Perceived Risk and Trust on Online Shopping Behaviour in UK Retail Industry

This research proposal investigates the perceived risk and trust on online shopping behaviour in UK retail industry, with a focus on Tesco. It includes a literature review on online shopping, types of online risk faced by retail sector, and risk and trust associated with online shopping behaviour within retail industry.

POSTGRADUATE
DISSERTATION
RESEARCH PROPOSAL

Table of Contents
INTRODUCTION...........................................................................................................................3
Background..................................................................................................................................3
Background of the organisation...................................................................................................3
Research Argument.....................................................................................................................3
Problem definition.......................................................................................................................4
Research rational:........................................................................................................................4
Significance of research...............................................................................................................4
Research questions and objectives...............................................................................................5
LITERATURE REVIEW................................................................................................................6
Concept of online shopping in retail industry..............................................................................6
Types of online risk faced by retail sector...................................................................................7
Risk and trust associated with online shopping behaviour within retail industry.......................8
Necessary recommendations to overcome the challenges and risk involve in online shopping. 9
RESEARCH METHODOLOGY:.................................................................................................11
TIME PLAN..................................................................................................................................13
REFERNCES.................................................................................................................................14

Research topic: To investigate the perceived risk and trust on online shopping behaviour in UK
retail industry.
INTRODUCTION
Background
In the era of digitalisation, businesses use different online marketing strategy which in
turn causes positive impact to attract customers. However, at the time of pandemic, online
shopping increases because of strict lockdown imposed in towns and nations. So, it can be stated
that online stores usually enable shoppers to use search feature in order to find specific models
and brands. Moreover, online shopping is defined as a process of purchasing goods and services
from merchants who want to sell the items over internet (Rai 2021). On contrary note, it has been
analysed that some customers face trust issues while using online shopping because they filled
entire personal details and there might be risk occur from a third party. That is why, the entire
research highlights the observed risk and trust on online shopping behaviour in the retail industry
by using thematic data analysis method.
Background of the organisation
Tesco is one of the leading British multinational supermarkets. The grocery store was
founded on 1919 by Jack Cohen. Tesco’s headquarter is in Welwyn garden city, Hertfordshire,
United Kingdom. In terms of gross revenue Tesco is at third position. The company operates in
five European countries that are United Kingdom, Slovakia, Ireland, Czech Republic and
Hungary. In UK the supermarket holds 28.4 percent market share. Tesco also operates its
business through online mode and sold variety of different products to their customers. It has
more than 7005 shops located in different parts of Europe. Some of the subsidiaries of Tesco are
Jacks, one stop, F$F, Booker and Marko.
Research Argument
According to Yi, Yuan and Yoo (2020), online shopping is much more important part in
recent time and if the companies want to increase their market share it is vital for them to go
online and sale their goods and service. They also think that it has a great impact on customer
trust and loyalty. In contrast Mohseni and et. al (2018), online shopping is only good for those

company which has high turnover and deal in international market. Major customer base can be
reduce if they do not sale goods online.
Problem definition
The current study is based upon the online shopping and different perceived risk as well
as trust on the same. However, it is considered as a problem because trust breach might affect the
results of a company and breach the customer’s trust too. That is why, it is necessary for the
scholar to conduct study on the specific topic. If company loses their trust then it become very
difficult for them to attain their goals and objective in predetermine time. Gaining market share
and improving the goodwill depends upon how trustful the company goods and services
(Tandon, Kiran and Sah, 2018).
Research rational:
The major reason behind conducting the present investigation is to know the
effectiveness of online shopping and the risk that are involved while operating business online.
There are other two reasons as well for conducting research these are personal and professional.
In respect to the personal objective it will helps in developing academic skills while knowing the
importance of online shopping i recent time. This will also aids in understanding the risk that can
be face while operating business on digital platform. Another personal objective that can be
attained is this will also assists in gaining more insight about the online risk so that skills can be
developed accordingly. On the other hand with respect to the professional objective, this
investigation will help in developing the professional career while telling the job opportunity that
is available. Current investigation will also tells about the online risk that can be faced while
doing business in professional manner and how they can be overcome with the use of
professional skills (Chauhan, Yadav and Choudhary, 2019).
Significance of research
The current study will be beneficial for different organisations who are working in retail
industry because firms understand about the supposed risk and trust issues faced by the
company. Also, this in turn help to understand about different ways through which company can
overcome the challenges faced by the company. Apart from this, the current study is also
beneficial for Tesco because it helps to understand different types of risk involved in an online

shopping. This causes positive impact over the business performance and different ideas also
suggested that will be beneficial for the business to overcome the issues.
Moreover, the present research also helps to assist different scholars as well because they
can use the same into their research which in turn help to generate a better outcome and consider
the same for performing their own research as well. That is why, the present research will be
significant in all aspects and provide own views to conduct own study in an effective manner.
Research questions and objectives
Research aim: To investigate the risk and trust on online shopping behaviour in UK retail
industry: “A study on Tesco”.
Objectives:
 To evaluate online shopping as a concept in retail sector.
 To analyse the type of risks, involve in online shopping.
 To assess the perceived risk and trust associated with online shopping behaviour.
 To provide necessary recommendations to overcome the challenges and risk involve in
online shopping.
Research questions:
Q1: What is the concept of online shopping?
Q2: What is the type of risk involved in online shopping?
Q3: What are the supposed risk and trust associated with online shopping behaviour within retail
industry?
Q4: What are the necessary recommendations to overcome the challenges and risk involve in
online shopping?

LITERATURE REVIEW
Literature review is that chapter of the research report which is very beneficially for the
researcher. In this section all the past publish data related to the topic are being collected by
using various secondary source. This section helps the researcher to gain more insight about the
topic so that skills and knowledge can be developed accordingly. Literature review also helps in
bridging the gap between the past data and current investigation. It also acts like a foundation
which can be used by investigator to know more about the chosen topic.
Concept of online shopping in retail industry
As per the views provided by the Vasić, Kilibarda and Kaurin (2019), online shopping is
an electronic mode of shopping which allow the consumers and users to directly procure the
product from the seller. This is like a direct relationship between seller and the buyer in context
to making a trade of the product. The concept of online shopping is about to provide an
opportunity to the seller of the product and the procurer involve in the transaction. The role of
intermediary has completely resigned due to this modern technique of trade. The concept of
online shopping is about to process the buy and sale products and services over internet only.
Internet is a platform to complete the trade in this medium. The tern online shopping not only
about to make a buying decision or top buy product over internet but it is also about to do a
search for buying the product, taking reviews from expert and other. Today the scale of online
shopping has emerged significantly as almost every product is available for buyer over internet.
Further, total number of sites and applications has also increased massively over internet. Rita,
Oliveira and Farisa (2019), has presented the views about the online shopping is such that this is
totally involve making a trade or to search product online in order to purchase the product. This
is totally based on the purchase customer could make through internet. Irrespective of the place
of origin of the organisation selling product online customer can make a buying decision over
internet. Today majority of the companies provide the facility of online shopping with support of
the website. Customer can place the order even by staying anywhere in the world. This whole
concept of online shopping could change the spectrum of the whole world which could make this
world a smaller place. Customer do not require any physical verification of the product as it can
place the order online and even if the customer do not find it familiar with the product due to any
given reason quality, cost, material or any other reason the entire platform also allow the

customer to return the product to the seller in the stipulated time frame. Today online shopping
has become a trend in the commerce which prove the significance of this concept.
The criticism has been made by the Koch, Frommeyer and Schewe (2020), over the
concept of online shopping. The scholar presented the fact that quality issues are massive ion
case of online shooing. Many customers return the product due to the quality issue as this entire
concept do not offer the verification of the product before the purchase has made. Further, online
fraud has also conducted at a huge level in this practice. Today online shopping become one of
the extreme source behind online fraud occur in the society. This has been criticised by the
scholar that this entire model is not safe when it comes to making an online payment to the
seller. Due to these issues this practice becomes less authentic for the customers.
Types of online risk faced by retail sector
As per the view of Håkansson (2020), there are various risk that can be faced while doing
business through digital platform. These risks may create problem to operate business online
with effective and efficient manner. Some of the types of online risk are:
Data privacy and security: This is one of the most vital types of risk that can be faced by
much retail industry in recent time. With the effective use of technology and network securing
business data and making it private is one of the challenge part for the organisation. When
operating business online the company should be aware of all those activities which can affect
their information privacy. Personal information can be hacked by the hacker in today time where
technological advancement make it possible for the hackers to hack all detailed information.
Companies should be aware of the software and technique they are using so that they can secure
their data and can improve their business performance.
Return of goods and warranty: Another type of risk that comes across by the retail
industry is return of goods by the consumer. This type of risk becomes a common headache
when companies need to deal with the returned product. In this company faces the problem
where they cannot resell the goods on original price and there supply chain increases. Many
customers return the product after the use or may return another product out of the original one.
This type of risk is very common in online business. Some of the goods are being return by the
buyers before the expire of the warranty.
Logistic issue: The next risk that can be faced by the online retailer is of logistic issue. The
retailer cannot run out of stock while operating their business online. They need to properly

analyse and evaluated their warehouse inventory so that they can supply their production
quantity without running out of stock. Another logistic issue that occurs is delayed in product
shipment or delivering product to the wrong address. A proper analyses need to be made while
shipping and delivering the product because this will helps in building the trust among customer
towards the company. Address, type of product, expected deliver time all should be specify o the
buyer so that any mistake made by their side can be known to them (Zimmermann and Jucks,
2018).
Search engine optimization: In recent time were the competitions so high it is very
important for the retail industry to rank their online business in top of the search bar. Companies
who are dealing in online market need to top their website so that they can gain more market and
increase their online sale. Another problem that is faced while ranking the website on SEO is of
web traffic which can drop the rank significantly over a night. This is the biggest risk for the
organisation.
Some other types of online risk that can be faced are fair trade laws, fraud, copyright
infringement, Phishing and many more.
Risk and trust associated with online shopping behaviour within retail industry
According to Saxena and Gupta (2018), Risk and trust has major impact on online
shopping and behaviour within retail industry. If the Trust is more than the risk associated with
online shopping will be quite low. If Tesco increase their customer trust by online selling of
goods and service digitally then they can increase their market share. Buyers will make repetitive
purchase from the supermarket. In one of the study it is found that if companies can minimise
their online risk associated with selling product online then they can built more trust among
them. The major online shopping behaviour in retail industry is trust. In the recent time with the
emerging use of online shopping one of the best way to stay sustainable is to develop a long
lasting relation with the buyers. Some of the risk that are faced by Tesco while operating their
business digitally and building trust are:
Non delivery of product: This is one of the common type of online risk that are being
faced by the consumer. They has the fear of not receiving the product after making a payment.
This risk affects the consumer behaviour towards the online shopping. Tesco need to be aware
that they can deliver the goods and service to their customers as sooner as it can be. This built

trust among the buyers and positively impacts the online business. Another risk that the buyer
has is loss and damaged product. This type of problem also affects the consumer behaviour
which also impact the trust. If Tesco deliver wrong or damage product then they cannot built
loyal customer and increase their revenue and market share (Kazancoglu and Aydin, 2018).
Return policy: The another online behaviour that is associated with the risk and trust is
the return policy designed by Tesco. Tesco need to be smooth while developing the return policy
because this has major impact on the buyers. Return policy is one of the important factors that
directly influence the customer perception and ability to buy goods and service of Tesco through
Digital platform. The purchase attitude of the shopper depends upon the policy of return and
exchange. This also impact the trust among the buyers as rigid policy cannot built loyal and trust
of the customers towards Tesco. Tesco should be flexible while given an option to the buyers to
return their product and receive the amount they pay for the goods and service they wish to
render.
Convenience risk: One of the major risks that is faced by Tesco is of convince risk. For
buyers Convenience to buy goods and services through online is the best practices. Tesco should
be so flexible while operating their business in digital platform that they can save time and cost
of their buyers and delivery good while sitting home. If Tesco does not be have the policy of
Convenience then this can be a major risk and will reduce the trust of buyers towards them. The
entire store which are providing online shopping should be flexible in delivering product
(Lăzăroiu and et. al, 2020).
Necessary recommendations to overcome the challenges and risk involve in online shopping
As per the view of Grewal and et. al (2020), it is very vital for the companies to overcome from
the challenges and risk involved in online shopping. If they manage to do so then they will
increase their performance as well as enhance their market share with more loyal customers.
Some of the recommendation that is necessary for Tesco are:
Quality team: If Tesco built a separate department which checks the quality of goods
and services before dispatching them then they will reduce the risk of non delivery of damaged
or wrong product to their ultimate buyers. This will helps in building more trustworthy customer
who is happier with the operation of Tesco. This quality team will also reduce the time and cost
incurred by other employee and improves the process of online shopping. As company operate

their business in various nation so they can build per nation one quality team. This will assist the
Tesco to gain more online presence in international market.
Opt to Flexible technology: Another measure that can be taken by them is opting the
advance technology which is flexible according to the surrounding. Open source technology will
help them to receive the orders as per the client requirement as well as they can also give
feedbacks to the company so that they can improve their online selling of products and goods.
This will also provide return to them by developing trust and loyal customers. Tesco can analyze
their market according the requirement of the buyers and make the goods available as per the
need and on time (Mani and Chouk, 2018).
Flexible return policy: Another recommendation that can be given to Tesco to reduce
the risk and built trust is developing flexible risk policy. The return and exchange policy should
be developed according to the product and goods so that buyer s well as companies does not loss
their money. Flexible return policy helps the Tesco to gain more market share and improve their
online business in more smother way. This will also helps them to overcome from the challenges
that buyer face of fear of returning the product if they receive damaged or wrong goods and
services.
Investing more on Search engine optimisation: One of the best ways to compete with
the competitors in terms of online ordering is investing in search engine optimization. Ranking
the website in top of Google search bar and removing the web traffic helps them to gain more
market and built trust among the buyers. This would helps in gaining more market share by
enhancing the market image.
Some of the other recommendation that can be given to Tesco for minimise the risk that is
associated with online shopping are using of software’s that can secure their data and make it
private. This will aids them to reduce the risk of hacker and publishing of personal information.
Providing various payment options such as cash on delivery, debit or credit card or other UPI
payments (Sharma and et. al, 2020).

RESEARCH METHODOLOGY:
Research methodology can be defined as a systematic process to identify, analyse and
interpreting the data. This section helps the researcher to attain two major questions that is how
data can be gathered and how it is being analysed. This also helps in attain the research aim and
objective in more appropriate manner. This section also assist in gathering data according to the
chosen topic so that aim can be tested accurately. There are various sub parts of research
methodology which can be discussed with the help of research onion framework (Kumar, 2018).
Research philosophy: It can be defined as a set of belief or principles which helps in
knowing the type of data which is to be identified and analyse. There are two types of research
philosophy that is positivism and Interpretivism. Positivism philosophy is that set of belief which
is used when the type of data that is to be identified is Quantitative in nature. On the other hand
Interpretivism philosophy is used when data type is of qualitative nature and principles are based
on human mind and perception. As per the current investigation the type of research philosophy
that is chosen by the investigator is Interpretivism. This is because it will helps in gaining more
insight about the topic and receiving human perception in detailed manner.
Research approach: It is used to test the hypothesis or theories so that aims and
objectives can be attained effectively. Deductive and inductive are the two research approach.
When the data is numerical then deductive approach is used to test the hypothesis. In contrast,
when the data is in the form of words or statement then inductive approach is used to test the
theories. In present investigation examiner has chosen inductive approach to test the new theories
which will be developed according to the requirement. Another reason to select this approach is
it will also helps in testing theories which is based on qualitative information (Snyder, 2019).
Research design: There are three types of research design which are descriptive,
explanatory and experimental. The research design allows the methods which can be used
appropriately for the studies. Descriptive research design explains the data which is based on
quantitative nature. Experimental research explains the relations between two variables and
explanatory research design explore the phenomenon in more adequate manner. In current
research topic explanatory research design will be used to study the data in more adequate and
detailed way.
Research strategy: Some of the strategies that can be used to collect the data from the
participants are Survey, interview, systematic literature review, action research, case study,

experimental research and many more. In current investigation the kind of research strategy that
will be selected by the researcher is systematic literature review. This is because it will helps in
gaining more insight about the topic so that skills and knowledge can be enhanced. Another
reason for selecting this is that it will helps in collecting information from various secondary
sources in less time and cost (Mukherjee, 2019).
Research choice: There are two types of research choice that are quantitative and
qualitative. Quantitative research collects numerical data which can be expressed in numbers or
figure. On the other hand qualitative gathers non numerical information which can be expressed
in words. Further these two choices are sub divided into three parts that is mono method, mixed
method and multi method. Mono method collects either quantitative or qualitative data. In short
only one data type is gathered. Mixed collects both type of data and Multi obtained both data
kinds but more than two times. In present investigation mono method will be used to collects the
quantitative data for the chosen study.
Time horizon: It is the time framework to know the point of time the information needs
to be obtained. They are divided into two parts that is cross sectional and longitudinal. Cross
sectional time framework obtained data in shorter time period and for only one time.
Longitudinal time horizon obtained information for longer time duration and collects information
multiple times. In present research cross sectional time horizon will be used to collects the data
for one time which is also in shorter duration and less cost (Ledford and Gast, 2018).
Data collection: Data collection is the technique of gathering information from various
sources. There are two data collection source which are primary data source and secondary
source. Primary source collects data directly from the user which is not used earlier in any
research. Secondary source the name itself says second hand data which is used multiple time in
various investigation. In current research topic secondary data source will be used to gathers
information from multiple sources. Another big reason to obtains this data is it can be available
in less time with less cost (Alam, 2020).
Secondary data collection: Secondary data is that data type which is collected
earlier for the same topic by any other researchers. This type of data is being used by
different investigator for their study. Collecting this data is quite easy as compared to
primary data. This type of information can be collected from various sources like books,
magine, online site, articles, newspaper, journals and many more. The biggest advantage of

this data collection source is it is cheaper then primary source. The information can be
accessed easily without any limitation. There is no restricted limit to obtain this type of
information.
Data analysis: There are two Techniques to evaluate and measure the data that is
frequency distribution and thematic. Frequency distribution analyse quantitative data and
thematic measured qualitative data. As per the current research thematic data analysis technique
will be used to measure the non numerical data so that detailed understanding can be made.
Research ethics: While conducting research it is very important for the examiner to
follow some ethics which is needed. These ethics or morale are being followed so that they can
hurt anybody feelings and sentiments. Some of the ethics or values that are to be followed are
honesty, integrity, transparency, openness and many more (Iphofen and Tolich, 2018). Further
obeying the values and belief are important concept because it helps in respecting the society and
others and using of outputs i more accurate manner without any misconduct. While following the
norms investigator should have flexible approach because it helps him to plays significant role
according to the needs of participants.
Research limitation: Certain limitations that are being faced while conducting the
research is limited knowledge on the topic. Lack of understanding about the study is the biggest
problem which hinders in collecting and discussing the data. Another challenge is time,
effectively allocating the time in different activities is difficult.

TIME PLAN

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