Customers’ Perceptions and Usage of Online Retailing Services in Nairobi County, Kenya

In spite of the huge increase in internet usage in Kenya over the past years, the usage of online retailing services in Kenya is still very low, thereby posing an existential threat to the service providers. To induce more initial users to continue using these services, there is need to establish what affects their continued usage. Individual factors, in particular customer perceptions, have been shown by both the information systems (IS) as well as the marketing fields to have significant effect on sustained use of online retailing services. This study therefore sought to establish the effect of customer perceptions on the usage of online retailing services in Nairobi County, Kenya. Its objectives were to establish whether there is a relationship between perceived attributes and usage of online retailing services, to determine whether there is a relationship between perceived risk and usage of online retailing services, to analyse whether there is a relationship between perceived value and usage of online retailing services, to evaluate whether customer satisfaction has a mediating effect on the relationship between customer perceptions and usage of online retailing services and to establish whether customer demographics have a moderating effect on the relationship between customer perceptions and usage of online retailing services. The study employed a descriptive, cross-sectional, survey design and explanatory design. The target population was 6 online retailing firms and the respondents for this study were the 18,147 registered users of these six online retailing firms in Nairobi County, Kenya. A sample of 391 respondents was selected using multi-stage sampling methods including purposive, stratified and simple random sampling. Primary data was collected using a self-administered structured questionnaire and an interview guide, while secondary data was collected through document review. Questionnaire responses were analyzed using descriptive and inferential statistics which involved both linear and logistic regression analysis. Figures and tables were used to present the data. Data from key informant interviews was analyzed using content analysis technique to complement the quantitative data. The results showed that consumer perceptions have a significant effect on the usage of online retailing services. The study also found that customer satisfaction does have a mediating effect on the customer perception – usage relationship. Furthermore, the research established that demographic factors do not have a significant moderating effect on the customer perception - usage relationship. The findings of this study underscore the importance of customer perceptions and customer satisfaction in enhancing the likelihood of success of online retailing services. Consequently, the study recommends that online retailers should enhance service features/attributes as a way of ensuring success of their services by taking into consideration customer-specific needs by personalizing the website to make it more useful, compatible with customer requirements and easy to use for users. In addition, online retailing service providers need to build trust amongst their users regarding online purchasing. Further, online retailers should design and deliver a unique value proposition that has both functional as well as hedonistic appeals. Online retailers should also have an effective customer satisfaction strategy for purposes of customer retention. Moreover, it is imperative for online retailing firms to have a good understanding of their target customers, since this will not only help in determining the appropriate customer engagement strategies but also how to enhance the long-term usage of their services. On the government‘s part, the study recommends the tackling the barriers to online shopping usage primarily through legislation. Since usage also hinges on trust, the government could license a suitable entity to oversee online consumer protection to address users‘ concerns.