Factors Influencing Consumers Intention Towards Online Grocery Shopping In The United Arab Emirates

Online Grocery Shopping is still insignificant when compared to the traditional bricks and mortar stores in the United Arab Emirates, despite the very high internet penetration, the high availability of smartphones and personal computers, grocery retailer’s focus on this channel to strengthen market share, and the consumers searching for convenience and time saving. OGS can have a stronger role to play in consumers’ life, and E-Business development. Therefore, it is important to understand what influences intention and attitude of consumers towards OGS.

 

This particular study was conducted in order to analyze the trends of OGS in the UAE. The study was diverse and took into account various segments of respondents differentiated on the basis age, gender, education level, employment status, and salary compensation. Antecedent studies have identified several factors influencing attitude and intention towards Online Grocery Shopping; however, there is a scarcity of research in this area in the United Arab Emirates. The hypothesis that were designed were under these same observations and the data collected helped to accept or reject those hypotheses and eventually build a case for the findings and its practical implications in the market of the UAE. For this particular research, the researcher used the deductive approach as the topic already has existing literature and there were certain behavioral trends that were meant to be investigated as the purpose of this research.

 

Researcher has adapted deductive approach for testing the study hypotheses.  Sample size of 240 participants was determined using the formula 𝑛 = [𝑁 z2𝑝𝑞] / [(E2 (𝑁−1) + z2𝑝𝑞)]. Data was collected from an experimental sample and analyzed using SPSS 24 to acquire correlation matrix and view alpha if item deleted.  Findings of the study indicate that, Attitude towards online Purchase factor (M=4.33) is the most important factor as indicated by the respondents.  The next most influential factor was PU (M=4.22), followed by PT (M=4.14), PR (M=3.91), Intention to Purchase (M=3.85), Sensory Attribute (M=3.81) and finally the least influential factor indicated by respondents was Social Influence (M=3.41).  All of the mean values for all the factors were above 1.0 which indicates overall high impact of the influential factors that influence consumer’s intention towards OGS in the UAE.

 TABLE OF CONTENTS

ACKNOWLEDGEMENTS ii

ABSTRACT iii

TABLE OF CONTENTS iv

LIST OF FIGURES viii

LIST OF TABLES xi

LIST OF ABBREVIATIONS AND GLOSSARY OF TERMS xiv

CHAPTER 1: INTRODUCTION 1

1.1 Background ........................................................................................................................... 1

1.2 Factors investigated in the study ........................................................................................... 4

1.3 Research questions ................................................................................................................ 5

1.4 Brief overview of methodology ............................................................................................ 6

1.5 Structure of the current research ........................................................................................... 7

CHAPTER 2: LITERATURE REVIEW 9

2.1 E- Commerce overview ......................................................................................................... 9

2.2 History of internet and definition of E-Commerce ............................................................. 13

2.2.1 Internet access .............................................................................................................. 15

2.2.2 Mobile devices and personal computers ....................................................................... 15

2.3 E-Commerce milestones ..................................................................................................... 17

2.4 Products categories sold online ........................................................................................... 19

2.5 Types of payments online ................................................................................................... 22

2.6 Global leading online retailers ............................................................................................ 23

2.6.1 Amazon......................................................................................................................... 24

2.6.2 Alibaba ......................................................................................................................... 25

2.7 E-Commerce overview in the United Arab Emirates.......................................................... 26

2.7.1 Grocery channels in the UAE Online Vs Offline channel ........................................... 28

2.7.2 Grocery retailers in the UAE ........................................................................................ 31

2.7.3 E-Grocery ..................................................................................................................... 37

2.7.4 E-Grocery in the United Arab Emirates ....................................................................... 42

2.8 Consumer motivations, attitude and acceptance of OGS .................................................... 53

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2.8.1 Rogers’s Diffusion of Innovation Theory .................................................................... 54

2.8.2 Previous studies addressed different Factors ................................................................ 57

2.8.2 Summary of most relevant previous studies ................................................................. 63

2.8.3 Factors influencing consumers’ purchase intention ..................................................... 67

Customer Purchase Intention on Online Grocery Shopping 69

2.9 Theoretical approach ........................................................................................................... 89

2.9.1 Theory of Reasoned Action .......................................................................................... 89

2.9.2 Theory of planned behavior - TPB ............................................................................... 90

2.9.3 Technology Acceptance Model (TAM, TAM2, and TAM3) ....................................... 91

2.9.6 Gap in literature and significance of the topic .............................................................. 94

2.9.7 Conclusion .................................................................................................................... 96

CHAPTER 3 METHODOLOGY 100

3.1. Understanding the Research Design ................................................................................ 100

3.1.1 Purpose of the Study ................................................................................................... 100

3.1.2 Research Philosophy .................................................................................................. 101

3.2 Research paradigm ............................................................................................................ 102

3.3 Research Approaches ........................................................................................................ 104

3.4 Research Perspective ......................................................................................................... 105

3.5 Sampling method............................................................................................................... 107

3.6 Sample size determination ................................................................................................ 110

3.6 Methods for Collecting Data ............................................................................................. 111

3.7 Validity and Reliability of the instrument ......................................................................... 113

3.8 Variables............................................................................................................................ 119

3.9 Hypotheses ........................................................................................................................ 119

3.10 Process of Data Collection .............................................................................................. 121

3.10.1 The Response Rate ................................................................................................... 122

3.10.2 Data Editing and Coding .......................................................................................... 123

3.11 Statistical Tests used on the Data .................................................................................... 123

3.12 Ethical Issues for this research ........................................................................................ 127

CHAPTER 4 RESEARCH FINDINGS 128

4.1 Introduction ....................................................................................................................... 128

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4.2 Demographic data ............................................................................................................. 128

4.2.1 Gender ........................................................................................................................ 128

4.2.2 Age ............................................................................................................................. 129

4.2.3 Education Level .......................................................................................................... 130

4.2.4 Employment Status ..................................................................................................... 130

4.2.5 Monthly Income ......................................................................................................... 131

4.2.6 Frequency of buying grocery online ........................................................................... 132

4.3 Identification of each factor .............................................................................................. 133

4.4 Descriptive Statistics and Statistical Assumptions............................................................ 145

4.5 Exploratory Study ............................................................................................................. 147

4.6 Hypothesis Testing ............................................................................................................ 152

4.6.1 Hypothesis Testing Related to dependent and Independent Variable ........................ 152

4.6.2 Gender ........................................................................................................................ 155

4.6.3 Age ............................................................................................................................. 156

4.6.4 Comparison on the basis of Income Group ................................................................ 157

4.6.5 Comparison on the basis of Education level .............................................................. 158

4.6.6 Employment Status ..................................................................................................... 159

4.6.7 Frequency of buying grocery online ........................................................................... 160

4.6.8 Summary of Results of Hypothesis ............................................................................ 163

4.7 Overall Regression Analysis ............................................................................................. 165

4.8 Review of findings ............................................................................................................ 167

CHAPTER 5 CASE STUDY 172

5.1 Introduction ....................................................................................................................... 172

5.2 Case study overview.......................................................................................................... 174

5.3 Methodology of case study ............................................................................................... 175

5.4 Data analysis of a case study ............................................................................................. 175

5.5 Case study findings ........................................................................................................... 175

5.5.1 Results and findings ................................................................................................... 176

5.6 Review of Case Study Findings ........................................................................................ 183

5.7 Case study limitations ....................................................................................................... 184

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CHAPTER 6: DISCUSSION, IMPLICATION AND RECOMMENDATIONS FOR FURTHER RESEARCH 185

6.1 Introduction ....................................................................................................................... 185

6.2 Discussion of the results .................................................................................................... 185

6.3 Implications of the study ................................................................................................... 191

6.4 Future Recommendations and Limitations of the study.................................................... 194

6.5 Conclusion ......................................................................................................................... 195

REFERENCES 196

APPENDIX 217

Cover Letter............................................................................................................................. 217

Questionnaire .......................................................................................................................... 218

Scree Plot Diagram.................................................................................................................. 220

Ethics Form ............................................................................................................................. 221

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LIST OF FIGURES

Figure 1 E-Commerce Global Growth Potential and Expectations Source: Planet Retail RNG, 2017 11

Figure 2 E-Commerce global overview and weight from GRS from 2015 to 2021 .............................. 11

Figure 3 Retail E-Commerce global sales from 2014 to 2021 in Billion US Dollar ............................. 12

Figure 4 Store based retailers investing in E-Commerce and some of them acquiring E-Commerce retailers Source: (RNG, Planet Retail, 2017) ......................................................................................... 12

Figure 5 Future digital world 2030 Source: (RNG, Planet Retail, 2017) .............................................. 13

Figure 6 Internet users per 100 people by development stage ............................................................... 15

Figure 7 Mobile Subscriptions vs PC Computers by Development Stage ............................................ 16

Figure 8 Top six products categories hare of internet users purchase the past 12 months as of 2018 Source (Statista, 2019) ........................................................................................................................... 19

Figure 9 Categories percentage purchased online in the past 12 months vs percentage planning to purchase in the coming 12 months Source: (Grant, M;, 2017) .............................................................. 20

Figure 10 Top five categories by region Source: (KPMG, 2017).......................................................... 20

Figure 11 Expected category growth by generation Source: (KPMG, 2017) ........................................ 21

Figure 12 Major investment in bricks and mortar Source: (RNG, Planet Retail, 2017) ....................... 24

Figure 13 Amazon’s growth journey from 1997 to 2017 Source: Amazon, Statista 2018 .................... 24

Figure 14 Alibaba’s growth journey from 2010 to 2018 Source : (Statista, 2019) ............................... 25

Figure 15 Top 5 global retailers development from 2017 20 2022 Source: (RNG, Planet Retail, 2017)................................................................................................................................................................ 25

Figure 16 Top 10 global E-Commerce retailers development from 2017 20 2022 Source: (RNG, Planet Retail, 2017) ........................................................................................................................................... 26

Figure 17 Top 15 markets by internet users, and mobile percentage of internet traffic by market Jan 2017 Source: (RNG, Planet Retail, 2017) .............................................................................................. 27

Figure 18 an illustration of the conventional route to market Source: (RNG, Planet Retail, 2017) ...... 29

Figure 19 Retail business models definitions Source (RNG, Planet Retail, 2017)................................ 30

Figure 20 the grocery channels CAGR 2012-2022 Source: (RNG, Planet Retail, 2017) ...................... 39

Figure 21 Online grocery sales development 2011-2021 Source: (RNG, Planet Retail, 2017) ............ 39

Figure 22 Online operations of top 10 global grocery retailers Source (RNG, Planet Retail, 2017) .... 40

Figure 23 Largest Online Grocery Operators Source (RNG, Planet Retail, 2017) ................................ 41

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Figure 24 Online sales development 2015-2020, and total retail sales development Source: (Statista, 2019) ...................................................................................................................................................... 41

Figure 25 Total retail sales development from 2015 to 2020 Source: (eMarketer Report, 2016) ......... 42

Figure 26 FMCG E-Commerce share of total FMCG sales development until 2022 in the United Arab Emirates Source: Nielsen, 2018 ............................................................................................................. 45

Figure 27 Reasons consumers shop online instead of in bricks and mortar stores Sourc0e : (KPMG, 2017) ...................................................................................................................................................... 46

Figure 28 Stages of the online purchase journey ................................................................................... 51

Figure 29 OS journey Source: (Lemon & Verhoef, 2016) ................................................................... 51

Figure 30 Loading time of most popular E-Commerce websites .......................................................... 52

Figure 31 Customer experience pyramid ............................................................................................... 53

Figure 32 Innovation process ................................................................................................................. 56

Figure 33 Factors Driving Purchase Decisions ...................................................................................... 73

Figure 34 Theory of Reasoned Action – TRA ....................................................................................... 89

Figure 35 Theory of Planned Behaviour – TPB .................................................................................... 90

Figure 36 the “Technology Acceptance Model”, version1 .................................................................... 91

Figure 37 TAM 2 constructs ( (Venkatesh & Davis, 2000) ................................................................... 92

Figure 38 TAM 3 constructs Source: Venkatesh and Bala, 2008 .......................................................... 93

Figure 39 developed theoretical framework, researcher 2018 ............................................................... 95

Figure 40 Research Philosphy (Cameron, 2009) ................................................................................. 101

Figure 41 Research Paradigm illustration (Aliyu, 2008) ..................................................................... 103

Figure 42 Research Perspective (Taha & Manoukian, 2009) .............................................................. 106

Figure 43 Cross Sectional vs. Longitudinal Research (Johnson, 2016) .............................................. 107

Figure 44 an illustration of convenient Sampling Method (Chidlow & Ghauri,2011) ........................ 108

Figure 45 Representation of Sample Size (Mohajan, 2017) ................................................................ 110

Figure 46 Methods of Collection of Quantitative Data (Alejandro, 2010) .......................................... 112

Figure 47 Types of Validity (Mohajan, 2017) ..................................................................................... 114

Figure 48 Workings of a Cronbach’s Alpha (PWC, 2017) .................................................................. 116

Figure 49 Diagrammatic Representation of the Research Process ...................................................... 120

Figure 50 an example of Regression Analysis (Mohajan, 2017) ......................................................... 124

Figure 51 Illustration of Anova (Johnson, 2016) ................................................................................. 125