Influence of Social Media on online shopping

experience


A case study on How Social media networking influences online shopping
in UK and how Facebook can be used to develop an online platform to sell
international calling cards and MVNO top up vouchers specially o2 calling
card and o2 international sim




















Influences of social media on online shopping experiences




Table of Contents
Introduction: ............................................................................................................................... 3
Research Aim: ............................................................................................................................ 4
Objective and Hypothesis Development: ................................................................................... 4
Research Motivation: ................................................................................................................. 5
Limitation of the research: ......................................................................................................... 6
Literature review: ....................................................................................................................... 7
Methodology: ........................................................................................................................... 12
Research approach: .............................................................................................................. 12
Sampling: ............................................................................................................................. 12
Research instruments: .......................................................................................................... 12
Data Collection method:....................................................................................................... 13
Data analysis: ....................................................................................................................... 13
Ethical Consideration: .......................................................................................................... 13
Time Plan: ............................................................................................................................ 14
Conclusion: .............................................................................................................................. 14
References: ............................................................................................................................... 15



Influences of social media on online shopping experiences
Introduction:
With the growth of internet technology- web site, search engine and social media, internet
users are also growing day by day. Innovation in internet marketing by the organization and
the interaction among friends, family and community people through social media
networking makes it more convenient for consumer to shop online.

In physical shopping environment, most of the shoppers share the product experiences in
order to make purchase decisions. This kind of sharing of experiences is missing in modern
online shopping environment. But nowadays, organizations using social media website like
Facebook to facilitate customer to share their experiences. Some of the organization even has
started to keep option for product review, quality review, delivery review by customers so
that future customer can take decisions. This research therefore will try to investigate this
issue how use of social media networking helps bring customer confidence and help
organization grow its online sales.

UK is the most multicultural country in the whole world with people of different ethnicities,
colours, religion and languages. National statistics shows that with the course of time, present
immigrant minority will grow in such an extent that white British will become minority in
certain period of time. Most of the immigrant people need to communicate with their relative
back home. Therefore, they use cheap international calling cards, Mobile virtual network
provider sis like Lebara, Lyca, Now mobile, Vectone etc. User of these MVNO sims need to
buy top up voucher physically from retail store every now and then. This research aims to
develop an online platform to give better shopping experience through the use of social media
network like Facebook.

Influences of social media on online shopping experiences
Research Aim:
How Social media networking influences online shopping in UK and how Facebook can be
used to develop an online platform to sell international calling cards and MVNO top up
vouchers specially o2 calling card and o2 international sim.
Objective and Hypothesis Development:
To find out the solution of the above mentioned problem, it is necessary to develop
hypothesis and compare these hypothesis with primary data collection result.

H1: Social Media and its different plug in and application helps organization reach the new
customer faster than any other internet technology.
H1a: Lottery based application helps recruit new member in Facebook.
H2a: Social media plug in like Facebook like button and group share option help increase
members in Facebook page.
H2: Use of social media brings confidence on customer and minimise product quality
mismatch risk.
H3: Use of social media networks help reduce financial risk
H3a: Use of social media helps build brand identity of an organization
H3b: Use of social media gives confidence to consumer to provide bank details.
H4: Use of Facebook to build an online platform to sell international calling card and MVNO
voucher will get most of the user to buy online.
H5: Use of Facebook is the best medium to reach ethnic minority to sell both O2
international sim and calling card.

Influences of social media on online shopping experiences
Research Motivation:
Facebook has become the part and parcel of most of the internet users life style. With the
passage of time nowadays people get hardly any time for social interaction. Therefore, people
use Facebook as an alternative to stay connected with the friends and family. In the near
future, hardly any people will be left from using this social media website. The dynamic
nature of Facebook enabled users to share any information within a second crossing country,
border or any obstacles within. Most of the organizations now have a Facebook fan page,
group or application in order to interact with customers to give better customer service, to
take feedback from customer or to launch new promotional activities to recruit new
customers.

As UK is becoming more multicultural day by day, ethnic minority based market is growing
larger. Ethnic minority market is more than billion pound business now. VOIP (Voice over
internet protocol) use to make international calls by different means like calling card and
MVNO (Mobile virtual network provider) is more than million pound businesses now.

Main network like o2, Vodafone and 3g now understands this phenomenon and want to get
into this market. Recent launch of o2 calling card, o2 international mobile sim and Vodafone
international sim proves that this segment of market is growing every day and there is huge
potentiality of business in this sector.

Author has worked with some MVNO organization such as Now mobile and Lyca mobile,
calling card company such as Simplecall and mobile sim distribution company such as core
communication (dialacode) and GK telecom in UK.

Influences of social media on online shopping experiences
Author observed that o2 being a British telecommunication company is doing advertisement
and promotion with British mind set where its customer segment has different ethnic mindset
of its home country. Therefore author feel that even though o2 is far better company than any
other MVNO organization, it has failed to develop its product and advertisement and
distribution channel to reach ethnic minority efficiently.

This research will definitely add value to o2 to understand ethnic mindset and hence to
develop an alternative distribution channel through social media network such as Facebook.

Limitation of the research:
This research aims to develop a standard product for all ethnic minorities. But, as author is a
student has got the limited budget to spend to carry out this research. Author being a member
of Bangladeshi ethnic minority has mostly access to this ethnic minority. Therefore, data will
be collected mainly from this ethnic minority. As a result, outcome of this research may not
be appropriate for the other ethnic minorities.



Influences of social media on online shopping experiences
Literature review:
This research will be consists of a literature review where researcher will bring out all the
comments, theories, opinions, debate which support as well as contradict with the proposed
research problem.

Horrigan, John (2008), associate director of Pew internet-an America based research centre in
its research shows that

1. American people have embraced internet shopping for the convenience and time saving
2. Most of the American still have concern and doubt while using their credit or debit card
information online.
3. Most of the online shoppers have shown frustration because of lack of information,
confused by information or overwhelmed by excessive irrelevant websites about the product
they want to buy.
4. Most of the people will buy online if they can trust the e-commerce environment more.
5. Revenue for online shopping has growing in a very fast rate in America since 2000.
6. More than 95% internet user at least research online before buying any product and about
25% successfully do the online shopping.
7. The young generation is most likely to shop online than older people.
8. White English speaking Americans are most likely to buy online than black Hispanic and
English speaking Americans.
9. Improving online shoppers comfort and security level to send their personal information
online will bring bigger payoff to the online industry.

These findings will definitely add value to the current research while collecting primary data
for UK market.

Haubl, G. & Trifts,V. (2000) who teach in faculty of business university of Alberta, Canada
has shown on their research that while shopping online consumers research online which can
be classified as two stage processes:
1. In the first stage, consumers screen a large set of alternative products and use of
recommendation agent (RA) helps consumers efficiently screen potential alternatives and
then
Influences of social media on online shopping experiences
2. An in depth study of selected products to compare the price and quality before making
final purchase decision. A comparison matrix (CM) designed to help compare selected
alternatives helps consumer in second stage in depth comparison of the products.

Their research shows that a combination of use of RA and CM helps consumer a quality and
efficient purchase decision which reduces time wastage and increases comfort level of online
shopper. Findings of this research will help this research on how to use both RA and CM
factor while developing online shopping platform for o2 international calling card and o2
international sim by using Facebook. As Facebook is the best medium to get RA but new
strategy need to make to build CM in facebook.

Senecal, S.et al (2003) has researched on a very interesting and different topic. Their main
concentration was to analyse click stream how consumers browse page to page and how
much time they spent and the processes consumer follow depending on product
recommendation by others, This research shows that online recommendation can be
classified into three main broader categories;
1. Other consumers (Friends and family)
2. Human expert (Sales man, independent expert) and
3. Expert system to support consumer decision making process.

In their click stream analysis they have found that consumers who consult product
recommendation has to go through a more complex shopping behaviour than who do not
consult and who consult but do not follow the recommendation. In order to minimize the
complexity of the consumers who follow product recommendation, an e-commerce should
have facility to navigate between product recommendation and other information about the
product because consumers browse through these pages more frequently.

Hasslinger, A. Et al (2007) in their dissertation titled Consumer behaviour in online
shopping. This research was done to find out online shopping patter of students to buy
books and CD online. Researchers have found that price, convenience and trust are the main
three factors to consider for online shopping. Online shopping gives more chances to
compare price online than offline environment. It brings convenience in the sense that if any
one searching for any sophisticated product with exclusive features it may be difficult find
online and easy search online. Trust is the vital element why people do not want to shop
Influences of social media on online shopping experiences
online. They have suggested that the factor trust mainly depend on three attributes; perception
of safety, trust in the internet retailer and trust in the internet as retail shopping.
Researchers have found three different set of consumers in their research.
1. High spenders: This segment is of smaller percentage that spent a lot online but is not
influenced by any kinds of recommendation
2. Price Easers: This segment of consumer shop online to get the lowest price while buying
books. This is the biggest group in three segments. Consumers are affected by friend
recommendation before shopping online.
3. Bargain Seeker: This segment is the same size of high spenders but highly price
sensitive. They browse online mainly for price comparison. Trust is the second important
factor of this segment hence they prefer shopping offline than online. Researcher have
recommended that in order to attract student for online shopping a retailer should offer
Discounted price
A trustworthy retailer
Quick and easy transaction.

Schneider, C. (Undated), a teacher of Washington state university has analysed online
shopping from different angle. His paper analyzed the issue how temporal proximity
influences impulses online shopping behaviour. His research was tested against two different
hypothesises;

1. First hypothesis shows that if there is any expectation of future benefit, consumer will wait
to take advantage of it.
2. But when temporal proximity is increased meaning when there is an offer (better price and
quality) when bought instantly or within a shorter period of time, consumer are most likely to
forget future benefit and act instantly to conclude the purchase.

Kanokwan A. & Okada, H.(1993) from Japan has researched on Japanese consumers life
style and online shopping behaviours. Their findings slightly contradict with finding of
similar research on other countries. Such as
1. Spending much time online does not mean a consumer most likely to shop online.
2. Consumers with innovative lifestyle perceived more risk to online shopping.
3. Only the price sensitive consumers are most likely to shop online regardless the perceived
risk of online shopping.
Influences of social media on online shopping experiences
Research shows that people familiar with internet research online when they intend to buy
any product. A good percentage of them do not conclude the purchase rather prefer to visit
the store and purchase physically. Once, any internet user hits the organizations website and
then move to other sites, organization has hardly any chance to have personal relationship
with the visitor in future. But in social media networking organization not only keep
continuous link with the first visitor but may even influence that visitor to invite his friends
and family by alluring him with rewards through the use of social media tools and
application.

Consumer can browse for varieties and options; compare quality and price; saves time and
transport cost with online shopping. Even with so many benefits, customers tend to avoid
online purchase mainly for two risks; quality mismatch risk and financial and personal
information misuse risk. Quality mismatch risk comes from the fact that online customer
misses the experience of touch, see and feel like traditional physical shopping. Even if this
risk is ensured by money back or product returned guarantee, customer may feel insecure to
share personal and bank account details with retailing organization. But with the other
customers product review and recommendation, prospective customer may have confidence
on the retailer to shop online.

With the passage of time, new ideas and internet tools coming in; to ease internet shopping as
well as the tricks to misuse those tools to misguide customers are increasing. Retailers may
find paid people for false reviews and recommendation. Therefore, customers may get
confused and less confident to shop online. But in social media where people are linked up
with known faces, reviews and recommendation from friends in social media may help
overcome all the above risks, both quality and financial risk to take the final decision of
purchasing online.

Consumers want to win in every shopping by paying less for greater value. Therefore, no
matter what is the price, online customer will search as much as possible to find the best price
and quality and so may go to other web sites and will forgot to come back. They may even
decide to change the mind and visit local stores from other organization for better options or
wait for new arrival or price cut. Therefore coupon or discount code with time limit may have
impulse on customers mind to purchase online on the spot. And this discount code is updated
Influences of social media on online shopping experiences
more easily on social media. With the help of social media may have influences on increasing
conversion rate from being visitor to consumer?

Therefore, it is important for organization to research on this issue. The result of the research
will help innovates new tools and technique on social media to recruit new customer and
increase conversion rates.

Trust is the vital element before customer pay online to a specific retailer. Here brand identity
plays an important role to have confidence and trust from customer. If the organization does
not have a strong brand identity, then use of social media like Facebook may help
organization to buy brand identity and bring confidence of customer before customer click on
final check out and use payment gateway from these social media networks. Therefore,
Social media may help an organization reduce financial risk of customer by influencing brand
identity of the social media like Facebook.



Influences of social media on online shopping experiences
Methodology:
Academic research is done to add knowledge to the existing literature. In order to do that
researcher should have previous knowledge on the issue, find all related existing researches
and findings on the subject matter which works as the foundation for the future research.
Research approach:
There are mainly two research approaches for data collection method; Inductive and
Deductive. In inductive approach researcher try to establish a theory after the data is collected
and analysed. But in deductive approach, theory is set up first based on prior knowledge and
research results then researcher test the theory with collected data to confirm the theory. This
research will follow a deductive approach as related hypothesis for problem statement has
been already established.
Sampling:
The toughest job in this research will be to find out the appropriate sampling frame. This will
be the limitation of this research. As researcher is from Bangladeshi background, most of the
respondents reachable will be from same background. It is still undecided to set the sample
size. But researcher believe a set of at least 100 respondents from ethnic minority background
will be sufficient to draw decision about whether setting an online platform based on
facebook to sell o2 calling card and sim will be appropriate.

Research instruments:
A research can be a qualitative and quantitative or mixture of both. As this research is based
on fact finding and seeks to answer specific question, therefore it will be a mixture of both
qualitative and quantitative research. There are different research instruments such as
interview, survey, case study etc. As this is a mixture of both qualitative and qualitative
research survey is the most appropriate method which will be done by designing an online
questionnaire with both close and open ended questions.

Influences of social media on online shopping experiences
Data Collection method:
Data will be collected from both primary and secondary sources. Secondary data will be
collected from recent articles, journals and books on the subject matter. Some of the research
and articles is mentioned in appendix A which is related to the proposed problem statement
of this research.

Primary data will be collected from online survey. There are many tools available on the
internet to do survey online. Researcher will use Survey monkey tools
(http://help.surveymonkey.com/) by designing a questionnaire with both close and open
ended question to collect data. Online survey is most appropriate because this research is
about online shopping. Therefore, it is natural that people with online shopping experiences
are most likely and easily found in internet.

As this research seeks to develop a facebook platform to sell o2 calling card and sim card,
therefore, it is most appropriate to distribute and advertise questionnaire through facebook.
Almost all of the respondents will be facebook user.

Data analysis:
Collected data will be analysed by the spreadsheet. Microsoft excel will be used to present
the findings in graphical format in order to give a better professional look to the report.

Ethical Consideration:
Author is well informed about ethical consideration. In any part of this research, there is no
requirement of asking any private information which can be sensitive of any respondents.
Respondents who fill up the questionnaire will go for a draw to win a 10 worth of o2
international sim card in order to compensate for their time. This will be informed before they
fill up the questionnaire. Respondents will be also compensated by giving chance to look at
the outcome of the research if they are interested.


Influences of social media on online shopping experiences
Time Plan:
In order to manage the research and finish it on time, help of Gant chart will be taken which
is the best instrument to manage a project (Andrew,J.D., undated).

Feb March April
Task/Time Week
1-2
Week 3-
4
Week
1-2
Week 3-4 Week
1-2
Week 3-
4
Finalizing Proposal
Finish writing
literature review

Design Questionnaire
Data Collection
Data Analysis
Finish Dissertation

Conclusion:
The result of this research will benefit all the organizations who want to sell online specially
UK retail organizations. It will give marketers a better understanding of consumer behaviour
for online shopping specially through social media networking such as facebook and twitter.

The researcher is very much enthusiastic and excited about this innovative and new
knowledge in the field. With proper academic guidance and following a strict time table
should bring a good result for this research.

Influences of social media on online shopping experiences
References:

Andrew,J.D., (undated) Essential of Management, South Western Senage learnig, UK.

Anthoney D. Miyazaki & Fernandez (2005) Consumer Perceptions of Privacy and Security
Risks for Online Shopping, Journal of Consumer Affairs Vol.35, Issue 1, pages 27
44, Summer 2001, Available at:
http://onlinelibrary.wiley.com/doi/10.1111/j.1745-6606.2001.tb00101.x/abstract

Constantinides, S. Et al (2008) Social media: A new frontier for retailer, European retail
research,Vol. 22, 2008, pp. 1-28.
Available at:
http://www.utwente.nl/mb/nikos/publications/ecpapers/constantinidessocialmedia.pdf

Gefen, D. Et at (2003) Trust and TAM in Online Shopping: An Integrated Model, MIS
Quarterly Vol. 27, No. 1 (Mar., 2003), pp. 51-90,
Available at : http://www.jstor.org/stable/30036519

Hasan Mirza (2008) Social Medias influence on Purchase Decision?, Indiana Institute of
Management, Available at: http://www.slideshare.net/hasan_99/social-medias-influence-in-
purchase-decision

Haubl, G. & Trifts,V. (2000) Consumer Decision making in online shopping environment:
The effect of interatice decision aids, Marketing Science, Vol.19, No.1, Winter 2000, Pg 4-
21.

Hasslinger, A. Et al (2007) Consumer behaviour in online shopping, Department of Business
Studies, Kristianstad University.


Horrigan, John (2008) Online Shopping, Pew Internet & American Life Project, Washington,
D.C.


Kanokwan A. & Okada, H.(1993) How Consumer Lifestyles Affect Purchasing Behavior:
Evidence from Internet Shopping in Japan, The Graduate University for Advanced Studies,
Journal of Entrepreneurship Research. June 2007, Vol.2, No.2, p. 63-78
Influences of social media on online shopping experiences


Schneider, C. (Undated) Ordering versus Grabbing: The influence of temporal proximity on
impulsive online buying behaviour, Department of Information Systems, Washington State
University, USA.


Senecal, S.et al (2003) Consumers Decision-Making Process and Their Online Shopping
Behavior: A Clickstream Analysis, Journal of Business Research.