International retail leakages: Singaporeans outshopping in Malaysia
This research investigates international outshopping. Since most Singaporeans shop in Malaysia, either on occasion or on a regular basis, the island nation is an ideal location to study the phenomenon. In addition, the research is timely since the Singapore Government has expressed concern with the number of outshopping Singaporeans, as well as with the sheer volume of retail business lost across the Causeway. We surveyed 180 consumers to assess the frequency of international outshopping, along with the factors influencing the behaviour. Findings indicate that international outshopping frequency is dependent on age, marital status, education, and ethnicity. Overwhelmingly, Singaporeans outshop internationally for economic reasons, in spite of superior retail conditions at home. Results should stimulate retailers on both sides of the Johor Straits to improve their marketing and retailing mixes to better satisfy shoppers’ needs.
“Singaporean arrivals help boost state’s economy… 800,000 go across to Johor each month” claimed the title of a recent newspaper article (Straits Times, 18 September 2000). This number is significant as it amounts to roughly a quarter of Singapore’s population. Even when considering that the number does not discriminate between frequent and infrequent crossborder shoppers, it is large enough to have attracted the attention of the Government, as indicated by Prime Minister Goh Chok Tong’s 1998 National Day rally speech.
From a managerial perspective, international outshopping, consumers crossing borders to shop, is significant to Singaporean retailers who face both domestic and international competition. The situation is clearly exacerbated by Singapore’s size and geographic location, and ease of crossborder travels. A small island state, Singapore is but one kilometre from the Malaysian city of Johor Bahru (JB) where Singaporeans with passports can enter. A study of Singaporeans outshopping in JB would provide a fruitful context in formulating retail competition enhancement strategies. Local retailers would gain from better understanding of outshopping and develop competitive arguments to sway consumers to shop locally, while neighbouring foreign retailers would also design competitive strategies, but to entice local consumers to travel and outshop. As a result, retailing strategies on both sides of the borders would be improved, while keeping consumers’ various needs satisfied.
Previous outshopping studies investigated retail leakages and their implications for managers in small to medium size North American markets (Herrmann and Beik, 1968; Reynolds and Darden, 1972; Samli, Riecken and Yavas, 1983; Thompson, 1971). However, studies of international outshopping are rare (Tansuhaj, Ong and McCullough, 1989). Hence, this research contributes to better understanding of a universal, yet overlooked, aspect of consumer behaviour: international outshopping. This study, then, should interest retail managers in any border towns or areas where citizens can freely and conveniently travel and benefit from market differences (Straits Times, 5 July 2000).
In sum, we aim to offer retailers better insight into devising retailing mix strategies to compete more effectively in the outshoppers segment. Also, our findings should be helpful to retail managers of the important border retailing industry and to students of retailing. Singapore is an ideal location to study phenomena like outshopping. The city-state is multicultural, located at the core of Southeast Asia, where races and cultures converge. Yet, it is also markedly westernised, especially in terms of consumer behaviour.
Retail Environment in Singapore and JB
Singapore, a well-developed, modern city-state, is a shopper’s paradise. However, in recent years, its retail industry has been sluggish, bracing for a shake-up which can be partly explained by competition from neighbouring Malaysia where retail consumers perceive receiving better value for money. In fact, Singaporeans spent USS$1.6 billion on shopping in Malaysia in 1995 (Business Times, 16 January 1997) and “1.9 million tourists visited Johor, the majority of them [being] Singaporean” during the Mega Sales Carnival in August 2000. New and bigger shopping malls are added alternatives available to tourists and Singaporeans, making the retail business more competitive for retailers in Singapore.
During the Asian economic crisis, consumers’ retail shopping behaviour evolved, turning local shoppers into browsers who tightened their belts and stretched their dollar (Straits Times, 27 October 1998). As a result, high-end product retail stores experienced a slowdown in consumer spending during recent years (Straits Times, 12 January 1998).
From a retail management perspective, the high operating costs due to the scarcity of land and labour create a major disadvantage for local retailers over foreign retailers who, benefiting from lower operating costs in Malaysia and Indonesia, offer more competitive prices. An aggravating situation prevails in Singapore where the 40 per cent retail space increase in between 1993 and 1995 was not matched by the 3 to 5 per cent increase in consumption (Retail Asia, July/August 1996). This translates into an average sales turnover per square metre decline from USS$5,000 in 1993 to USS$4,600 in 1996 (Straits Times, 6 August 1998).
Johor Bahru, is at the southern tip of Peninsular Malaysia and is connected to Singapore by a Causeway, facilitating border crossing. JB is the capital city of Johor state, one of the most developed areas of Malaysia, and its retail environment is modern, including department stores, restaurants and supermarkets.
Factors Influencing Patronage of Shopping Areas
Consumer patronage may be affected by accessibility factors to retail shopping areas, such as distance travelled, time and/or cost spent in getting to the stores. In Singapore, the average shopper’s mobility has greatly improved over the last decade thanks to an excellent public transportation system. Hence, suburban shopping has become a norm among Singaporeans who are also offered shopping tours to foreign countries. For example, most of the 9.8 million visits to JB in 1996 were by Singaporean shoppers, forming the biggest group of consumers in the city (Straits Times, 19 August 1997).
Marketing mixes offered by retailers also influence shoppers’ patronage. The different assortments and quality of products and services, along with attractive prices influence potential outshoppers. Buyer characteristics may influence patronage of certain shopping areas: Consumers of different races, ages, education levels, incomes, personalities, and lifestyles, tend to shop in different areas. Such influence is reflected in retail developers’ efforts to position malls and other retail facilities in ways that attract targeted segments of consumers.
Other factors influence the consumer’s decision on where to shop. Reilly’s (1931) Law of Retail Gravitation Models suggests that area choice is a complex trade-off between the general attractions and the general disincentives of shopping at that area. Disincentives, such as longer travelling distances, may offset the attractions of shopping centres, thereby deterring outshopping. One local instance is to endure the Causeway’s frequent traffic jams to shop for bargains in JB.
An overview of the retail environment in Singapore reveals a mature, perhaps saturated, retail situation. On the other side of the Causeway, however, the JB retail environment in JB seems to be undergoing rapid development and modernisation, increasing international shopping incentives.
Outshopping is travelling beyond one’s own urban market to purchase goods (Dawson and Garland, 1983). It follows that international outshoppers are consumers who purchase away from their home country and identify shopping as a motive for going abroad (Tansuhaj, Ong and McCullough, 1989). International outshopping may then be more complex than domestic outshopping due to greater differences between international market environments and national controls on the movement of goods across boundaries. Such complexities may, for instance, translate into various marketing mixes offered in different countries. While retailing in Asia has been discussed (Feinberg, deRuyter, Trappey and Lee 1995; Takada and Jain, 1991), studies of international outshopping are rare and little research has been done to expand knowledge of the concept (Dawson and Garland, 1983; Lau and Yau, 1985; Merrit and McCullough, 1985; Tansuhaj, Ong and McCullough, 1989).
Definition of Outshoppers
Theoretically, outshoppers could be segmented according to the degree of outshopping carried out. Previous studies used frequency of outshopping trips, proportion of total out-of-town dollar purchases, and types of products purchased away to categorise outshoppers. Such methods are discussed.
Frequency of Outshopping Trips
To Herrmann and Beik (1968), an outshopper shops outside a eightkilometre radius of the downtown area at least once a year, and to Thompson (1971), the shopper makes at least one out-of-town purchase every six months. Hopper and Lipscomb’s (1991) outshopper shopped outside the local trading area at least once a month, while Reynolds and Darden’s (1972) shopped out-of-town 12 or more times in the previous year. Samli, Riecken and Yavas (1983) required 24 outshopping trips per year, while Hawes and Lumpkin (1984) needed more than two. Both Wee, Loh and Kau (1988) and Hopper and Budden (1989) classified frequent outshoppers as outshopping at least twice a month.
Clearly, the problem is with group membership criteria that are often arbitrary and made to suit the purpose of the study (Dawson and Garland, 1983; Wee, Loh and Kau, 1988). Membership is forced upon consumers within grey areas and what constitutes outshopping is inconsistent across studies. For instance, is an infrequent outshopper a frequent inshopper, and a frequent outshopper an infrequent inshopper? The assumptions might be valid where cities are far from each other but not so when distances are shorter as in Singapore (Wee, Loh and Kau, 1988).
Proportion of Total Dollar Purchases
Frequent outshoppers who may make minimal purchases out of town may be poor economic indicators when compared to occasional, but bigspending, outshoppers. Samli and Uhr (1974) identified the heavy outshoppers who buy 75 per cent or more out of town, outshoppers who buy 50 to 74 per cent away, inshoppers who buy 51 to 75 per cent at home, and loyal inshoppers who buy 76 to 100 per cent in town. This second method also has problems, as it would require much effort and resources to record amounts spent out-of-town and absolute total spending.
Types of Products Purchased
Other studies categorise outshoppers according to products purchased outside of their local shopping areas (Hozier and Stem, 1985). Darden and Perreault’s (1976) outshopping varies according to the purchases of 13 product categories over a past year. They offer (a) the big-ticket outshoppers who buy pricey home products, (b) the appearance outshoppers who buy looks-enhancement products (for example, jewelry, apparel), (c) the furniture, and (d) the home-entertainment outshoppers whose buying behaviour is more product-specific. To these authors, outshopping is not a continuum: different types of outshoppers buy different kinds of products on different outshopping trips. For example, big-ticket outshoppers are not expected to do as many trips as appearance outshoppers.
Hence, the diversity of definitions points out the pervasiveness and complexity of the phenomenon. Altogether, this amalgam contributes to the understanding of intermarket leakages. Still, it would be helpful if a comprehensive definition of the phenomenon were available.
Characteristics and Behaviour of Outshoppers
Understanding the outshoppers better may result in more efficient marketing strategies on both sides of borders: domestic marketers will endeavour to offer mixes that appeal to the segment of outshopping-prone consumers and keep them at home while foreign retailers will do the same to have them cross national frontiers. Consumers’ choices are enhanced. Studies have attempted to determine individual characteristics of the outshopping-prone consumers, discriminating along demographic, attitudinal, and other variables.
By knowing which shoppers they have failed to attract, retailers can improve their marketing strategies. Dawson and Garland (1983) first suggested similarities between demographic indicators that traditionally separate inshoppers from outshoppers in national and international contexts. Evidence on the influence of demographic characteristics on outshopping abounds (Herrmann and Beik, 1968; Darden and Perreault, 1976; Dawson and Garland, 1983; Hawes and Lumpkin, 1984; Hopper and Budden, 1989; Lillis and Hawkins, 1974; Papadopoulos, 1980; Reynolds and Darden, 1972; Samli and Uhr, 1974; Tansuhaj, Ong and McCullough, 1989; Thompson, 1971; Wee, Loh and Kau, 1988). However, researchers generally agree that not all demographic characteristics are good descriptors of the average outshopper.
Higher income tends to indicate outshopping proneness (Herrmann and Beik, 1968; Darden and Perrault, 1976; Dawson and Garland, 1983; Papadopoulos, 1980; Reynolds and Darden, 1972; Thompson, 1971) with frequent outshoppers having higher income than occasional outshoppers and, in turn, higher than inshoppers (Hawes and Lumpkin, 1984). However, Samli and Uhr (1974) found that heavy outshoppers’ total family income was relatively less than the outshopper, inshopper and loyal inshopper groups, while Tansuhaj, Ong and McCullough (1989) found Singaporean international outshoppers’ income to be less than that of those who travel but do not shop.
Outshopping behaviour may be negatively related to age, as younger people tend to outshop more often (Lillis and Hawkin, 1974; Papadopoulos, 1980; Reynolds and Darden, 1972; Samli and Uhr, 1974; Tansuhaj, Ong and McCullough, 1989; Thompson, 1971). Gender may also influence the behaviour: frequent outshoppers are mostly males (Hawes and Lumpkin, 1984; Samli and Uhr, 1974). Such findings give support to the idea of customised, gender-based retailing strategies.
In the United States, Caucasians shopped out of town more frequently (Thompson, 1971), hinting at racial and cultural factors’ influence on outshopping. But no studies could correlate occupation to outshopping (Papadopoulos, 1980).
Evidence on education, family size and life cycle stage, and tenure in the community is mixed. Some studies show outshopping as positively associated with education (Dawson and Garland, 1983; Hawes and Lumpkin, 1984; Papadopoulos, 1980; Reynolds and Darden, 1972). For instance, male outshoppers tend to be formally educated longer than male inshoppers (Hawes and Lumpkin, 1984; Reynolds and Darden, 1974) while the wife in heavy outshopper groups tends to be less educated than wives of other groups (Samli and Uhr 1974). Yet, Darden and Perreault (1976) found no such differences among outshoppers.
Evidence related to family size and life cycle stage on outshopping is also contradictory. Herrmann and Beik (1968), Lillis and Hawkins (1974) and Tansuhaj, Ong and McCullough (1989) provide evidence suggesting that outshoppers tend to live in smaller households. Herrmann and Beik (1968) found the behaviour less common among families with less than three young children. Other studies found no significant relationships between outshopping behaviour and family size (Hawes and Lumpkin, 1984; Papadopoulos, 1980; Reynolds and Dardens, 1972; Samli and Uhr, 1974; Thompson, 1971). Both Hawes and Lumpkin (1984) and Papadopoulos (1980) found outshopping positively associated with tenure in the community while Samli and Uhr (1974) found the opposite effect.
Reynolds and Darden (1972) suggested that psychographics better predict outshopping behaviour than demographics, and offer more efficient segmentation of outshopping. Frequent outshoppers tend to be more fashionconscious than infrequent outshoppers (Herrmann and Beik, 1968; Darden and Perreault, 1976; Thompson, 1971; Hawes and Lumpkin, 1984), and express an overall dissatisfaction with local shopping conditions (Reynolds and Darden 1972; Dawson and Garland 1983). However, international outshoppers were not generally dissatisfied with local retailers but perceived prices and selection to be better in foreign retail environments (Tansuhaj, Ong and McCullough 1989).
Herrmann and Beik (1968) found outshoppers to be less price sensitive, maybe a behavioural expression of outshoppers’ higher incomes, while Thompson (1971) reported that outshopping was most common where price reductions were the greatest. This apparent contradiction may be due to the different travelling costs incurred by the respondents in the two studies or by price differences not large enough to compensate for the travelling costs in the earlier study.
Reynolds and Darden (1972) used female homemakers to study the psychographic profile of outshoppers. Frequent outshoppers were very active and urban oriented, with strong preferences for larger urban or out-of-town shopping areas, but neither time-conscious nor loyal to any particular store. Darden and Perreault’s (1976) frequent outshoppers possessed more selfconfidence and showed greater patronage innovation behaviour. Hawes and Lumpkin (1984) supported such findings, adding that outshoppers were opinion leaders and influential information sources for shopping matters.
Hence, a psychographic profile of outshoppers emerges: typical outshoppers are fashion-conscious, less price and time sensitive, innovators and confident cosmopolitans with no loyalties to particular stores. Exposed to more information, the outshopper is a retailing information source and influential opinion leader.
Shopping Area Attributes
While better understanding of the outshoppers is important, we need to recognise the stimulating influence of the retail environment (see Figure 1). Consumers’ dissatisfaction with local shopping conditions may be conducive to outshopping (Samli and Uhr 1974). Hawes and Lumpkin (1984) found that the presence of specific retail facilities, such as beauty salons/ barbershops, convenient location and ease of access increased outshopping.
The more mobile a consumer, the more he tends to outshop (Darden and Perreault, 1976; Herrmann and Beik, 1968). Distance-related mobility refers to transport and (long-distance) travels, while situation-related mobility refers to (in)conveniences, such as travelling long or short distances. For instance, having large families and young children or being older and/or physically disable may hamper outshopping (Herrmann and Beik, 1968).
Secondary Costs of Shopping
Purchases involve both item cost and monetary and non-monetary secondary costs, such as when shopping, arranging the purchase, getting the purchased item home. For instance, highly mobile consumers may be willing to incur high secondary costs (that is traveling costs) to shop where product and price offerings meet their desires.
Secondary consumer costs often appear to be bundled as price-type (for example, parking fees), time-type (for example, travel and waiting time) and psychological-type costs (for example, annoyance and inner conflict) (Bender, 1964). Consumers’ willingness to search is affected by their perceptions of the costs associated to shopping, as well as the characteristics of the product. Herrmann and Beik (1968) found that secondary costs were highly income elastic: higher-income shoppers willingly incurred substantial outshopping expenses to access what may not have been available locally. Hence, secondary costs in time, money and effort can be important determinants of shoppers’ behaviour.
Outshopping also differs for different product categories, seemingly pervasive for shopping goods but not for convenience goods (Reynolds and Darden, 1972). Samli, Riecken and Yavas (1983) indicated that for shopping goods, such as apparel, gifts or hobby-related products, both frequent and infrequent outshoppers outshopped more. Specialty goods are also often purchased out-of-town.
Several studies explore the relationship between price and outshopping. Herrmann and Beik (1968) reported frequent out-of-town purchases of highly visible items with relatively high unit cost and important status connotations. Lau and Yau (1985) found consumer’s outshopping to be influenced by products’ forms and price levels: pocket cameras costing less than $200 were seen as convenience goods, purchased at convenient locations, whereas higher-priced pocket cameras were purchased in the major shopping districts. Also, products that depend more on customer service, fashion and heavilydiscounted products were more likely to be purchased locally (Thompson, 1971).
Outshopping is a complex phenomenon, influenced by a flurry of personal, situational and marketer-dependent factors. With a better understanding of outshoppers, marketers on both sides of national borders can develop specific marketing offerings to stimulate local and international patronage, thereby fostering a competitive retailing environment. The factors influencing consumers engaged in an outshopping movement of people to goods are shown in Figure 2. However, as most of studies were conducted in North America, it is conceivable that the factors influencing consumer outshopping may vary between countries and regions. Such differences could be attributed, among others, to cultural backgrounds affecting consumers’ lifestyles and attitudes and to various levels of retail development.
The main objective of this study is to gain a better understanding of the characteristics and behaviour of outshoppers and a measure of their ethnocentric tendencies. Recognising the multiplicity and limitations of existing definitions, in this study, we refer to outshoppers as consumers who make purchases out of the home country, and focus on differences between frequent and infrequent outshoppers. A frequent outshopper shops abroad at least once a month, while an infrequent outshopper does not shop so frequently.
The sample consists of adults residing in Singapore and who have shopped in JB, Malaysia. A sample of 180 respondents, surveyed in Malaysia, and representing the national distribution (Singapore Department of Statistics, 1997) of the three main ethnic groups in Singapore (that is Chinese, Malays, and Indians) was selected randomly within each racial stratum. Each fifth shopper entering the store (see later for store descriptions) was asked to participate in the survey. To identify outshoppers, respondents were screened and asked whether they came from Singapore and if the sole purpose of their visit were to purchase goods. Respondents who were not outshoppers were no longer considered for the survey. Self-administered questionnaires were distributed randomly at each of the four locations using the mall intercept survey method during two weekends, when Singaporeans outshop. Carrefour, Giant, The Store, and Holiday Plaza were selected for their popularity among Singaporeans. Carrefour, a French hypermarket providing a one-stop shopping destination and “Everyday Low Price”, is 45 minutes away by car from the customs checkpoint. Giant is a Malaysian-owned hypermarket directly competing with Carrefour with nearly similar product offerings and pricing strategy. Patrons number 50,000 on weekends and between 10,000 and 15,000 daily with about 30 per cent of shoppers from Singapore (Sunday Times, 25 October 1998).
The Store, a departmental store close to the customs checkpoint (a 15minute car drive), is also popular with Singaporeans. The Holiday Plaza is located approximately 4.5 kilometres from the checkpoint and offers a holistic approach with banking services; recreational facilities, such as a bowling alley and a cinema; food outlets; an exhibition mall; and an adjacent hotel, the Holiday Inn.
Items for the questionnaire were constructed around statements generated during focus group meetings, past studies on outshopping and ethnocentrism, and press reports. A focus group of 10 married and working adults, and students discussed views and opinions on products sold in JB, and the general sentiments towards shopping in JB, such as perceived costs of shopping and willingness to shop there, as compared to Singapore.
The questionnaire contains six sections. Section I consists of six questions about the shopping behaviour of Singaporeans in JB and seeks to examine the five w’s of their shopping. Here, frequencies ranged from more than once a week to more than a year ago. Section II contains two parts and measures the respondent’s level of satisfaction on certain attributes about the conditions of shopping facilities both in JB and Singapore. Section II also provides an overall perspective on the respondents’ shopping experience in JB, and the extent to which their patronage is encouraged. Section III relates to the perceived secondary costs of shopping in JB and section IV addresses Singaporeans’ willingness to shop in JB.
A pilot test was conducted with 15 consumers who were asked to comment on the format, language clarity and suitability of the questions to ensure that they and the instructions were easily understood. Following some suggestions, minor adjustments and improvements were made on the questionnaire.
Five hypotheses were formulated to investigate consumers’ attitudes towards outshopping. The first consists of statements related to demographic variables. The second includes a set of comparisons on the perceptions of retail areas in JB and in Singapore between frequent and infrequent outshoppers. The third hypothesis refers to frequent and non-frequent outshoppers’ perceptions of secondary consumer costs when shopping in JB. The fourth hypothesis tests for a significant difference between frequent and infrequent outshoppers’ willingness to shop in JB.
As discussed earlier, researchers have agreed that not all demographic characteristics are significant descriptors of average outshoppers (Papadopoulos 1980). While outshoppers tend to earn a higher income and be younger, they cannot be identified by their occupations (Darden and Perrault, 1976; Dawson and Garland, 1983; Hawes and Lumpkin, 1984; Herrmann and Beik, 1968; Lillis and Hawkins, 1974; Papadopoulos, 1980; Reynolds and Darden, 1972; Samli and Uhr, 1974; Thompson, 1971). The evidence is unclear with respect to education, family size and life cycle stage. These relationships are tested to investigate their influence in an international context. Therefore, we suggest
H1: There is no significant relationship between demographic variables and outshopping behaviour.
The demographic variables of interest are those previously investigated in the literature and include age, gender, highest educational level, occupation, average household income level per month, area lived in Singapore, household size, number of children living at home, number of children below six years old, and number of cars in the household.
In sharp contrast with demographics, researchers agree that attitudinal variables, in the form of consumer (dis)satisfaction with local retailing, are closely associated with outshopping. Attitudes towards price, quality, selection and service in domestic markets have been related to outshopping which occurs more likely with dissatisfaction of the local retail conditions, (Darden and Perreault, 1976; Dawson and Garland, 1968; Herrmann and Beik, 1968; Lillis and Hawkins, 1974; Reynolds and Darden, 1972; Samli and Uhr, 1974; Papadopoulos, 1980; Thompson, 1971). Therefore, we seek to identify
H2: There is no significant difference between frequent and infrequent outshoppers’ perceptions of retail areas in JB and Singapore.
Perceived Costs and Willingness to Shop in Johor Bahru
Consumers’ high mobility has numerous ramifications on the marketing system, in general, and upon retailing, in particular. With increased and convenient mobility, consumers are no longer restricted to local retail offerings and may be willing to incur “secondary” costs to shop where product and price offerings are perceived as more competitive. Thus,
H3: There are no significant differences between frequent and infrequent outshoppers’ perceptions of secondary consumer costs when shopping in JB.
Willingness to shop in JB, a “psychological” cost, also influences the decision to shop there. Thus, the recurring bickering between the two countries might affect Singaporeans’ outshopping to JB. While these costs may not be measured precisely, outshoppers may consider them, as a bundle, in their search activities. Therefore,
H4: There is no significant difference between frequent and infrequent outshoppers’ willingness to shop in JB.
Other Topics of Interest
Finally, this study seeks to find out whether consumers usually outshop alone, with families or friends, and the mode of transportation they use. Secondary reasons for visiting JB, types of products usually bought, and amounts spent on each product category are also of interest.
Results and Discussion
Two-thirds (64 per cent) of the respondents shop at least once a month in JB and are classified as frequent outshoppers. Regardless of frequency of foreign shopping, two-thirds of outshoppers (65 per cent) do so with family members, and one-quarter (26 per cent) with friends. Over half (55 per cent) of the respondents travelled to JB by car, the next popular mode of transportation being public buses. Travelling expenses for one-third (35 per cent) of the outshoppers fall between US$10 and US$30, whereas one-quarter (26 per cent) spent within US$3 and less than US$10. A majority (60 per cent) of the respondents stated pleasure and vacation as a secondary reason for visiting JB, while the rest visited relatives and friends.
The most popular (27.4 per cent) of all purchases were food and beverages, followed by groceries (24 per cent), and fashion products (17.5 per cent), supporting earlier findings that most Singaporeans spend abroad on clothes, handbags, shoes and cosmetics (Sunday Times, 14 September 1997) and food and grocery products (Tansuhaj, Ong and McCullough, 1989).
As illustrated in Table 1, chi square analyses identified five characteristics that significantly (p
Almost a third (31 per cent) of frequent outshoppers are within 18 and 30 years old, and about 20 per cent for each other age categories (that is 31 to 40., 41 to 50., and 51 to 65 years old), supporting earlier findings that younger shoppers tend to outshop more than older consumers. (Thompson, 1971; Reynolds and Darden, 1972; Samli and Uhr, 1974; Lillis and Hawkin, 1974; Papadopoulos, 1980; Hawes and Lumpkin, 1984). Most of infrequent outshoppers are younger consumers, between 18 to 30 years old while only 3.6 per cent of the infrequent outshoppers are above 50. In other words, frequent or infrequent outshopping is the realm of younger consumers. Of the frequent outshoppers, about three-quarters (73 per cent) are married versus approximately one third (30.4 per cent) for infrequent outshoppers, and a lesser proportion (28 per cent) than infrequent outshoppers (62.5 per cent) has tertiary education. The large proportion of frequent outshoppers who are blue-collar workers (62 per cent) corroborates this information. While a large majority of frequent and infrequent outshoppers are Chinese, the proportion of Malays who outshop frequently is almost four times higher than infrequent outshoppers. That proportion is 1.6 for Indians.
Shoppers’ Perceptions of Retail Areas and Marketing Mixes
Attitudes towards retail areas motivate consumers toward outshopping
and are influenced by effort, time and money spent but partly offset by the pleasure to travel and shop in different environments. We find no significant differences (chi^sup 2^=0.05) between frequent and infrequent outshoppers’ perceptions of parking facilities and service in JB. However, both groups rate parking facilities in JB as highly satisfactory, but are dissatisfied with the service provided by JB retailers.
Product (that is stationery, music, beauty and skincare, and grocery products) quality, selection and price are perceived significantly differently (p
When frequent and infrequent outshoppers were asked to indicate their perceptions on the same shopping attributes, but in Singapore, they only differed significantly (p
Frequent outshoppers perceive grocery products and food and beverage as being of higher quality and electrical appliances in wider selection in Singapore than infrequent outshoppers. Both groups view the quality and selection of all product categories sold in Singapore to be somewhat high and wide. However, frequent outshoppers perceive prices for all product categories in Singapore to be uncompetitive, whereas infrequent outshoppers have neutral perceptions on the issue.
To sum, both frequent and infrequent outshoppers view higher quality and wider selection of products, and better service in Singapore than in JB. Perceptual differences are about price which seems to be the motivating factor for frequent outshoppers who view more competitive prices in JB than in Singapore.
Attitudes toward Shopping in Johor Bahru
T-tests failed to detect significant differences ((X = 0.05) between frequent and infrequent outshoppers for statements 1 and 4 (see Table 2). However, while promotions motivate frequent outshoppers, they fail to do so with infrequent outshoppers, implying that promotions do act as a motivator for those familiar with the outshopping scene. It may be that their involvement with outshoppping gives them timely information about promotions, which, in turn help rationalise shopping trips, while infrequent outshoppers may travel with a general idea to purchase, rather than a motivation to benefit from promotions. (Straits Times, 25 January 1998). In addition, frequent outshoppers differ (p
As earlier mentioned, increased mobility may increase consumers’ willingness to incur secondary costs to shop where they believe product and price offerings to be more compatible with their desires. As indicated in Table 3, the secondary costs of shopping are classified into monetary, timerelated, psychological and other types of costs.
Overall, frequent outshoppers perceived fewer costs than infrequent outshoppers (p
Time-related costs refer to travelling distances, time spent in jams and opportunity costs are time-related expenses. T-test results show a significant difference (p
Both groups agree that restrictions on food items (that is flour, cooking oil, sugar and condensed milk) will discourage them from outshopping. Such an act is implemented to regulate the outflow of essential items from Malaysia (Straits Times, 13 January 1998) and may have a significant impact on outshopping behaviour as grocery products were the most popular items bought.
Willingness to outshop carries a “psychological” cost that may influence outshopping behaviour. For instance, the frequent spates of events that affect the relationship between Malaysia and Singapore, issues of national pride and other concerns may affect outshoppers’ willingness to shop in JB. While consumers probably cannot measure these costs precisely, they may consider them in their search activities. A T-test reveals a significant difference (p
Frequent outshoppers do not feel welcome in JB while infrequent outshoppers do. Neither group feels guilt in outshopping and, to them, spending in JB is not associated to a lack of national pride. Still, infrequent outshoppers feel more discouraged from shopping in Malaysia. Lastly, both groups disagree that JB is a safe place to shop, with the infrequent outshoppers feeling more vulnerable. Overall, we can infer that willingness to outshop is independent of national pride, and that outshoppers do so solely for economic reasons. That frequent outshoppers do not feel welcome in JB where they frequently shop may strongly support the suggestion that outshopping, in this case, is purely economically motivated and that the perceived derived benefits are important enough to overlook the discomfort of not feeling welcome.
Theoretical Implications and Discussion
Outshopping is a complex phenomenon involving many variables. This research seeks to strengthen our understanding of some of these variables, and specifically offer fresh insight on the characteristics and behaviours of outshoppers. Our results support earlier findings that outshoppers tend to be males and younger consumers, as well as forming small households who are generally dissatisfied with local shopping conditions. However, our results differ from prior findings in that those consumers who were identified as frequent outshoppers come from lower income groups with lesser formal education (the frequent outshoppers in this research are typically blue collar workers). In addition, they perceive better selection domestically but are fundamentally motivated to outshop by price differentials.
These supporting and differentiating results may point toward a need to expand our present understanding of (international) outshopping to allow for a discrimination between utilitarian and touristic outshopping. Previous studies of international outshopping focused on tourists purchasing abroad. In this study, considering the geographic closeness of the two countries, outshopping is mostly a utilitarian behaviour. This may explain why the international outshopper is typically blue collar and while better quality and services may be available in Singapore, our subjects resort to outshopping purely for financial reasons.
Should this observation prove correct, Singaporean retailers are then challenged to design a marketing mix appropriate to the segment of international outshoppers: specifically, such consumers are seeking more affordable prices. Considering the segment’s ability to travel and shop, there are then possibilities to develop retail outlets, located away from the main shopping centers, thereby possibly offering a real estate investment savings that can be transferred onto the international shoppers.
In addition, since existing retail outlets cater to brand- and statusconscious Singaporeans, the positioning of a new, more affordable retail concept would not stir a potentially costly confusion in consumers’ minds. Altogether, Singaporean retailers would gain by redirecting a significant portion of national consumer purchase expenditures toward the domestic market.
Summary and Conclusion
This study reports on international outshopping and findings indicate that the frequency with which the behaviour is displayed is influenced by demographic variables such as age, marital status, highest educational level attained, occupation, and ethnicity. Clearly, in this research, frequent outshoppers can be typified as young, married, blue-collar consumers. They differ widely from the international outshoppers described in prior research in that the consumers described here outshop for utilitarian purposes, and not as a complement to tourism. In turn, this implies new opportunities for Singaporean retailers who can design appropriate marketing mixes to retain such consumers’ patronage. Our findings can also be extrapolated to other regions where shoppers regularly travel to find better prices on necessities. This phenomenon can be presently witnessed in the United States where “people can go into Quebec, get the same drug manufactured by the same multinational company for 40 per cent less” (Straits Times, 5 July 2000).
Perceived economic benefits appear a solid motivator for outshopping. International outshoppers appear primarily motivated by price, disregarding the possibility that, in the end, once all secondary and hidden costs have been considered, outshopping trips may not be an economically rational decision. It is therefore appropriate that students of outshopping should consider non-economic motives, such as the thrill of finding bargains, the pleasure of paying lesser taxes on consumer products purchased in a foreign land, etc. In other words, outshopping may be strongly motivated by qualitative characteristics pertaining to the joy and fun of the shopping experience.
While the findings from this study should be informative to strategic decision-makers in retail areas and industries that border international frontiers, the same managers should also recognise that the results may not be totally generalisable to their own situations. Specifically, in this research, the absolute economic savings of international outshopping may not be as significant as consumers believe. This is an area where future research would be very helpful, that is to offer a quantified measure of absolute savings, including the assignment of personal values to non-monetary expenses. Future research would also contribute by offering a qualitative approach to the study of the phenomenon, describing psychological phenomena that may occur while outshopping, such as the feeling of power that may be experienced by consumers as they purchase in less-developed economies, the fun of shopping in an “exotic” location (atmospheric stimulus that some retailers attempt to generate in their own stores), and the excitement of being in a foreign, even though often familiar, environment.
Finally, findings from outshopping studies may be well adaptable to studies of E-consumers. Similarities abound as E-consumers travel through the Internet to shop, incur non-monetary and psychological costs similar to those of outshoppers. E-consumers may also shop outside of their home country, spending resources that benefit foreign retailers.
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