Abstract
The rapid advancements in information and communication technology during the third industrial revolution of the late 20th century has marked the beginning of a new era in the retail sector with the introduction of E-commerce. The dawn of the new century witnessed industry 4.0, revolutionizing all areas of online business by bringing in novel opportunities and possibilities. Despite the progress in technology, the determination of correct pricing on online selling platforms still remains a very complex task. The adoption of big data technology has enabled online sellers to make real-time price changes of high magnitude and proximity. However, with increasing awareness among buyers regarding modern pricing strategies, it is necessary to examine probable changes in consumer behavior when exposed to dynamic pricing scenarios. This study investigates the factors that influence consumer behavior, and their prospective online purchase decisions in a dynamic pricing context, through an exploratory factor analysis approach. A primary research survey was conducted, and 178 samples were finalized for data analysis through a series of web surveys completed by respondents in India. This study identifies, measures and classifies 27 research items into variables, namely shopping experience, privacy concerns, awareness about dynamic pricing, buying strategy, fair price perceptions, reprisal intentions and intentions for self-protection. These seven factors could be used to explain consumer behavior in a dynamic pricing situation.
Highlights
Since the third industrial revolution, information and communication technology has become widespread and the E-commerce sector has shown tremendous growth which outpaced the growth of the traditional retail business sector
Hair et al (2010) suggests that if the KMO value is greater than 0.6 and Bartlett’s test of sphericity is significant, factorability of the correlation matrix can be assumed; which, in other words, means the dataset is suitable for factor analysis
With a valid Bartlett and KMO test score, we were able to proceed with the exploratory factor analysis
Summary
Since the third industrial revolution, information and communication technology has become widespread and the E-commerce sector has shown tremendous growth which outpaced the growth of the traditional retail business sector. The worldwide sales of the retail E-commerce sector recorded 2.3 trillion US dollars in 2017, and is expected to rise around 4.88 trillion dollars by 2021 (Statista 2018). As per the Indian Brand Equity Foundation report, business in the Indian E-commerce sector alone was worth 15 billion US dollars in 2016 and is expected to reach 63.7 billion dollars by 2020. According to the PwC report on E-commerce in India (PwC Report 2014), online retail and online marketplaces are the fastest growing segments within the E-commerce space, and these are more than doubling in size every two years.
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