4. E-commerce retail market in Kaliningrad city
4.1. Online purchasing behavior of Kaliningrad citizens
4.1.1. Quantitative research and its outcome
As it has been introduced in Chapter 3, the self–administrated method was used to conduct a survey and provide knowledge regarding the customers’ online purchasing behavior in Kaliningrad.
171 respondents took part in the questionnaire, who were people who lived in Kaliningrad and were regular consumers of the Kaliningrad e-commerce and offline market.
The first three questions were designed to get personal information about the respondents.
The figure in Appendix C.III represents the gender distribution. Female respondents – 52%, Male respondents – 48%
The following question distributes the proportion of the age group of respondents. It is important to note that this age group includes younger Generation– X, millennials, and older Generation–Z. In the 18 – 24 age group the proportion is 45%, in 25–34 around 32% and respondents who are between 34–44 take 23% of the respondents. From the chart in Appendix C.IV, we can conclude that the survey was undertaken mostly by the younger generation of Kaliningrad city, who were doing their higher–level studies and/or working. Therefore, they were aware of modern technologies, had a decent technological background and actively used digital devices in their daily practices.
The last Figure referring to the personnel information about the respondents shows the level of education amongst them and is presented in Appendix C.V. Most of the respondents have Master level – 43%, the smaller proportion hold Bachelor level – 35% and the least amongst the respondents were High School graduates – 21%. From the pie chart, we can see that most of the respondents have master level, they are specialists and most of them are confident in using new technologies in their daily working activities.
Next question posed to the respondents aimed to show the technological background of the respondents. The figure 4.1.1 shows the devices that the respondents are actively using in their daily practices. From the pie chart we can conclude that most of the respondents have smartphones and mainly the smartphones are devices that people used the most. While there is only 49% of people actively using PCs, 13.2% using tablets and only 5.7% have and actively use smartwatches.
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Figure 4.1. 1 Distribution of digital devices respondents actively use Source: Own research. Number of respondents = 171.
Following this the respondents gave more insight information regarding the most popular way to access the internet amongst the respondents. As concluded from the pie chart in Appendix C.VI, the proportion of mobile and wire internet connection users are nearly the same, however the number of users of mobile connections at most is slightly higher. From the pie chart, we can conclude that people can make purchases as they are at home on the couch, and as they are outside.
Next three questions address the changes of customer behavior regarding the usage of digital devices, doing online purchases and the changes of their shopping preferences since Covid – 19. Appendix C.VII gives information whether respondents started to use digital devices more in their daily practices since Covid– 19. As per pie chart we can conclude that 63% of respondents started to use more digital devices in recent 2 years since Covid–19 started.
To support this, the next figure in Appendix C.VIII shows that more usage of digital devices leads to more online purchases since Covid–19. The respondents' answers to these questions are quite similar. From this we can conclude some correlation on using the devices and making online purchases.
To conclude, respondents have been asked whether they have not shifted from offline to online purchases for some products and services since Covid–19. As a result, we can see that respectively 32% and 21% of respondents strongly disagree and disagree somewhat with this statement (Figure 4.1.2). Only 6% and 11% of respondents noted that they have not shifted to online purchases for some products. 28% of respondents remain neutral to this statement. The pie chart concludes that people started to buy some categories of products or services more online since Covid–19. This can be explained by governmental restrictions, and the appearance of additional online services on buying of products or services. (e.g., digital travel cards, online grocery marketplaces).
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Figure 4.1. 2 Distribution of respondents that shifted from offline to online purchase for some type of products and services
Source: Own research. Number of respondents = 171
The figure below is evident that people now tend to buy more online via mobile apps. Overall, 65% of respondents who make purchases online prefer to do it via mobile applications (Figure 4.1.3). While PC and Tablet devices prefers only 23% and 12% respectively. This pie chart supporting the Figure 2.2.2. from the Second chapter, where the secondary analysis was done and the results were quite similar.
Figure 4.1. 3 Preferred way of respondents to make purchases Source: Own research. Number of respondents = 171
Figure 4.1.4 displays that nearly 40% of online customers prefer to make purchases via digital wallets such as Apple Pay and Samsung Pay. They are followed by the ones who prefer to pay by Bank cards (30%) and the consumers who prefer to pay by cash upon the receipt after delivery. The least proportion being 9% of respondents, prefer paying via electronic payment systems like PayPal and Google Pay.
65%
23%
12%
How do you mostly prefer to shop online?
Through mobile applications Through personal computer Through tablet
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Figure 4.1. 4 Preferred online payment method.
Source: Own research. Number of respondents = 171
As it is shown from Figure 4.1.5 over 47% of respondents prefer the “pick–up from store”
delivery method. This is due to the fact, that, for example, a person can order and get the product from the pick–up point on the way home or on the way to work. Moreover, if the pick–
up point of the store is located closely, it will be faster than the free delivery method, which is stated as the second most preferred delivery way as having 27% of respondents. Next is the postal office for about 12%. The main advantage is that it gives the opportunity to make orders outside the region and worldwide, but the delivery takes a very long time. The last two least preferred methods are delivery lockers (in other words, collection boxes) with 9.2%, which are very convenient but poorly developed in Kaliningrad region and paid express delivery of 4.7%.
Figure 4.1. 5 Preferred delivery method Source: Own research. Number of respondents = 171
The graph 4.1.6 shows the frequency of respondents making purchases online through their digital devices. Around 44% of respondents are making purchases twice or more per month The following category of respondents making online purchases once or more per week as of 35%, while 16% of respondents only do one purchase per month. Only the 5% of Kaliningrad consumers taking part in the survey make few purchases per year.
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Figure 4.1. 6 Frequency of customers purchasing online Source: Own research. Number of respondents 171
Next figure aims to provide information regarding the main reason’s customers are making purchases online. The bar chart (Figure 4.1.7) clearly shows that the main reason for online shopping amongst the respondents is the big assortment of products on the internet compared to physical stores. On the internet a customer has a unique opportunity to find a product or service which will meet all their needs. The other factor is prices. For most of the stores, their products in online stores are cheaper than in physical stores, moreover, it can happen that the same product will be on sale in online stores but not in physical stores. So, 21.4% of respondents find the aspect of lower price important. The other 3 factors following the low–
price factor are Loyalty programs (13.2%), ease of accessibility (12.6%) and ability to compare the products (13.3%). These are the indirect privileges that can be in several online stores. Such services as loyalty programs and well–structured online platforms can ensure good customer purchasing experience and make them return for another purchase. Moreover, the ability to compare the products gives customers detailed knowledge regarding the product category and enhances their informativeness before making a final decision. One of the lowest factors with 9.3% is no or low shipping cost, which can be an important factor when customers want to order something rare and vintage, mostly from abroad but the overall ratio of this kind of purchases are much lower than the regular ones. The possibility of multiple payment options was the least reasonable factor from the point of view of respondents being only 2.7%.
35%
44%
16%
5%
How often do you make purchases online?
( through PC, mobile, etc.)?
Once or more per week
Twice or more per month
Once per month Few times per year
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Figure 4.1. 7 Main reasons for customers to make purchase online Survey: Own research, number of participants =171.
Figure 4.1.8 implies to investigate whether customers would like to share their personal information to have the personalized customer offer or not. The question was presented in the form of scales, where 1 – absolutely not, and 5 – absolutely yes. As it can be observed, around 54% of respondents ready to share their customer data for the personalized offers. It can be explained by the fact that usually there is a broad spectrum of products in online stores, and personalized offers can be very useful for the customers to find inspiration for their purchases.
Moreover, personalized experience will ensure seamless customer journey and better customer service. On the other hand, a bit over 29% of respondents remains neutral on sharing their personal data. This can be explained by the permanent mailings from the companies to the customers emails. The remaining 17% found it wise to not share their customer data. This can be supported by the customer behavior of some category of Russian consumers that are not making unnecessary purchases and buying only products they need. To conclude, we can say that consumers of Kaliningrad who took part in the survey mostly have a positive attitude towards the omnichannel model and towards providing data to companies to improve their customer experience.
Figure 4.1. 8 Respondents' attitude on providing personal customer data to get personalized experience.
Source: Own research. Number of respondents 171.
9% 8%
29%
37%
17%
0%
5%
10%
15%
20%
25%
30%
35%
40%
1 2 3 4 5
Would you like to have a personalized customer experience in exchange for your personal customer
data? (1–absolutely not, 5–absolutely yes)
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Figure 4.1.9 represents the category of goods and services that customers buy more online. In this question customers had the opportunity to choose multiple categories that they buy online more often. The bar chart displays that the most popular category was Clothing. Around 52%
of respondents noted that they buy clothing more often. Then in the second place Food and drink grocery sector with slightly less results of 42%. By 10% lower from the leader. Around 38% are books, videos and games category, which is reasonable because nowadays many people are buying e–books from the platforms like Amazon, eBooks, watching movies from the online streaming services like Netflix, Okko and buying video games from the online cloud marketplaces like Steam and Epic Games. Around 27% are hygiene and cosmetic products, including perfume, medical and decorative cosmetics. Slightly less was household and cleaning products being about 21%. The smallest category in the Kaliningrad market was construction materials like furniture, fire hitting products etc. and electronics like smartphones notebooks.
This can be explained by the habit of Russian customers to contemplate on a big purchase for a longer time and their preference to immediately see the physical product for which they are making a payment.
Figure 4.1. 9 Category of products or services customer purchased more online Source: Own research. Number of respondents 171
Figure 4.1.10 below illustrates the main media sources, from where the consumers usually getting to know and finding inspiration to make the purchase. As per the bar chart, we can conclude that most of the respondents discovers about products/services from the retailer’s mobile applications. This is obvious, because the mobile channel is the most popular for customers to make a purchase. Thus, it is essential for the retailer to develop a mobile application to provide inspiration for the customer for the purchase. Next two are social networks/blogs and retailer’s online store with 24.9% and 23.8% respectively. Social networks like Instagram are now actively being used to promote brands and retail stores of any sector:
food, some rare drink, mostly clothing and footwear. Next is Advertisement which can be done by steaming channels as well as search engines or social networks in form of contextual ads.
Again, very popular way of product/service promotion these days applied by the companies.
And the last 2 channels are online magazines and electronic mailing from retailer. Online magazines are not so popular for now, and they cannot compete with the social networks for example. What relates to the mailing, people mostly considers email services as a working tool.
Therefore, mostly mailings may be perceived as spam.
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Figure 4.1. 10 Main online channels where customers get inspiration for their purchases Source: Own research Number of respondents 171
Figure 4.1.11 illustrates the importance of factors that the online store should have for the customer to have a good purchasing experience. As it can be seen, almost all the factors have importance for the customer and their experience while purchasing via e-commerce platform.
Clear description of the product, high quality photos and videos as well as ability to get bonuses significantly influences the customer to have a decent experience. Friendly interface and multiple payment methods are important to have a positive experience. Moreover, around the third of respondents noted the delivery method as not so important, representing 39 responses.
Figure 4.1. 11 The importance of factors for the customer to have a good purchasing experience Source: Own research. Number of respondents = 171
The last figure for the quantitative analysis of the thesis indicates the customer behavior related to main approaches of the omnichannel model. As per the bar chart in Figure 4.1.12 we can examine, that customers appreciate the existence of loyalty programs and specialized offers as well as multichannel customer service to communicate with companies and make purchases.
Moreover, from the survey we can support the statement at the beginning of the Chapter 4, that customers more are likely to buy from the seller where they had better experience even if
24.9%
28.3%
23.8%
17.0%
3.6%
2.40%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Social networks and blogs E-retailer mobile app E-retailer online store Advertisement Media and magazines Electronic mailing