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Generat ion Y and online fashion shopping: Orient at ions and profiles
Songwei Zhang
What drives Gen Y loyalt y? Underst anding t he mediat ed moderat ing roles of swit ching cost s and alt er…
Anil Bilgihan
Journal of Retailing and Consumer Services 31 (2016) 304–312
art ic l e i nf o a b s t r a c t
Article history: Basing on the large scale annual social surveys in Israel, the current study uses Generational Cohort
Received 6 October 2015 Theory as a framework to examine the trends of internet adoption and online purchasing behavior
Received in revised form among Generation X and Generation Y in the past decade. During the decade, the rate of internet access
21 April 2016
and online purchasing increased continuously in both generations, however internet users did not fully
Accepted 22 April 2016
utilize the potential of online shopping. Our findings support the use of Generational Cohort Theory as a
market segmentation tool: although the rate of internet access was higher in Generation Y, the per-
Keywords: centage of those who bought electrical appliances, furniture or vacations online was higher in Generation
Online shopping X. Although Generation Y with its hedonism, extravagance and great connectivity is considered to be a
Generation X
more attractive target population for businesses, it is important to direct marketing efforts toward
Generation Y
Generation X, which according to the literature buys more due to higher disposable income, and more
Digital divide
Repeated cross-sectional study free time.
& 2016 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.jretconser.2016.04.015
0969-6989/& 2016 Elsevier Ltd. All rights reserved.
S. Lissitsa, O. Kol / Journal of Retailing and Consumer Services 31 (2016) 304–312 305
2006). Major parts of their lives and daily activities are mediated social networks are vital to Gen Y (Hewlett et al., 2009). Male
by digital technologies: social interactions, friendships, civic ac- shoppers in the Gen Y exhibit significantly higher levels of shop-
tivities, and hobbies. They are digital natives who have never ping enjoyment, recreational shopping and market mavenism than
known any other way of life (Palfrey and Gasser, 2013). males in other generational cohorts (Brosdahl and Carpenter,
2011).
2.4. Generation X and Generation Y in a consumption context Studies have yielded contradictory findings regarding which
generation spends more in the U. S. – Gen X or Gen Y. According to
Generational differences, especially between Gen X and Gen Y Paul (2001), Gen Y is the second largest consumer group and thus
have been important subjects for academic research in consumer a global generation that is highly targeted by marketers because of
behavior for years (Acar, 2014; Shaw and Fairhurst, 2008), but less its significant purchasing power (Howe and Strauss, 2007). Ac-
so for e-shopping. cording to Business Insider (2015), this consumer age group is the
Scholars have reported that Gen X is highly sophisticated in its key age demographic for online commerce, spending more money
buying behavior and is turned off by slick and generalized pro- online (an average of $2,000 annually on e-commerce in 2013) in a
motions (Dunne and Lusch, 2008). Gen X still makes purchases given year than any other age group, even though it earns less
based on traditional search and decision-making methods (Hea- income than Gen X. In contrast, however, Forrester (2012) states
ney, 2007). They want to hear the features of the product as well that Gen X spends the most online, about 15% more than Gen Y
as an explanation of why these features are necessary (Himmel, and roughly 25% more than the average adult pays out for online
2008). They have an attitude of risk avoidance and a low capacity purchases. Moreover, according to American Express, Gen X has
for risk (Reisenwitz and Iyer, 2009). As consumers, Gen X looks for more spending power than any other generation (Peralta, 2015).
customer convenience, community relations, and branding. They
have a reputation of being incredibly disloyal to brands and 2.5. Research questions
companies (Williams, 2005). One of the characteristics of Gen X is
that they care about the opinions of others. They can be unsure of The digital divide literature indicates that the age based digital
themselves and often need reassurance that their choices are divide is one of the major gaps regarding the internet access and
sound. They tend to ignore advertising aimed at them and reject use. In addition, the theory of generational cohort focuses on the
any form of segmentation and marketing technique. Moreover, cultural differences between the generations resulting from
because they have many needs and greater financial restraints, meaningful events that occurred during their coming-of-age years.
they often shop at value-oriented retailers. Gen X likes to research Due to the rapid adoption of Internet use among younger popu-
while shopping online. They read more reviews and visit more lations and their impressive purchasing power, both generations X
opinion sites than any other generation (Peralta, 2015). and Y have the highest potential for online shopping. For these
Gen Y has been brought up in an era where shopping is not reasons, it is important to examine the process of adoption of
regarded as a simple act of purchasing. The proliferation of retail online shopping among these two generations over time as well as
and product choice has resulted in a retail culture where acts of whether there is a gap in online shopping among and between
shopping have taken on new entertainment and/or experiential them. Therefore, the current study examines the trends in internet
dimensions (Lehtonen and Maenpaa, 1997). Consequently, Gen Y is adoption and online purchasing behavior in Gen X and Gen Y over
likely to have developed a different shopping style compared with the decade of 2003 2012 according to the following research
previous generations (Bakewell and Vincent-Wayne, 2003). Gen Y questions:
is socialized in a materialistic society (Bakewell et al., 2006) and
has extensive social networks (Parment, 2009). Thus, they are 1. What trends in internet access and online purchasing are ob-
more driven to use status-seeking consumption as a means of servable over the decade 2003–2012 for Gen X and Gen Y in
displaying wealth and purchasing power (Eastman and Liu, 2012; Israel?
O’cass & Frost, 2002). Due to their ability to easily access vast 2. Which variables have an impact on internet access and online
amounts of information, Gen Y's are highly educated in many as- purchasing in each generation and what, if any, are the inter-
pects (Wolburg and Pokrywczynski , 2001), focus greatly on generational differences in these impact patterns?
technical information (Rahulan et al., 2015) and usually make 3. Has the impact of socio-demographic variables on internet ac-
purchase decisions having undertaken prior research on the topic. cess and online purchasing in each generation changed over
This also makes them more aware of marketing tactics, and time?
therefore more suspicious of marketing compared to their pre-
decessors (Tsui and Hughes, 2001). Gen Y is used to making de-
cisions faster and with less deliberation than other generations 3. Methods
and is faster at adopting new opportunities (Parment, 2009). As a
result Gen Y makes more frequent and more impulsive purchases 3.1. Source of data
than Gen X consumers.
Caplan (2005) notes that Gen Y’s want products that match Study data relied on the annual social surveys conducted by
their personality and lifestyle, paying little attention to brands. Israel's Central Bureau of Statistics (CBS) from 2003 to 2012,
They consider themselves as rationally-oriented consumers, for among a representative sample of the Israeli population. The CBS
whom price and product features are more important than brand conducts a social survey annually using different respondents each
names (Phillips, 2007). Gen Y's loyalty is said to be fickle, changing year. The surveys provide up-to-date information about living
quickly according to fashion, trend and brand popularity, and fo- conditions and the welfare of the population in Israel. The social
cusing on style and quality rather than price (Reisenwitz and Iyer, survey questionnaire has two main parts. The first is a standard
2009). It is hard to create customer loyalty among them, since core questionnaire containing about 100 items covering the main
their attitude is clearly based on their experience, which casts the areas of life such as: socio-demographic characteristics of house-
deciding “vote” as to who will be the beneficiaries of their pur- hold members, employment, economic situation, health, skills:
chasing power (Parment, 2009). Additionally, marketers perceive studies, languages, courses, use of computers and the internet and
Gen Y consumers as having a high level of spending power (Martin so on. The second is a variable module that is devoted to one or
and Turley, 2004;Wolburg and Pokrywczynski, 2001). Finally, two different topics each year, in order to investigate them in
S. Lissitsa, O. Kol / Journal of Retailing and Consumer Services 31 (2016) 304–312 307
greater detail than is possible in the core questionnaire. The for- 17,001–24,000. 10. NIS More than 24,000. This variable was
mulation of all the questions used in the study was identical transformed into a continuous variable using the midpoint of each
throughout the decade as we used only the core questions. group and divided by 1000.
CBS interviewers carry out face-to-face interviews in the field Hebrew language proficiency.
between January and December each year. The duration of the The respondents were asked: “What is the level of your
interviews, each of which is conducted in Hebrew, Russian or knowledge of the Hebrew language, in speech, reading and writ-
Arabic, is about one hour. ing. The scale was 1–very good, 2–good, 3–moderate, 4–weak, 5–
don’t know at all. The index that combined reading, writing and
3.2. Population speaking skills in Hebrew was measured on a scale of 1–5 (1–Not
at all, 5–Very well) that was constructed as an average of these
The survey pool population comprises the permanent non-in- three language skills. Cronbach Alpha for Proficiency in Hebrew
stitutional population of Israel aged 20 and older. New immigrants language was.95.
are included in the survey population if they have been resident in
Israel for at least six months. 3.4.2. Dependent variables
Using the internet in the last three months was measured by the
3.3. Sampling method following item: “During the last three months, have you made use
of the internet? ” Internet access was coded as 1 for those who
Each year the CBS sample size was about 7,500 persons aged 20 used and 0 for non-users.
and older, representing about 4.5 million people in that age Using the internet for shopping was measured by the following
bracket. The response rate was around 80%. The sample design item: “During the past three months did you use the computer for
involved defining groups based on a combination of three demo- purchasing goods or services, such as electrical appliances and
graphic variables: population groups (Israeli-born Jews, im- furniture or vacations? ” and was coded 1 for users and 0 for non-
migrants and Arabs), age and gender. The expected size of each users. Between 2003 and 2012, smartphone penetration in Israel
design group was to be proportional to its size in the population. was low, therefore purchasing by smartphone was not included in
Our total sample, combining interviews conducted over 10 the questionnaire. According to Google’s project (Our Mobile Pla-
years, included 73,523 respondents. We used the total sample for net), the smartphone penetration in Israel at the end of the re-
descriptive statistics in order to compare Gen X (those born 1961– search period, 2012, was 35%, and lower of course in previous
1979), Gen Y (born 1980–1992) and the other age groups (those years.
born before 1961). Although generation Y is defined in the re-
search literature as those who were born between 1980 and 1999, 3.4.3. Control variable
in our sample, those who were born after 1992 were not included, Wave of data collection was coded on a scale of 0–9, where
because in 2012 – the last year of the survey - they were younger 2003¼ 0, 2012 ¼9.
than 20 years old. For a deeper understanding of the process of
internet adoption and online purchasing, multivariate analyses
were conducted among Gen X and Gen Y respondents. Our sample 4. Results
for the multivariate analysis included 40,915 respondents, of them
28,267 belonging to Gen X, and 12,648to Gen Y. We will first present the findings regarding internet access and
online shopping over time and then apply multivariate analysis in
3.4. Variables order to predict internet access and online shopping. In the mul-
tivariate analysis predicting online shopping, we focus only on the
3.4.1. Independent variables group of internet users and exclude all non-users.
Generation was measured by two categories: Gen X, those born
1961–1979 and Gen Y, those born 1980–1992. 4.1. Descriptive findings
Ethnicity was measured by two dichotomous variables: Arabs
and Immigrants (those who immigrated to Israel after 1989). Ve- 4.1.1. Internet access over time
teran Jews (born in Israel or immigrated before 1989) were the Fig. 1 shows the percentage of internet access for both gen-
comparison group. erations and the total sample.
Gender was coded 1 for men and 0 for women. Fig. 1 shows that during the decade, internet adoption in both
Religiosity was measured by a scale ranging from 1 to 4:1–Not generations increased by about 30% points. The findings show that
religious, secular; 2 – Traditional, 3 -Religious, 4 – Very religious. over the time internet access was higher among Gen Y, compared
Marital status was measured as a dichotomous variable, 1 – to Gen X. In both groups the percentage of internet adoption was
married; 0 – other marital status. higher, compared to the total sample, which includes respondents
Number of children was measured as a continuous variable. born before 1961. It should be noted that the generation gap in
Area of residence was coded 1 for center residents (Jerusalem, favor of Gen Y was maintained throughout the decade.
Tel-Aviv, and Central region) and 0 for periphery residents (North,
Haifa, South, Judea, and Samaria). 4.1.2. Purchasing products and services online over time
Education was measured by the highest diploma received by Fig. 2 presents the rates of internet use for purchasing products
the respondent. and services for both generations and the total sample.
Employment was measured as a dichotomous variable, 1 – Fig. 2 shows that the penetration of online shopping was re-
employed, 0 –not employed. latively low with very moderate differences between the two
Income level was measured by the item: “Last month, what was generations – only about one third of the respondents reported
the total gross income of all members of the household, from all online purchasing in the past three months. It should be noted
sources: work, pensions, support payments, rent, etc.? ” on a scale: that during the decade the percentage of respondents who pur-
1. NIS 2,500 (New Israeli Shekels) or less; 2. NIS 2,501–4,000; 3. chased products or services online in the past three months in
NIS 4,001–5,000; 4. NIS 5,001–6,500; 5. NIS 6501–8,000; 6. NIS both generations increased: in Gen X by 25% points and in Gen Y
8,001–10,000; 7. NIS 10,001–13,000; 8. NIS 13,001–17,000; 9. NIS by 20% points. The findings show no continuous trend in the
308 S. Lissitsa, O. Kol / Journal of Retailing and Consumer Services 31 (2016) 304–312
users by 24% points and among Gen Y users by 17% points. The
findings show no continuous trend in the growth of online pur-
chasing among internet users over time: the starting point of both
groups was the same (about 20%), in 2007 the usage gap in favor of
Gen X was about 10%, from 2008 to 2011the gap decreased and in
2012 Gen X again held an advantage (44%) compared to Gen Y
(36%). In both generations the penetration of shopping online
among internet users was similar to the total sample.
Table 1
Internet use in the last three months among Generations X and Y –Logistic Regression Model.
Generation X Generation Y
** ** ** **
Wave of data collection 0.31 1.36 0.29 1.34 0.28 1.33 0.41 1.51
Ethnicity (comparison to veteran Israelis)
Immigrants 0.08 0.92 0.06 0.94 0.08 1.08 0.07 1.07
Arabs 0.88** 0.41 1.29** 0.27 0.71** 0.49 0.76** 0.47
Gender (male ¼1) 0.30** 1.35 0.46** 1.59 0.06 0.94 0.01 1.01
Age 0.04** 0.96 0.04** 0.96 0.04 1.04 0.03 1.04
Locality (Center ¼1) 0.15** 1.16 0.14** 1.15 0.02 0.98 0.01 0.99
Family income 0.09** 1.09 0.07** 1.07 0.08** 1.08 0.06** 1.06
Religiosity 0.61** 0.54 0.53** 0.59 0.79** 0.45 0.52** 0.59
Education 0.62** 1.85 0.62** 1.86 0.68** 1.97 0.68** 1.97
Number of children 0.17** 0.85 0.16** 0.85 0.39** 0.68 0.36** 0.70
Employment (employed ¼1) 0.40** 1.49 0.39** 1.47 0.38** 0.68 0.37** 0.69
Marital status (married ¼ 1) 0.09 0.92 0.10* 0.90 0.49** 0.61 0.52** 0.59
Hebrew language proficiency 0.47** 1.60 0.49** 1.62 0.57** 1.76 0.56** 1.76
Gender by wave of data collection 0.05** 0.95 0.02 0.98
Arabs by wave of data collection 0.11** 1.11 0.00 1.00
Religiosity by wave of data collection 0.02** 0.98 0.06** 0.94
Family income by wave of data collection 0.01** 1.01 0.00 1.00
Constant 2.00** 0.14 2.02** 0.13 2.79** 0.06 3.21** 0.04
Cox & Snell Rho2 0.35 0.35 0.26 0.27
Nagelkerke Rho2 0.51 0.51 0.43 0.44
*
p o 0.05.
**
po 0.01.
0.51 and 0.44 respectively. likely to purcase online compared to unemployed, whereas dif-
ferences between employed and unemployed Gen X respondents
4.2.2. Predicting the purchase of products and services online were insignificant. Married respondents from Gen Y were more
Table 2 presents the results of the logistic regressions for pre- likely to purchase products online, compared to unmarried re-
dicting online shopping among Gen X and Gen Y internet users. spondents, whereas in Gen X this difference was insignificant.
As can be seen from Table 2, the odds of using vs. not using the Among Gen X, age was negatively correlated with the odds of
internet for purchasing products and services in the preceding using the internet for purchasing products and services, while
three months increased over time for both generations. In both among Gen Y, a positive correlation between these variables was
generations Arabs were less likely to use the internet for this found. Similarities were also found between the two generations
purpose compared to veteran Jews, while the differences between in the impact of education (positive), family income (positive),
immigrants and veteran Jews were insignificant. The results religiosity (negative), number of children (negative) and Hebrew
proficiency (positive). In both generations males were more likely
showed differences in the impact of socio-demographic variables
to buy products and services online compared to females. The
on both generations. Employed Gen Y respondents were more
impact of locality was insignificant.
In both generations all interaction effects were insignificant,
Table 2
Purchasing products and services online in the last three months among Genera- indicating that the effects of socio-demographic variables on on-
tions X and Y –Logistic Regression Model among internet users. line purchasing were stable over time.
It is important to note that the quality measures of the model in
Generation X Generation Y
the sample of internet users were only about 0.17.
B Exp(B) B Exp(B)
** **
Wave of data collection 0.17 1.19 0.14 1.15 5. Discussion
Ethnicity (comparison to veteran Israelis)
Immigrants 0.10 1.10 0.10 0.90
Arabs 0.52** 0.59 1.03** 0.36 The main purpose of the current study was to follow the trends
Gender (male ¼1) 0.79** 2.20 0.68** 1.97 in internet usage for online product purchasing behavior among
Age 0.03** 0.97 0.06** 1.06 Gen X and Gen Y respondents during the decade 2003 2012 and
Locality (Center ¼1) 0.06 1.06 0.09 0.92
Family income 0.04** 1.04 0.02** 1.02
to identify variations in the socio-demographic characteristics fa-
Religiosity 0.14** 0.87 0.13** 0.88 cilitating online shopping over time. As far as we know, this is the
Education 0.19** 1.21 0.28** 1.32 first study to examine the issue using a large representative
Number of children 0.04* 0.96 0.16* 0.85 sample in regard to the crucial decade when online purchasing
Employment (employed ¼1) 0.01 1.01 0.32** 1.38
became an important player in the market. In addition, this is the
Marital status (married ¼ 1) 0.06 1.07 0.26* 1.29
Hebrew language proficiency 0.26** 1.30 0.23** 1.26 first study to integrate the digital divide and the theory of gen-
Constant 3.00** 0.05 5.21** 0.01 erational cohorts within the context of online purchasing.
Cox & Snell Rho2 0.13 0.12 Adoption of the internet is a necessary condition for online
Nagelkerke Rho2 0.17 0.17
shopping. During the decade under study, internet adoption in
*
p o 0.05. both generations increased by about 30% points. The percentage of
**
po 0.01. internet adoption was consistently higher among Gen Y compared
310 S. Lissitsa, O. Kol / Journal of Retailing and Consumer Services 31 (2016) 304–312
to Gen X, throughout the decade. Gen Y grew up at a time when the prevailing patriarchal orientation (Dahlberg, 2007; Loch et. al.,
information and communication technologies developed. Thus, 2003) by providing easy access to more modern views.
Gen Y is composed of'digital natives’ compared to Gen X, who Controlling for socio-demographic variables, no differences
could be considered'digital immigrants’ (Bennett, Maton, and were found in the probability of online purchasing between im-
Kervin, 2008). migrants and veteran Jews. In contrast to most countries in which
In both generations internet access was higher among Jews immigrants come from developing countries, the majority of im-
(compared to Arabs), less religious, with higher education and migrants to Israel are from the FSU and English-, French- and
income, higher Hebrew proficiency and fewer children. The find- Spanish- speaking countries, which are characterized by high le-
ings of our study correspond to the research literature (Hargittai vels of human capital and a much more highly developed view of
and Hinnant, 2008; Lissitsa and Chachashvili-Bolotin, 2014, Lis- the world (Amit, 2012; Lissitsa and Chachashvili-Bolotin, 2014).
sitsa 2015b; Losh, 2010; Mesch and Talmud, 2011; Williams, 2013).
In contrast to the relatively high percentage of internet adop- Age
ters in 2012 (81% and 86%, respectively, for Gen X and Gen Y), the
percentage of those who bought electrical appliances, furniture or Our findings show that among Gen X, the probability of online
vacations online was significantly lower in both generations (44% shopping decreases with age, while among Gen Y, the probability
and 36% among internet users from Gen X and Gen Y, respec- of online shopping increases with age. Until their early thirties, the
tively). This may be explained by the type of products that were needs of Gen Y families consistently grow as their families grow,
checked in this study. Electronics, furniture and vacations are not and with it, their shopping needs. Since at this point in their lives
high-frequency purchases. The other explanation may be the ap- they have little free time, it is reasonable that, as digital natives,
prehension and lack of security the Israeli public feels about they will turn to online shopping, and we have indeed shown that
submitting credit card numbers for online shopping (Google, among Gen Y, age is positively correlated with online shopping. As
2013). Our findings show that in spite of the fact that the per- for the Gen X, the negative correlation between age and online
centage of Internet users among Gen Y is higher, compared to Gen shopping may be explained by intensification of the risk and tra-
X (see Fig. 1), fewer of them use the internet for shopping (see dition barriers which become more sufficient for preventing and
Fig. 3). These findings are in line with the research literature minimizing online purchasing behavior with increasing age
(Heaney, 2007). among the older age group (Lian and Yen, 2014).
In light of the generational cohort theory we can consider the In both generations, the quality measures in the model pre-
impact of important events in Israeli society during the coming-of- dicting the probability of Internet access were Nagelkerke Rho2 ¼
age years of Gen X and Gen Y on their purchasing behavior. Al- 0.51 for Gen X and Nagelkerke Rho2 ¼0.44 for Gen Y, whereas in
though the specific events were different for each generation, their the model predicting the probability of online shopping they were
common denominator was increased uncertainty and greater significantly lower (Nagelkerke Rho2 ¼ 0.17 for both generations).
personal insecurity, which may impact the willingness to take In addition, our findings show no significant interaction effects
risks. The inability to examine products physically during online between the wave of data collection and socio-demographic
shopping increases the perception of risks associated with online variables on the online purchasing, whereas the impacts of socio-
shopping as consumers cannot touch, feel, or try on products be- demographic variables on Internet adoption have changed over
fore purchase. Future research which examines the online pur- time. This may be a result of a self-selection process among in-
chase of products bought with higher frequency may be able to ternet adopters compared to the general population. In other
clarify which of these explanations are most feasible. words, the main selection on the basis of socio-demographic
In order to obtain a deeper understanding of online shopping in characteristics occurs in the first level digital divide, whereas
both generations we present a review of the impact of the most among internet users the power of these characteristics to differ-
important socio-demographic variables: entiate is much lower.
Gender
6. Study limitations and recommendations for future study
In both generations males were more likely than females to
purchase online. On this point our findings correspond with stu- It is important to mention the limitations of this study, which
dies which found that in recent years men shop more than ever derive from the limitations of the CBS social survey database. Only
and are also spending record amounts (Bakewell et al., 2006; one questionnaire item examined online shopping. This item re-
Keenan, 2010). In addition, although it may be politically incorrect ferred to three different product types which involve different
to say so, electric appliances are considered the domain of males in decision processes: for example electric appliances are generally
terms of purchase decision making. Our findings correspond to products requiring consumption decisions by males, furniture is
Israeli research which found that males are more likely than fe- usually selected together by both spouses and tourism products
males to purchase electronics online (58% vs. 31%, respectively) are selected mostly by females (Jackson et al., 2011; Oh et al.,
(MasterCard, 2012). However, we can assume that the product 2004). In addition, the social survey examined categories with low
categories chosen for this research may have created a bias in the consumer frequency and with high involvement. Furthermore,
results, as female may be more likely to purchase other product based on how the CBS formulated the dependent variable, it is not
categories online. possible to draw conclusions about overall percentages of online
shoppers. In order to gain a deeper understanding of online pur-
Ethnicity chasing processes and consumer behavior of both generations,
future studies should expand the products examined by adding
In both generations veteran Jews were more likely than Arabs low involvement products and frequently purchased products.
to purchase products online. The late introduction and ineffective
use of the internet in the Arab sector (Lissitsa, 2015b) may be at- 7. Practical Implications
tributable to cultural factors that link Israeli Arabs with the tra-
ditional Muslim world. In the Arab world, the internet is perceived Finally, practical implications can be drawn from the current
as a force that disrupts tradition, extreme religious instruction and study. Although Gen Y with its hedonism, extravagance and great
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