PROJECCT updated

CHAPTER ONE INTRODUCTION 1.1 Background of the Study Online service delivery has strategic implications for businesses attempting to deal with customers in the electronic marketplace. It is even more important than low prices and web presence as online customers are provided with more product or service choices with reduced cost. Therefore, e-retailers need to understand the perception of customers regarding their services delivery and the way the customer evaluates them. It is vital to have a clear understanding of how new internet users perceive the service delivery of the various online stores. According to Esiri (2015), about 48 percent of the online shoppers are between the ages of 18-35. From this data, it may be implied that newly married persons and youths are more interested in buying online than any other group while those that are above 40 years are less interested in shopping online and probably prefer shopping offline or are not interested in shopping at all. It has also been stated that males prefer to shop more than females representing a difference of 19 percent from females. In addition, males spend more time shopping online than women and they are more likely to convert to customers than females. Out of the total e-commerce visits, 45 percent are estimated to be new visitors, whereas the remaining 55 percent are returning visitors. One of the reasons for the considerably good percentage of returning visitors owes largely to the fact that customers were happy with their previous shopping experiences in terms of services rendered and would therefore want to buy some more items. Online shopping has been experiencing a rapid growth over the years in Nigeria. This is due to its unique advantages to both consumers and retailers such as shopping round the clock facilities, decreasing dependence to store visits, saving travel costs, increasing market area, decreasing overhead expenses, offering a wide range of products and wider coverage, access to discounted product and price splash, flexible internet service provided by the various telecommunication. The percentage of online population ordering goods over the internet is increasing every year as well as the numbers of online stops (Ayo, Adewoye & Oni, 2011). . Online service delivery is trending in the Nigerian e-commerce industry. Therefore the industry stakeholders should ensure quality of their services in terms of availability, accessibility of a variety of product, product information. They should also guarantee customer security and privacy protection (perceived risk), acceptable delivery fees, prompt delivery processes, enviable shopping experience, good service quality, and they should equally ensure order fulfillment connected to customer perceptions and customer expectations. The typical internet users of the twentieth century in Nigeria are majorly young, professional, affluent with higher levels of income or disposable income, having higher education and are abreast with the trends in the social media. They value time and their convenience which automatically increase their propensity to shift from visiting stores to virtual shops (Garg & Goel, 2015). Research has noted that one major reason why people have not completed an on-line retail transaction is because consumers are just trying the internet shopping experience without any intention of making a purchase. This is due to the issue of perceived risk of online service quality. Common reasons for purchase reluctance are the difficulties and costs of distance shipping, inadequate amount of purchase or product related information, troubles experienced after the purchase such as delivery or refund problems, general security fear, and various perceived risks such as financial, product-related or psychological risks. The online consumers desire the online sellers to be willing and able to act in the consumers’ interests, to be honest in transactions (not divulging personal information to other vendors), and to be capable of delivering the ordered goods as agreed. Online stores must deliver superior service experiences to their customers, if they want the growth of their businesses and if they expect customer repeat patronage and eventually their loyalty. After all, poor service delivery has been shown to account for 80 percent customer complaints about online stores. Therefore, online retailers should focus on offering high quality products and services delivery (Rao, 2011). A distinctive aspect of the online service delivery is its ability to expedite information exchange and improve information accessibility for customers in terms of products information and markets for e-retailers. While consumers frequently use the internet to gather information about products, many are still considering the option of purchasing off-line, depending on the perceived reliability of product information and perceived risk making physical shopping to be more attractive to many people. Online shopping eliminates the experiential aspect and recreational advantage of shopping, but it increases the possible choice set. There is an emerging tendency for people to view goods at a shop and then buy them online at lower prices. There are several important reasons that explain why consumers choose to purchase goods online, including at-home convenience, 24hour/7day availability, low prices, product information availability and others experience. The Nigeria population is on the rise. The nation's current estimated population of over 170 million people is currently growing at a rate of 2.7 percent annually, and has a median age of 18.6 with 84 million people under the age of 20years (Phillipsconsulting, 2014). This makes Nigeria the largest consumer market in Africa generating high demand for mobile phones, personal computers, iPads, that would be used to access the internet and shop online for personal cares, household items, and grooming products among others. A report by Paypal has said, their platform is the most popular way Nigerians pay for cross-border online purchases and 55 percent of Nigerian cross-border shoppers have used it for purchases in the past 12 months. According to PayPal, the country’s consumers spent N128.1 billion in 2015 via online shopping, targeting N172 billion by the end of this year (Nnabugwu, 2016). Online trade like retail e-commerce business is rapidly developing in Nigeria, with the likes of Jumia, Konga, Gloo, Buyam, and more are springing up by the day. A few of them have attracted foreign capital to expand their business across Nigeria, while others are still struggling to survive, owing to low patronage as a result of high cost of bandwidth in accessing the internet, as well as limited developed online contents that should drive e-Commerce business in Nigeria. (Thisday, 2014). 1.2 Statement of Research Problem From various shoppers’ experience, there could be a service delivery gap usually in terms of the retailer’s little understanding of what prospective customers want, how they want it, as well as how to cater for them satisfactorily. This is because the transaction goes through communication a network platform which is done without any physical contact between the retailer and consumers. The retailers might lack the knowledge or better understanding of what the prospective customers specifically wanted or preferred either as a result of the limited product information and attributes they uploaded or as a result of not constantly updating information regarding the available product items. In a competitive market place, and with uncertainty in the growth of online stores in Nigeria, understanding of customer perception towards e-retailers need become an important factor. Previous researchers have dealt with satisfaction but customer perception is also of great interest to practitioners because of its important effect on customer retention and their efficient service delivery. Retention, perceived risk, good shopping experience and superb service delivery is a major challenge particularly in e-commerce base services, as customers can easily switch from one service provider to another or to a physical store at no cost. Considering the high costs of acquiring new customers and apparently high customer turnover of many e-commerce stores, there is a clear need to develop a better understanding of how consumers evaluate these services and develop customer retention and loyalty. Service delivery is one of the main factors determining the success/failure of electronic commerce. Therefore it is very important to understand customer perceptions towards online service delivery. 1.3 Research Questions Since the introduction of e-retail shops in Nigeria, online shopping by the use of the internet has attracted little direct research attentions so far. Electronic commerce has become more important because marketers have some basis to market their product and services to the internet channel anytime of the day. It is more effective and profitable for marketer to serve their customers if they are concerned and if they understand their customers’ needs and wants. The whole process of online shopping is through the internet. In the virtual environment, there are many uncertainties which are beyond the control of consumers. Other issues include; poor product information, privacy protection, risk, order fulfillment and after-sales service. Some people believe that these problems could directly influence their perception in adopting online shopping. Judging from previous experiences, many people believe that it is too complicated to process online shopping and that it is impossible to physically check the quality of the merchandise. Moreover, fraud has also become a serious issue that has beset consumers. As an illustration, it is important to investigate the perception of online shoppers and services offered by e-commerce in order to present it as a major player in the Nigeria online shopping market. Customer perception is a critical issue in the success of any business system and gaining customer loyalty, either brick wall store or online shops. In a turbulent e-commerce environment in Nigeria, in order to sustain the growth and market share, ecommerce companies need to understand how to satisfy their customer with efficient service delivery because it’s critical for establishing long term client relationship. We identified the following as a determinant of consumers buying decision which affect their perception of online service delivery as: product description & understanding, shopping experience, perceived risk, and service quality. Thus, the research questions of this study may be formulated as follows: 1. To what extent does product information/understanding affect customers’ perception of online service delivery? 2. How does the online shopping experience of customers affect their perception of online service delivery? 3. How does the quality of service offered by online stores affect customers’ perception of online service delivery? 4. How does the customers’ perceived risk of online shopping affect their perception of online service delivery? 1.4 Objective of the Study In spite of the increasing culture of online shopping and increasing number of the online stores in Nigeria, there appears to be not enough literature that have examined perceptions of customers towards online service delivery. Obviously, this has created a research gap that needs to be filled. Therefore, the main objective of this paper is to examine the customers perception of online service delivery by the various e-commerce shops in Nigeria. In alignment with the above formulated research questions, the following specific objectives may be derived; 1. To find out to what extent customer’s understanding/information about the product affects their perception of online service delivery. 2. To determine the effect of customers online shopping experience on their perception of online service delivery. 3. To confirm how the quality of service offered by online stores affects customer’s perception of online service delivery. 4. To ascertain how the customers perceived risk of online shopping affects their perception of online service delivery. Importantly, this research will make an important contribution to address challenges face by online shoppers in the e-retail industry in Nigeria, thus extending our knowledge of e-commerce. 1.5 Research Hypotheses Flowing from the above stated objectives of the study, the following hypotheses may be formulated; Ho1: There is no significant relationship between customer’s understanding/information about a product and their perception of online service delivery. Ha1: There is significant relationship between customer’s understanding/information about a product and their perception of online service delivery. Ho2: There is no significant relationship between customer’s online shopping experience and their perception of online service delivery. Ha2: There is significant relationship between customer’s online shopping experience and their perception of online service delivery. Ho3: There is no significant relationship between quality of service offered by online stores and customers perception of online service delivery. Ha3: There is significant relationship between quality of service offered by online stores and customers perception of online service delivery. Ho4: There is no significant relationship between perceived risk associated with online shopping and customer’s perception of online service delivery. Ha4: There is significant relationship between perceived risk associated with online shopping and customer’s perception of online service delivery. 1.6 Scope of the Study The study focused on Students, staffs of both Federal and State ministries, departments and agencies (MDA) in Benin City, Edo state. University of Benin, Ugbowo, Federal Neuro-Psychiatric Hospital, Uselu, Edo State Board of Internal Revenue Office, Uselu, and Edo State Broadcasting Service, Aduwawa. They were randomly selected due to their high internet penetration rates and they are affluent with higher levels of income or disposable income, with higher education. The above MDAs were preferred because Edo State is a civil servant state and their staff employment and student admission policies are based on Nigeria’s Federal Government Character Commission which ensures that people from all states in the federation are consider for employment and admission. Lastly, they are professionals who value their time and convenience due to their work ethics, which automatically makes them likely to shift from visiting stores to patronizing virtual shops. 1.7 Significance of the Study It will ensure that e-retailers have better understanding of their customers and also retain them, create brand loyalty and efficient service delivery. It will be of great importance to management teams of e-retailer firms to enable them modify their business processes and strategies that will result in reduction of consumers’ perceived risks and improved customer shopping experience thereby creating a viable customer base. The study will help online stores to identify the perception consuming public have about the services delivery they are providing. Satisfaction of the customer is the prime occupation of the e-retailers, thus this study will provide evidence for the upgrading of these services. Also, the study through the examination of service quality and perceived risk will enable the e-retailers to judge its performance in the light of how customers judge it. The present study is relevant because it gives a clear picture of the status of online markets in Nigeria and the emerging trends in this particular field. The study is concentrated on urban customers to identify their perceptions towards online shopping among different students and professional groups as well as income groups and with respect to consumers in Benin City, Edo State, Nigeria. The findings will assist e-retailer stakeholders including service providers and the government in designing policies that are geared towards enhancing and sustaining the use of online services delivery in Nigeria. This will reduce the possibility of failure arising from low usage as it will enable online retailing companies to provide their services sustainably. 1.8 Limitations of the Study The research scope was limited to a certain demographical group in the above stated MDA’s who are income earners, internet users within a period of two (2) years. The unit of analysis includes individuals who had at least purchased online once in the last twenty four (24) months at the moment of data collection. The reasoning behind this choice lies on the findings on e-commerce literature that suggest separate populations’ potential to get a wider opinion of the consumers’ views in other to get varied opinions and to capture repeat customers, based on their online shopping experience. CHAPTER TWO REVIEW OF LITERATURE 2.1 Introduction Currently, online shopping is getting huge attention from a range of organization and customers due to the fact of fast growing Internet development in Nigeria. Online shopping, as a part of E-commerce, is becoming a tendency in most developed country including Nigeria. Moreover, we are witnessing a change from our manual services delivery to an electronic era where almost all activities can be done using technology. For instance e-Shopping, e-Business, e-Supply Chain, e-Market Place, e-Payment, e-Entertainment, e-Ticketing, e-Learning, e-Recruitment and e-Government. Internet has opened up more business opportunities. This is because of its ability to give more business chances in cyber market or to connect people in this world borderless. Consumers can order goods and services wherever and whenever they want, 24 hours a day, 7 days a week without have to worry about the shop service time, time zone and even traffic jam. This created chances for businessman to enter online businesses. The fact about development of online shopping shows changes in customer perception in shopping online as another alternative to fulfill their daily needs. This gave rise to consumer control and power, according to Perkins & Fenech (2014) Consumers’ power is consolidating with improving access to information, ever widening choice of goods and services, and opportunities to share their experiences more widely. As a result, consumers have become more demanding and many are now more sceptical about the ability of big e-retailers to keep their promises relating to their services delivery. Also Delafrooz, Paim, Haron, Sidin, & Khatibi. (2009) stated that, the usage of internet in the contemporary era is no longer limited as a networking media, but it is also being used as a means of transaction for consumers in the global market. Which made Gurvinder & Zhaobin (2005) describe in their articles that internet is changing the way consumer shop and buy goods and services; it has rapidly evolved into a global phenomenon. They also stated that consumer are using the internet not only to buy products but also compare price, quality ,features ,after sales services, delivery period offered by online stores. The internet is “anytime, anywhere” media and the expanding power of the internet has brought forth a new generation of interaction platform between humans and computers. The current technological development with respect to the internet has given rise to a new marketing system called online shopping. Online shopping or e-shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser. Michael Aldrich is the man who invented online shopping in 1979. With the Increasing internet literacy, the prospect of online shopping and the called for improved quality of service delivery is increasing in Nigeria. An online shop evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping center; the process is called business-to-consumer (B2C) online shopping. As sited by Puranik & Bansal (2014), online shopping has been emerged quite recently as a medium for transactions between consumers and firms. Online shopping promotes open communications and provides a virtual interactive environment where the suppliers and customers can exchange information and products (Gunasekaran and Nagai, 2005). According to Jayasubramanian, Sivasakthi & Ananthi (2015), online shopping has truly revolutionized and influenced our society as a whole and has opened new doors and opportunities that enable for a more convenient lifestyle, quick service and reduced prices which were the three significant ways in which online shopping influenced people from all over the world. Counts of the largest of these online retailing corporations in Nigeria are Jumia Nigeria, Konga.com, Kaymu.com and Yudala.com etc. Retail success is no longer all about physical stores, this is evident because of the increase in the number of retailers now offering online service delivery for consumers. Nowadays, electronic retailers are using technology to convert “touch-and-feel” attributes of physical stores into “look-and-see” attributes (Weitz, 2010). Online shopping provides a start to end services on their website and transacting online and home delivery service. Companies are using effective marketing strategies to analyze various factors to convert potential customers into active ones and retaining them as well. According to Jayasubramanian, Sivasakthi & Ananthi (2015), online shopping has truly revolutionized and influenced our society as a whole. This use of technology has opened new doors and opportunities that enable for a more convenient lifestyle today. They also states that, product variety, quick service and reduced prices were three significant ways in which online shopping influenced people from all over the world. With the evolution of online shopping in Nigeria which is currently trending, a lot of Nigeria internet users are very attached to online shopping and spends their time looking into and fantasizing about online products. They are attentive towards sales promotions and are influenced by celebrities when it comes to fashion (Hill, Beatty, & Walsh 2013). A recent research found that almost half of the respondents were spending a minimum of one hour every day on online shopping websites. It was also found that men’s fashion, mobile phones, home appliances has led more men to participate in online shop (Lachman & Brett, 2013). Overall, customer’s perception plays a very important role in online shopping and this phenomenon is continuously growing. A report by Bizcommunity.com, states that Nigeria online shoppers purchase online more often with 64 percent saying online shopping is advantageous with another 83 percent regularly using the mobile shopping application for specials and/or product searches (Bizcommunity, 2016). They also state that, online shopping is mostly dominated by a growing young internet-savvy generation, who are price conscious and can easily do their research online to compare prices and deals. Although 58 percent of those surveyed prefer traditional shopping, 78 percent believe they will shop more online in future. They concluded that, Nigerian consumers are experienced shoppers who are organized and shop from a list as well as compare price. The growth of online shopping is encouraged by the different devices and internet option available which enable them to search and eventually purchase online (Kanwal, 2012). He also state that, those who are using internet from 5 to 7 hours a day were found to be adopter of online shopping and they consider price consciousness, convenience, product variety, easy payment options and found out that trust is one major challenges of online shopping. These are the factors found to be a significant in online shopping. Without rush traffic and vehicles one can purchase a huge variety of product by spending minimum timing. Another study by Thangam, Karthikeyan & Nandhini (2015), brought to the fact that most of the online shoppers are students and educated people, professional who have a positive perception towards online shopping; they are particularly concerns about some perceive risk, online security poor service delivery by some online store. They recommended that, online shop should ensure adequate quality service delivery which will be considered as a milestone for online sellers to increase their sales. They should rectify these problems and also introduce more number of products reviews and their information. This will create more demand from customers. Some of the dominant factors which influence consumer perceptions of online service delivery are product information, ease of use, perceived risk, satisfaction, trust (security/privacy), and quality service delivery. The examination of issues related to customer perception of online service delivery is a wide area covering a number of different elements. In that sense, different aspects should be taken into consideration, e.g. product information, perceived risk, trust, repurchase intentions, previous experience and online environment e.tc. In doing so, marketers offering Web-based shopping should provide a convenient, safe, and pleasant online shopping environment, appropriate to addressing shoppers’ functional goals (Bridges & Florsheim, 2008). Online customers have a different perception of specific online shops and their website; these factors have a crucial influence on online customer perception of online service delivery. 2.2 Customer Perception towards Online Service Delivery The concept of customer perception was created by their experience on how they observe the service offered by the online stores and in the end whether they actually satisfied with the experience or not. One way of competing more successfully for small businesses in this era of internet development is by presenting superior service delivery (Wilson, Zeithaml, Bitner and Gremler, 2008). The whole process of customer perception is made up of three different stages names exposure, attention and interpretation stage (Yee & Yazdanifard, 2014). The brain does the work of stimuli in the attention stage and interprets the stimuli according to the previous experience and what the individual desires in the interpretation stage (Solomon, Bamossy, Askegaard and Hogg, 2006). They also state that, the customer sensory perception relates to how they perceive and process sensory stimuli through their five senses; and how they form opinions about online stores and the quality of service they offer through the online shopping process. When the customer’s experience exceeds their expectations as per service offered, there is a high chance they will become loyal towards that particular online shop, this brings about their satisfaction towards their service delivery. Their perception is based on a number of features such as: how fulfilling the experience was, how smooth the transaction was, and the ease of interaction on their webpage alongside product information and reviews. Also, the shopper’s perception will also vary depending on what kind of product they are looking to shop online. For instance, the products which require searching, information gather before shopping online (such as books, gadgets, electronics) will be different from products that are shop through experiences (such as clothing, furniture). Therefore, it is only when the customers’ perceptions of the business, the products and the services are known; that you truly know whether or not the business is going in the right direction. All interactions that occur between the customers and the business will ultimately affect the customers’ view and image of the online store service quality. Also, online shoppers’ perception will vary depending on the type of product because the risk factors are different for each other. Some other factors which may affect the perception of online shoppers towards their service delivery are: how exposed they are to the market, market ambiguity and the position of competitors in the market (Gong, Stump, and Maddox., 2013). A study by Al-maghrabi and Dennis (2010) states that, online shopping continuance intentions indicated that perceived enjoyment, usefulness, and subjective norms are determinants of online shopping continuance among consumers. Results of the study also show that users who are comfortable with the Internet are more likely to continue online shopping. 2.3 Product Information Internet has made retail business easier to start compare to that of brick and mortar settings. This has given rise to the emergence of new online sellers jumping into the market. In order to survive in this fierce competition, online shops have been striving to make shopping on their sites functional as well as entertaining by providing shoppers with accurate information about their products for quality service delivery. It has given online stores a better way of marketing and selling their products. It helps e-retailers to show the product pictures, price comparison and users' reviews to customers. With such offerings customers can shop easily and smartly without even going to the stores (Puranik & Bansal, 2014). As opine by Rajesh & Urushothaman (2013) consumer shop online from e-retailers base on the information provided such as; offers and discounts, variety of product available, specify delivery period and user friendly website. Also, customers shopping online do not feel the product physically. They only see the product features and images in e-stores. In e-stores, consumers may develop low trust and perceive elevated highly risk because of the lack of physical sense (looking, touching, tasting and smelling) and unclear information and the quality of the product (Khan, Liang & Shahzad, 2015). According to Tahyudin, (2012), product information provided by online shops has a significant influence on their customer to shop online. The existence of this influence showed that such information (product information, product quality & product pricing, product review) are of great importance to the consumers. This will increase the chances of those online stores whose information and product comments can easily be review. As sited by Milan, Bebber, Toni & Eberle (2015), shopping for product on e-stores, the customers incur cognitive “costs” (searching costs, transaction costs and switching costs) (Yen, 2010; Shih, 2012), it is important for them to provide a great quantity (volume) of information. He also sited Cao, Zhang and Seydel, 2005; Ou & Sia, 2010 as saying that, the quality of information available by the website is a factor of great importance in the evaluation that the customer does about the online shop website, allowing that, from the available information, the customer can evaluate the product and the e-retailer service that is being offers too. As opine by Puranik & Bansal, (2014) that the desired information at right time makes the desired impact. Also, well described, clear and updated information on the e-shopping websites motivates Internet users to shop online. Also, customers will give preference to those online stores where price and delivery schedule are clearly mentioned and where secured transaction information is a must. 2.4 Shopping Experience The emergence of Internet in Nigeria has changed consumption habits and provides convenience for online shopping, e.g. using the Internet makes it easier to compare prices and features of different products/services over by online shops. For consumers, online shopping offers a shopping experience different from that of physical-based shop such as convenience, search cost, round the clock shopping, home delivery, and discount price e.tc. shopping online include a number of experiences such as information search, web site browsing/navigation, ordering, payment, customer service interactions, delivery, post-purchase problem resolution, and satisfaction with one's purchases (Ha and Stoel, 2009). As sited by Wang & Yang (2010), consumer’s online activities are very easy to be affected by their experience from online store service delivery, previous online experience left positive or negative impression in customers‟ memory in some extent, this impression highly influence consumers‟ perception (Wolfinbarger & Gilly, 2001, p.44;). Customer shopping experience according to Gentile, Spille & Noci (2007), is made of capacities of various engagements (sensory, cognitive, emotional, pragmatic, and relational) to participate in satisfying and value-creating interaction with online shops and their service delivery. In another view, they also states that customer shopping experience encompasses the multidimensionality of customers’ involvement with their shopping process of sensory (sight, hearing, touch, etc.), cognitive (creativity and problem solving), pragmatic (usability), emotional (moods and feelings), and relational (social) levels. Wang & Yang, (2010) opine that online shopping experience could affect the consumer’s perception which will decides if the consumers can convert such into shopping online. Furthermore, a bad shopping experience from the customers could be harmful for the image of the online store and affect the customer perception toward the online store. Building from above insights, we can agree with the definition of Gentile, Spiller, and Noci (2007) which states that customer experience originates from a set of interactions between the customer and the e-retail shop, which will determine their retention or re-shopping online. This experience is strictly personal and implies the customer’s involvement at different levels of their process of delivery their service (rational, emotional, sensorial, physical, and spiritual)” (Gentile, Spiller, and Noci 2007, p. 397). From another point of view, “shopping experience is the internal and subjective response customers have with an online store either direct or indirect contact. Direct contact generally occurs in the process of shopping online and is usually initiated by the customer. Indirect contact most often involves unplanned encounters with information about online shopping service delivery and takes the form of word-of-mouth recommendations or criticisms, advertising, news reports, reviews and so forth.” (Meyer & Schwager, 2007, p. 118). 2.5 Quality of Service In electronic marketplace, the pursuit of service quality is considered to be an essential strategy. Online stores are often faced with the challenge of examining their service quality from customers’ point of view. Quality of service offered by online stores is a complex matter since it is not easy to objectively determine due to the fact that it is only perceived and it is hence up to the customers to evaluate the performance. Therefore it is important for each e-retailer to conduct research about their service delivery so that the customer preferences about what is important and valued can be discovered and later enhanced. As opine by Gocek, Kursun and Iridag-Beceren (2007), they state that one of the factors online customer perceived important is the quality of service offered by the online shop. They measured quality of service with five (5) factors; which are i) tangibility, ii) reliability, iii) responsiveness, iv) assurance, and v) empathy as postulated by Parasuraman, Zeithaml and Berry (1985, 1988). Also, Markovic and Raspor (2010) opines that one of the main research instruments for measuring quality in online shopping service delivery is the SERVQUAL model, developed by Parasuraman, Berry and Zeithaml (1985; 1988). This measurement is achieved through a comparison between customers’ expectations for how they should be provided a service by the online shop and what they ultimately obtain. Which made Lai, Chen and Lin (2007) in their study suggested that when customers perceive better quality service delivery by an online shop, such as special treatment benefits, they will have greater online shopping experience. Therefore, such an experience of the consumer on the particular online shop will influence the customers’ shopping intention. According to Swaid & Wigand, (2009) SERVQUAL model is widely adopted to measure quality of service because it considers service quality as a multi-dimensional construct consisting of five dimensions: tangibles, reliability, responsiveness, assurance and empathy. Reliability raises the issue of the ability of the online store to perform promised services at the promised time, accurately, and dependably (Arizon, 2010). He also state that Assurance addresses knowledge and courtesy of online store and their ability to convey trust and confidence to their customers as related to their service delivery. While Tangibles: refers to accuracy of product information and review in relationship to the item display online which creates foremost information. Responsiveness means the willingness of the organization to assist customers and provide prompt services (Arizon, 2010). It can be measured by the amount of time needed to deal with customers’ reported problems and the response duration once the customer filed a service request (Santhiyavalli, 2011). And lastly - Empathy: In a word, empathy refers to individual attention and employees’ understanding of each customer’s needs (Arizon, 2010). Empathy creates an emotional relationship with customer, providing customer a touch of importance for business. This leads to retention and creation of new customer’s pool (Wieseke, Geigenmüller & Kraus, 2012). Quality of service looks at the difference between e-retailer performance and customer expectation; which results in measurement of perceived service quality by highlighting the gap between them which could be stated as (Q = P-E). Therefore, an empirical research is needed to shed light on the detailed determinants of online shopping quality of service delivery and its impact on the perception of customers in the online environment. This is to reflect the limitations of the existing literature to provide a conceptual model for e-SERVQUAL. This study proposes that e-SERVQUAL consists of customer perception of product information quality, shopping experience, transaction capability, payment, security and privacy, expected delivery and expected customer service. 2.6 Perceived Risk The Internet has grown from its first commercial use in the early 1990s to being used by almost 27 percent of the world's population in just under 20 years (Howe, 2012). As the Internet continues to makes its reach into homes and businesses across the world, the opportunities for online shops will expand. However, with great opportunity comes an equally great challenge for both online shops and consumers alike. With the growth of online shopping, where people can buy almost anything at any time and from anywhere, consumers have to deal with risks they perceive about the product, the buying process or their service delivery. The rapid growth of online shopping in Nigeria emphasizes the importance of focusing on the issue of customer perceived risk as a key factor for discussion when strategizing towards the growth of online stores. It’s also important to convince consumers that e-retailers are reliable; this will reduce customer's perceived risk towards the online stores. Also 'prior experience' and ‘knowledge about seller' are identify as essential parameters. Consumers' online shopping experiences and fulfillment of quality of service offered by the online store as expected are components of successful online transactions (Puranik & Bansal, 2014). Perceived risk is a consumer's belief about the potential uncertain and any negative outcomes from the online shopping service delivery. In trying to understand the consumer perception toward shopping online through internet, it seems that risk is considered as one of primary concern by online shoppers. Online shopping is not the perfect solution; many still see disadvantages associated with shopping online. Consumer perceived risk, is consider as one of the biggest reasons that refrains many from shopping online (Tan, 2012). In another study by Olusoji, Ogunkoya, Lasisi, & Elumah (2015), perceived risk is negatively related to trust in online shopping which means that when online shopper perceive risk in their shopping online, this will reduce the trust they have on online vendors and ultimately may lose interest in getting acquainted with the online method of shopping. A study by Ariff et al. (2014), listed three types of perceived risk experiencing by consumers in online shopping; they are product risk, financial risk, and non-delivery. Their report stated that, the aforementioned negatively affected consumers‟ perception towards online shopping and among the three of them; financial risk has the strongest negative influence on online shoppers. Thus, online sellers should put more effort on minimizing financial risk in order to influence positive consumer perception to shop with them online. According to Hsu & Bayarsaikhan (2012), consumer’s perceived risk is high toward online shopping compare to brick and mortar shop. Their study results confirmed earlier studies revealed that perceived risk was a major barrier to shopping online and consumers mistrust online stores’ ability in protecting their personal information. From the above literatures, it was recognized that risk perceived by customers directly affect their online shopping i.e. when consumers‟ perceived risk is high, the possibility of consumer to shop online will be low. From the above, we could deduce that perceived risk will affect the customers’ perception towards online shopping (Lobb, Mazzocchi, & Traill 2006). 2.7 Conceptual Framework A growing body of literature proposes models for customer perception and many of these studies have tried to identify factors that lead to customer perception towards online service delivery. There are some factors which determine people’s view about online shopping for example, service quality (SERVQUAL) frameworks. There is a necessity on doing a research about the online service delivery and how it influences their customer; online shopping is a complex process that can be divided into sub-processes such as navigation, searching for information, online transactions, or customer interactions and delivery. It can be argued that customers are unlikely to assess sub-process individually in detail while they are visiting an online mall, but rather they perceive the service as an overall process and outcome. The following conceptual model is developed on the basis of prior researches presented into the literature review regarding customer’s perception towards online shopping factors. The purpose of conceptual model is to examine the customer perception of online shopping. This model examined the relationship between independent and dependent of online shopping. Based on the presented literature, the independent factors are product information, perceived risk (financial risk, product performance risk, and non-delivery risk), previous experience, and psychological factors (trust and security) while dependent factor is consumer’s online shopping service delivery. Figure 1: Researcher View: Conceptual framework of Customer Perception of Online Service Delivery. In the conceptual model (see Figure 1), online shopping experience acts as the independent variable and influences online shopping retention and re-shopping both directly and indirectly through its impact on perceptions of product information, perceived risk (financial, and privacy risks associated with online shopping) and quality of service. From the literature review, five variables/factors with corresponding hypotheses are derived and they are integrated to form the research model as shown in figure 1. The variables/factors are product information and review, perceived risk, prior online shopping experience, perceived merchants’ quality of service. From the research model outline, it is clear that the aims are to investigate the relationship between perception and intentions, the relationship between the chosen factors and perception towards online shopping service delivery. CHAPTER THREE METHODOLOGY 3.1 Introduction. This chapter examines the way the research work is carried out, the instrument used, research techniques, and the statistical tool used in data analysis. This is in agreement with the view of Omoankhanlen and Osagie, (2007) who state that research methodology highlights the methods that will be used in carrying out the research project and what strategies will be most effective and also help to develop a mental image of the structure for gathering data and also the method of analysis that will be used. This study is an empirical study, involving a survey required to gain insight into the typical experiences of online shoppers in order to arrive at sound conclusions of the their perception towards online shop service delivery. Leedy and Ormrod (2010) opine that this type of study is one that attempts to understand people’s perceptions, perspectives and views of a particular situation. 3.2 Research Design Research design is defined as “the ways of translating research problem into data that can be analyzed to provide the most valid answer to question” (Omoankhanlen & Osagie, 2007, pg. 43). In order to obtain data for the analysis, survey research design would be used. This design was used so as to get important information from staff and students of some selected organization in order to enable us investigate the perception of customers towards online shop service delivery. Primary data would be collected from the members of the sample that represent the entire population. 3.3 The Population and Sampling The sample for this study consists of Students and Academic staff of Faculty of Engineering in University of Benin, Ugbowo, Doctors and Nurses of Federal Neuro-Psychiatric Hospital, Uselu, Staff of Edo State Board of Internal Revenue Office, Uselu, and Edo State Broadcasting Service, Aduwawa Benin City, Edo State. The selected MDA’s were preferred due to their high internet penetration rates and they constitute typical internet users of the twentieth century in Nigeria. This is because majority of them are young, professional, affluent with higher levels of income or disposable income, with higher education, they are abreast with the trends in social media and e-commerce. In order to get a good representative size, the design for the sampling used for this study is both simple random and stratified random sampling. This method implies that every member will have equal chance of being selected into the sample because the population contained subgroups thereby necessitating a fair representation of these sub-groups in the sample size. Both sampling techniques would help to ensure that observations from all relevant strata are included in the sample (Lemm, 2010). Stratified sampling also guarantees that every possible sample matches the population distribution on strata-defining characteristics (Mallet, 2006). A total population of 8812 and a sample size of 383. The sample size was determined using Burley’s formula which was propounded by Yamane (1967) as cited by Omoankhanlen and Osagie, (2007) and it is relevant to this study where probability sampling is used. According to the formula, (n) is the sample size, (N) is the population size and (e) is the margin of error. A 95% confidence level and e = 0.05 was assumed for the equation in this study N n = 1 + N (e)2 ------------------------------------------------------------------------------- (1) For this study, N = 8812 e = 0.05 at 95% n = 383 respondents. Using proportional allocation, the sample sizes for different strata are as follows; Category Total Population Computation Number of Questionnaires University of Benin, Ugbowo 8414 383(8414/8812) 366 Federal Neuro-Psychiatric Hospital, Uselu 182 383(182/8812) 8 Edo State Board of Internal Revenue Office, Uselu 158 383(158/8812) 7 Edo State Broadcasting Service, Aduwawa 58 383(58/8812) 2 Total 8812 383 3.4 Operationalisation and Measurement of Variables Independent variables in this study are: Product information/understanding (constructs include price, image, brand, warranty, etc.) Perceived risks (constructs include product risk, financial risk, personal risk, non-delivery risk, etc.) Quality of service (constructs include service availability, customer service, home service delivery, pay on delivery, after sales services, etc.) Shopping Experience (constructs include around clock shopping, website features/processes, and discount price, return/refund policy, mode of payment, etc.) Dependent variable was: Online service delivery : buying of product online and delivery of same to the consumer 3.5 The Research Instrument The questionnaire method entails giving out of questionnaire to respondents to fill which had questions that were related to the variables of the study. The administration of questionnaires and collection for the study was through a direct survey. The survey was done on students and staffs of selected departments/unit in both Universities. The administering and retrieving of the study questionnaire will be done with the support of head of departments and units, so as not to disturb the respondents in their daily activities and duties. The questionnaire consists of two sections: A and B; section A is the first part which dealt with the personal data of the respondent with items such as sex of respondents, marital status, and educational qualification, name of institution, department/unit, monthly income and hours spent of Internet per day while section B dealt with the questions to be answered by the respondents to test the hypothesis and drawing of conclusions. 3.6 Source of Data This study used both primary and secondary sources of data. The secondary data were from the literature review described above while the primary data were collected through questionnaires administered to randomly selected academic staff of University of Benin, Ugbowo, doctors and nurses of Federal Neuro-Psychiatric Hospital, Uselu, staff of Edo State Board of Internal Revenue Office, Uselu, and staff of Edo State Broadcasting Service, Aduwawa Benin City, Edo State. This is because the researcher believes that this group of people had a certain level of knowledge about internet. They are income earners and are part of the major group of online shoppers. The questionnaire was developed in order to gather in-depth information for the measurement of the conceptual model’s constructs: product information/review, shopping experience, perceived risk and quality of service. 3.7 Method of Data Analysis Based on the questions to be analyzed and the nature of the hypotheses to be tested, data obtained using the questionnaire will be analyzed using regression analysis which attempts to investigate the statistical relationship between customer perception which is a dependent variable and is dependent on few independent variables such as product information/review, shopping experience, perceived risk and quality of services delivery. Department of Business Administration, Faculty of Social and Management Sciences, School of Post Graduate Studies, Benson Idahosa University, Benin City, Edo State, Nigeria. 29th August, 2016 Sir/Madam ASSISTANCE FOR RESEARCH INFORMATION Please, I am Ohwovoriole Oviri Precious, a master’s degree student of the above institution. I am carrying out a research on Customer Perception of Online Service Delivery. I solicit your assistance and co-operation in completing a copy of this questionnaire. I assure you that the information gathered will be handled with extreme confidentiality. Thank You. Yours’ faithfully, Ohwovoriole P. O. QUESTIONNAIRE Please read each question carefully and indicate your response by selecting the most appropriate option. Kindly tick the correct boxes that best suit your response. PART A: DEMOGRAPHIC PROFILE OF RESPONDENTS Name of Institution/Agency: …………………………………………………………… Department ………...…………………………………………………………….. 3. Gender: Male ; Female 4. Age: 15 – 25 years ; 26 – 35 years ; 36 – 45 years ; 46 – 55 years 56 years and above 5. Highest Educational Level: WASC/GCE O/L ; B.Sc./HND ; M.Sc./MBA ; Ph.D. 6. Monthly income: Less than N20,000 ; N20,000 – N 50,000 ; N51,000 - N100,000 ; N101,000 - N 150,000 ; More than N150,000 . 7. How often do you use internet? Very often ; Often ; Sometimes ; Rarely ; Never . 8. Have you ever had online shopping? Yes ; ; No . 9. During the last 24 months, have you purchased any product/service online? Yes ; No . PART B: PERCEPTION ON ONLINE SHOPPING Please select your level of agreement to the following questions; Strongly Agree (5) Agree (4) Indifferent (3) Disagree (2) Strongly Disagree (1) S/No Questions SA AG IN DA SD (5) (4) (3) (2) (1) Product Information 10 To what extend do you agree that the information given about their product on e-retailer shops is sufficient? 11 To what extend do you agree that it easy to choose and make comparison with other products while shopping online as compared to physical stores? 12 To what extend does product information (price and delivery fee) enables easy price comparism? 13 To what extend do you agree that the description of products shown on e-retailers website are very accurate? 14 To what extend are all necessary resources (such as product information, customer reviews or ratings and brand) accessible online? Perceived Risk 15 To what extend do you agree that it is risky for consumers to give their identity and credit card information when shopping online? 16 To what extend do you agree that it is safe to use credit cards when shopping online? 17 To what extend do you trust information from an online shop when compared to physical stores? 18 To what extend do you agree that the risk of not getting what you paid for refrain consumers from shopping online? Service Quality 19 To what extend do you believe that the product may come different from the image of the product specify on their website? 20 To what extend do you believe that online stores provide prompt service? 21 To what extend do you have any difficulties when shopping online? 22 To what extend do you believe that online shopping saves time, easy to use and it’s very useful Shopping Experience 23 To what extend do online shops satisfy customers shopping needs better as compared to physical stores? 24 To what extend has the online service delivery been able to ease your level of business transactions? 25 To what extend do the online shop provide product variety and recommendations that match your need? 26 To what extend do you consider that shopping online, does opinion of people I know important to you? 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