2002).
As this study aims to look at Generation Y within Dubai hence purposive sampling is used. Purposive sampling refers to selecting participants in groups according to preselected criteria that is relevant to the study such as selecting participants within the age of 18-30 as that would be under the Generation Y category. The interview questions were formulated based on the factors identified in TAM that were discussed in the literature review and furthermore guided by recommendations from other similar studies. Pilot study was conducted with other colleagues to test the interview questions. Once the interview questions were tested a few alterations were made before the final data collection. Final interviews were conducted among 20 students from within Heriot-Watt University Dubai. The data collected was analyzed using thematic analysis. Thematic analysis refers to identifying common problems that relapse and the main theme that rises from all the views of people that has been collected (Lewis and Thornhill, 2009).
Consumer Perceived Usefulness
Perceived usefulness was considered to be of high importance to the participants that were interviewed. Participants that are frequent users of E-commerce have all agreed that it is a useful tool in their life and that they agree to the fact that it is faster than visiting a physical retail store to purchase a product. Participant 3 who is a frequent online shopper from local websites states “I’m a lazy person; I hate going to shopping malls and deciding what I want. In that sense online shopping is very convenient to me because all I have to do is click and done. I am a bit of a penny-pinching kind of person as well so if anything online shopping is cost efficient for me. Overall, I believe it saves time and is effective in terms of finding the best deal after comparing the product I am looking for from various sites without physically going to the stores”. Participant 4 agrees that it is very useful because it requires very little travelling and time. As a 23 year old photographer, he says that online shopping is very useful to him because it doesn’t require him to leave the house to buy something. He also adds, “Since I work as a photographer I often need to buy camera accessories and equipment for work purposes and often need them in a short period of time, to me travelling to a mall and getting them before my work schedule starts is difficult. With online shopping I am able to get them with a click of a button and they only take a day to deliver which is pretty convenient to me. I think it is pretty quick and effective. I would also say that it is productive 99% of the time”.
Among the participants who are not frequent online shopper but have used the services of online shopping a few times have all agreed that online shopping is a useful to them in some form or the other. Overall findings in relation to the perceived usefulness suggest majority of the consumers seem to agree that online shopping is a useful tool whether they shop online regularly or not. The next section will look at the findings of perceived ease of use of E-commerce.
Consumer Perceived Ease of Use
All of the 20 interview participants agreed that online shopping is easy to do specially because they can access it from their comfort zones and they consider that to be very convenient. Convenience was a noticeable term being used by majority of the responses for this section of the interview. Participant 4 pointed out that to him it is an easy task keeping in mind his generation but he assumes it’s not the case for older generations as they might have a harder time learning how to use the technology. Convenience was a noticeable term being used by majority of the responses for this section of the interview. Participant 4 pointed out that to him it is an easy task keeping in mind his generation but he assumes it’s not the case for older generations as they might have a harder time learning how to use the technology.
The negative response noticed respondents only found it ‘inconvenient’ when they did not own a credit card and that caused them the trouble of borrowing credit card from another family member or led them to not shop online at all. Participant 15 said, “I do it easy but it depends on the stores because some online stores only accept payment via credit cards which I find difficult as I don’t own a credit card myself and it’s a hassle to use someone else’s but stores that have cash on delivery options, I find that very useful and easy”. She also added that besides that factor online shopping is very good in terms of price comparison from her own comfort zone that she finds to be helpful. She also added, “Often at times when I shop online I feel like I have a lot more time to decide if I really want this product or not in comparison to being at the physical store where my buying behavior would be a little more impulsive. So overall I think shopping online makes me think about my purchase decision more deeply and I feel more confident about my decisions”. As a whole, participants were noted to agree that online shopping is easy to do in terms of its process but they do not give a lot importance to this aspect. To the interviewees, when asked to rate between Usefulness and Ease-of-Use, Usefulness was still more important than ease of use.
Consumer Perceived Enjoyment
Interviewees’ perceived Enjoyment to be that factor that least mattered to them when they thought of online shopping. Even though some of the interview partakers agreed online shopping is entertaining or could be entertaining, no one mentioned Enjoyment as their core factor that aids their intention to shop online and in fact it was voted by everyone to be the least important. Participant 3 stated, “Online shopping can be entertaining. If I didn’t have a mall next to my house, which is not the case since I live in Dubai, then I guess I would appreciate and enjoy online shopping more. In general I am not a shopaholic so I don’t think online shopping gives me a break from my day-to-day life”.
Nonetheless, positive responses included response by participant 2 who mentioned online shopping is ‘best’ when her mood is off or when she is bored. Participant 20 said, “Yes, very much! Because after I place an order (which itself is pretty fascinating to me), I look forward to the delivery. The wait itself is very exciting”. On the other hand, Participant 17 said to him the entertainment of online shopping was a diminishing factor, he adds that as he gets more frequent with the service he feels less excited about the process but upon being asked how retailers can continue to keep the excitement alive? He said, “For example I am buying a product, I would like to receive a clear flow of transaction interaction from start of my purchase to the end, so that would be starting from going through the website to select the product till it reaches my hands and I would like to get text messages with steps such as ‘Your order has been packed’, ‘Your order has been shipped’ or ‘Your order is on the way and should be arriving in a day’ etc. Another thing that could be exciting would be to be able to have live chat options with the seller”. Among other participants who mentioned they do not find online shopping to be entertaining, some suggested retailers to have video or game content involved in their websites to create more interaction between the product, brand and the buyer. Overall, majority of the respondents either said they do not feel entertained by online shopping because they find it to be more recreational to go to a mall and shop and some respondents said shopping in general do not fascinate them.
Consumer’s Involvement with the Internet
Among 20 interview partakers, 10 responded ‘yes’ they do shop online on a frequent level, 9 said they are not frequent but they have used the E-commerce services a few times and 1 said they have never shopping online and reason for which was they do not own a credit card to do so. Within the participants who are frequent and non-frequent online shoppers 14 of them stated they shop mostly from local websites such as souq.com, dubizzle.com, jadupadu.com, namshi.com and markavip.com etc. and 2 of them said they only use international websites that delivers products from US, UK and Italy and the remaining said they use both local and international websites for their online shopping purposes. Graph 1 shows the kind of items they normally purchase over the internet. It is evident from this chart that items that are low involvement are popular over the internet compared to items that are of high involvement such as clothing due to lack of tangibility of the product.
Consumer Perceived Risks
Participants of the study were asked how they judge the safety of a retail website and if it generally based on their ‘gut feeling’. A large number of them stated that they find a website more trustworthy if they have heard about it from a friend or a colleague. Word of mouth or popularity of website was considered to be main indicators of a safe website according to the interviewees. Some participants mentioned other indicators such as PayPal, e-trust verification signs or logos and visa secured logo etc. Participant 7 mentioned that he often googles the company name to find reviews that state the website is legitimate. Overall, majority of the responses revolved around word of mouth and popularity and customer reviews of the website. The majority interview partakers also agreed that they believe brand image places a role in their assumption for safety of a website. Responses in relation to their views on customer review were mixed, some said they rely heavily on them and some said they do not believe them. For example, Participant 4 said “No. I work in social media and I know that buyer reviews can be bought off”. Participant 15 and 20 spoke along the same lines that they do glance at the customer reviews but they do not make their purchasing decision based on that. Whereas, Over all responses from this section shows how consumers are well aware of what kind of risks they may face in the E-commerce process but not all of them are aware of how to protect themselves against these risks.
Consumer Perceived Future of E-commerce
19 out of 20 interviewees agreed that E-commerce is a booming industry and they perceive a bright future for it and see themselves being more involved with it in the future. Participant 2 said, “In the future of course I will be more involved. As technology advances online shopping will become better”. Even participants that are not frequent shoppers online and state that the do not find it to be useful tool in their lives agree that they see themselves being more involved with E-commerce in the future. Some participants said they feel online retailers in Dubai need to create more awareness and market themselves more. Participant 15 said “I think I will be more involved because I am an advocate of online shopping because according to me if I get good discounts then it is completely worth it. In the part of the world where I am (Dubai), it’s not that popular and in order to be more popular they need to make the sites more reliable and market themselves well too”. Among the participants that said they see themselves being less involved in the future reason by saying they prefer the recreation they get by visiting a shopping mall and since malls are conveniently located at this part of the world, this reason is difficult to argue with.
DISCUSSION AND CONCLUSION
The evidence in this study suggests some similarities and several differences with the traditional TAM model. Thus the following section expands on the implications of these findings with the existing literature.
Contribution to TAM
As discussed earlier that Davis (1993) stated andPerea y Monsuwe, Dellaert and de Ruyter (2014) agreed that consumer’s attitude towards online shopping was based on online shopping features such as ease of use, usefulness and enjoyment. The findings of this study show similarity with their claims nonetheless showcases newer elements that attract a consumer to shop online. The participants stated that they give a lot of importance to Word of Mouth when it comes to online shopping. Many of them mentioned they are more likely to shop at a branded online retailing store over a non-branded one because they relate popularity with safety; they assume – bigger the brand safer the website. Discussing the hedonic factor, the findings suggest that majority of the people rated Enjoyment to be the least important factor to them in comparison to Perceived Usefulness and Ease of use. They say that if they find the service useful then the enjoyment factor does not matter to them. On the other hand, to the participants hedonic factor of enjoyment did matter, they stated that this is the element online retailers need to improve upon because offline retailers can give them pleasure which online retailers don’t and they also believe online retailers can’t. Hence they suggest online shopping websites come up with innovations to catch their interest that would show them even if they cannot give them the shopping experience they get offline they can still provide them with something unique and attractive.
Overall, the findings suggest in order for TAM framework to be able to be more accurate in understanding perception of participants, more elements need to be tested and added to the model besides the original elements of usefulness and ease of use. As this study shows Ease of Use is not given much importance by the Generation Y users, there should be other factors included to test this framework, situational factors such as consumers not being a debit or credit card holder and locational factors that suggest how having shopping malls within the reach of consumer’s can also affect their online shopping intentions. As stated earlier, researchers have agreed that usefulness is influenced by ease of use; this is not the case as discovered by this study. It was noticed that all the participants perceived online shopping to be easy to use but did not necessarily agree that it is useful to them. Therefore as the findings of various researchers (Venkatesh, 2000; Dabholkar, 1996; Davis et al., 1989) suggested that easier the website is to navigate the more useful it can be, this is not what participants of this study agree with.
The findings of this study states the main reason why Generation Y of Dubai is not shopping online is because they do not own a credit card or debit card and to borrow a family member’s card is of hassle to them. Among other factors mentioned, a high number of participants agreed with the fact that because in Dubai shopping malls are conveniently located they are able to just walk to one and get what they need which does not involve waiting for a few working days for the delivery to arrive.
The primary purpose of this research was to provide a deeper insight into the factors that affected online shopping intention of Generation Y. This paper addressed the gap in existing literature of E-commerce and TAM framework in relation to consumer’s intention with online shopping. Findings have shown similarities with previous studies but also found differences with pas researchers which are probably due to geographical factor of conducting the study in Dubai, United Arab Emirates. A study by Mansori, Liat and Shan (2012) has observed that the generation gap between Generation X and Y had a moderating effect on the relationships between perceived benefit, website characteristics and online shopping intention. Therefore, future investigation is needed to expand on this study as it was restricted to a particular age group (Generation Y) with a non-representative number of respondents. More studies can be conducted to specific target areas of E-commerce that looks at a chosen market such as clothing or electronics as consumer’s intention may be based on how much involvement is required by the product before purchase. For instance, a consumer that wants to by electronic products may read the features and base their decision on that whereas items that require high involvement such as clothing may not be based on product description as consumers feel they need to authenticate size and quality of the product (Prijt, 2010). There could also be gender specific research conducted that shows a correlation effect gender has on consumer’s intention of online shopping as this study showed male participants of the interview stated that they see themselves to be more involved with online shopping as technology advances.
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Objective 1: To contribute to the theory of Technology Acceptance Model by exploring identified factors along with discovering new ones specifically in relation to ‘perceived usefulness’, ‘perceived ease of use’ and ‘enjoyment’ that play a role in consumer’s intention to shop online
Objective 2: To explore how and why these factors are of importance to the consumers
Questions were formed with the help of journal E-shopping an Analysis of the Technology Acceptance Model and What drives customers to shop online – A literature review.
Do you find online shopping to me a useful tool in your life? How so or Why not?
- Is it quicker?
- Do you believe online shopping has better performance? (Eg: Saves time and money)
- Do you find it to be more productive? (Finding the right information and making purchase decisions in short period of time)
- Is it effective? (Finding the best deals)
- Do you think the online retail website offers good amount of information to aid your purchase decision?
Perceived ease of use:
Do you find online shopping easy to do? How? Why not?
- Do you think you can easily find what you are looking for from the comfort of anywhere?
- Are you able to compare products easily?
- Do you think online retailers are more flexible to deal with?
- Is it easy to look at many different options before making a purchase decision?
Do you find online shopping to be entertaining? Can you elaborate with an example? Can you tell me what you think would make it entertaining?
- Escapism: Do you feel like online shopping gives you a break from your day to day life?
- Pleasure: Are you satisfied/ happy with online shopping? Would you consider shopping for items that you usually don’t shop for?
- Arousal: Do you feel active/ alert while shopping online? Do you feel excited when you place an order?
Objective 3: To determine one core factor that influences customer’s intention the most in terms of online shopping
Which of these factors we discussed so far would be the most important to you in terms of your intention to shop online and why?
Which would be the least important?
Objective 4: To understand consumer’s involvement with the internet and awareness of internet safety
You were asked to predict how many times a day you use your smart phone; and your guess was?
*Give them real score* – How do you feel about your real score?
What do you feel are the some of the risks involved with shopping online?
Are you aware of how to protect yourself against these risks? Can you give me a few examples?
When you think about safety in relation to shopping online:
- Do you judge how a website looks based on your ‘gut feeling’?
- Are you aware of verified payment methods such as ‘paypal’ or ‘visa’?
- Are you aware of features such as ‘https’ and the green padlock?
- Do you feel brand image plays a role in your assumption for safety of the website? For example do you think a big brand website is safer to shop from?
- Do you rely on reviews written by other buyers? Why? Why not?
Objective 5: To contribute to management practice by getting consumer’s views on how they foresee the future of E-commerce along with their involvement towards internet shopping
What are your thoughts on future of e-commerce? Do you see yourself being more involved or less involved with online shopping in the future? Why?
What do you think online retailers need to improve upon to motivate you to shoponline?
Would you like to add any further comments to all that was discussed?