Customer Acceptance of Mobile Apps in Retail Industry

Analysis of Acceptance of mobile apps in retail industry

1. CUSTOMER ACCEPTANCE OF MOBILE APPS TECHNOLOGY: THE ROLE OF PERCEIVED RISK Firdaus Basbeth & Andrianto Widjaja , Sekolah Tinggi Manajemen PPM Jakarta, Indonesia

2. The ABC Company is a pioneering force in the home furniture retail market, and it is one of the furniture companies that is using social media to promote growth. ABC takes a contemporary and minimalist approach to lifestyle, sharing information about its products and services over a range of social media channels such as Facebook, Instagram, Twitter, and YouTube. Online applications are expected to make it easier, safer, and more enjoyable for consumers to shop for furniture. As a result, the web application is expected to make purchasing furniture more convenient for buyers while also increasing sales turnover. However, the anticipated level of turnover has not been reached, due to the implementation of online applications. Even though the business employs a variety of sales tactics, it still faces obstacles, such as merchandise that isn't readily available at the store, making it difficult for consumers to quickly assess the state of the products they plan to buy. As a result, consumers are now apprehensive about making purchases online, raising questions regarding product details, prompt delivery, item quality, and other issues. Introduction

3. Because offline sales and purchases are seen as more secure than their online business, people tend to avoid Internet transactions in favor of them. The data indicates a drop in the company's performance within the Internet business area. Furthermore, a significant segment of the user base has conveyed concerns regarding the application's usability, security, and general safety. The Technology Acceptance Model (TAM), is a behavioral paradigm that clarifies how information technology is used. [3] established a mindset around the interest in information technology use based on perceived ease of use and utility, which led to the introduction of TAM. Introduction

4. The Technology Acceptance Model (TAM) has been significant in explaining how users behave with technology by emphasizing that a person's reaction to and perception of a given technology influences what they do next (Fig.1). Most studies on users' adoption of technology have included the Technology Adoption Model (TAM), which has gained much reputation. Several studies have previously supported this theory [4-6] which found that TAM can elucidate online customer shopping behavior. Introduction

5. According to Davis [3], numerous factors impact the prosperous assimilation of technology. The perception of "perceived usefulness" is indicated by quick work performance, increased productivity, and overall ease of use. In addition, "perceived ease of use" is indicated by qualities such as ease of learning, controllability, clarity, flexibility, and a user-friendly design. Further [3] stated that people prefer to use technology or not to the degree they think it would allow them to do their jobs better. Introduction

6. TAM

7. Li and Huang (2019) in their research explain that perceived risk also plays an important role in increasing instability in the online shopping environment. Many external variables can be used in TAM in e-learning and business application studies [8] since the first external variable that was added by [3] is the quality of the output. Until now, more than 70 external variables have been proposed in the Technology Acceptance Model. Perception of risk is another element that influences motivation in utilizing technology, in addition to perceived usefulness and simplicity of use. One of the risk factors that need to be taken into account is the perception of risk, particularly when the product's condition is pricey, complex, difficult to understand, and the brand is unknown [9]. Introduction

8. Although technology provides many benefits and ease of use for its users, there are still several users who refuse to use technology because of uncertainty and security issues [10]. In this study, perceived risk is used as an external variable because in the online purchasing process, consumers cannot directly feel the condition of the product to be purchased, security in the delivery process is also a factor that can cause risk. According to the findings of prior research, there are only a few studies that place the perceived risk variable as an external variable, additionally, no prior research has been conducted on the furniture retail industry. Introduction

9. Hypothesis Development H1: Perceived Risk has a positive effect on Perceived Usefulness H2: Perceived Risk has a positive effect on Perceived Ease of Use H3. Perceived Usefulness has a positive impact on the intention to use applications H4: Perceived Ease of Use has a positive effect on the Intention to use applications H5: Perceived Ease of Use has a positive impact on Perceived Usefulness

10. To acquire data for this study effectively and promptly, an online questionnaire will be distributed to selected respondents. We will use purposive sampling with non-probability to select respondents who meet the following criteria: 1) they have used a mobile payment method to purchase products on e-commerce websites and marketplaces; 2) they reside in the Jakarta metropolitan area ( Jabodetabek ). Variable was measured using a unidimensional measurement, every variable was measured by three items. Most of the questionnaire adopted from Venkatesh & Davis, 2000, Sarkar (2017), T Cheung, 2011, and Pousttchi , K., & Wiedemann, D. G. (2007). Method

11. Findings & Discussion : Respondent Profile Variable Category Count Percentage Gender Female 45 43 Male 60 57 Age group 21-30 51 49 31-40 40 38 >40 14 13 Education High School 60 57 Diploma 1 1 Bachelor degree 40 38 Master degree 4 4 Profession Housewife 3 3 Govt employee 1 3 Privat employee 97 92 Entrepreneur 4 4 Income <6 71 67 6-20 22 21 21-50 8 8 >50 4 4

12. Model

13. Evaluation of Measurement Model Cronbach's alpha Composite reliability (rho_a) Composite reliability (rho_c) Average variance extracted (AVE) Intention to Use 0,932 0,932 0,957 0,881 Perceived Ease of Use 0,944 0,948 0,960 0,857 Perceived Risk 0,867 0,867 0,919 0,790 Perceived Usefulness 0,898 0,902 0,925 0,712

14. Evaluation of Structural Model Relationship Path coefficient VIF f 2 Perceived Risk  Perceived Usefulness 0,274 1,727 0,155 Perceived Risk  Perceived Ease of Use 0,649 1,000 0,727 Perceived Usefulness  Intention to Use 0,546 3,102 0,321 Perceived Ease of Use  Intention to Use 0,327 3,102 0,115 Perceived Ease of Use  Perceived Usefulness 0,646 1,727 0,866

15. Hypothesis testing Path coefficient T statistics P values Remarks Perceived Risk  Perceived Usefulness 0,274 2,793 0,003 H1 supported Perceived Risk  Perceived Ease of Use 0,649 9,406 0,000 H2 supported Perceived Usefulness  Intention to Use 0,546 5,440 0,000 H3 supported Perceived Ease of Use  Intention to Use 0,327 3,249 0,001 H4 supported Perceived Ease of Use  Perceived Usefulness 0,646 5,409 0,000 H5 supported

16. Discussion As can be seen in Table 7, the effect of perceived risk on the perceived usefulness represented by the path coefficient is small (0.274), with a t-value (2.793) which is >1.65, and a p-value (0.003) smaller than 0.05 (at α = 5%). According to Hair Jr, et al. [27], the effect is significant; therefore, H1 is supported, which means that perceived risk positively affects the perceived usefulness, and the effect is substantial. This finding supports the findings of [28], who explain that perceived risk is essential in creating stability in online retail. According to the survey, online merchants rely not only on the operational qualities of the website, perceived benefits, and convenience of use but also on the higher risk customers have with websites and online commodities

17. Discussion The effect of perceived risk on perceived ease of use, shows that the relationship is strong with path coefficient (0.649), t-value, and p-value (9.406) and (0.000), indicating that there is a positive and significant effect, therefore, H2 is supported. This observation backs up previous study of [29]). Which stated that risk perception is highly dependent on the characteristics and psychological condition of the person. The lower the risk that is felt by consumers, the greater consumer confidence in using information technology systems, influencing the perception of the usefulness of the information system. The effect of perceived usefulness on intention to use, shown by the path coefficient (0.546) means that the effect is strong with the t-value, and the p-value showed (5.440) and (0.000). Thus, the result indicates that H3 is supported: there is a positive and significant effect of PU on Intention to Use. The findings of the study are confirmed by a previous study conducted by [30], which found that Perceived Usefulness had a strong positive effect on Intention to Use.

18. Discussion The effect of perceived ease of use on intention to use shows that the relationship is strong with path coefficient (0.327) the t-value, and the p-value (3.249) and (0.001), indicating that there is enough evidence to support H4. The findings confirm [31] study, which indicate that perceived ease of use has a favorable and substantial effect on intention to use. Numerous prior studies [32-35] demonstrate that the perceived usefulness variable has a positive effect on and a considerable interest in online transactions. Lastly, the effect of perceived ease of use on perceived usefulness has a strong effect (0.646) and a significant effect with t value (5.409) and p-value (0.000). The finding is consistent with the findings of [36], who found that users will benefit more if the information system is simple to use. According to the findings of [36, 37] study, perceived ease of use has a positive and substantial effect on perceived usefulness.

19. Conclusion The study's purpose is to examine the relationship between perceived risk (PR) and perceived usefulness (PU). The findings indicate that PR has a beneficial influence on PU. The indicator that best depicts the variable is that respondents believe in ABC products as recommended by friends and family online, even though the products cannot be physically seen. The second purpose of this study is to determine the effect of perceived risk (PR) on perceived ease of use (PEU). The test result established that PR had a positive and significant effect on PEU. The third research objective was to examine the relationship between the perceived Usefulness (PU) on ABC application Intention to Use application. The findings indicate that PU has a significant effect on the intention to use the apps. Similarly, on the fourth objective, while investigating the influence of perceived ease of use (PEU) on intention to use. The result indicated that PEU has a moderate effect on the intention to use the apps. The fifth objective is to evaluate the relationship between perceived ease of use (PEU) and perceived usefulness (PU) of ABC mobile applications. The findings indicate that PEU has a significant impact on the PU of ABC mobile applications.

20. Theoretical Implications The study's purpose is to examine the relationship between perceived risk (PR) and perceived usefulness (PU). The findings indicate that PR has a beneficial influence on PU. The indicator that best depicts the variable is that respondents believe in ABC products as recommended by friends and family online, even though the products cannot be physically seen. The second purpose of this study is to determine the effect of perceived risk (PR) on perceived ease of use (PEU). The test result established that PR had a positive and significant effect on PEU. The third research objective was to examine the relationship between the perceived Usefulness (PU) on ABC application Intention to Use application. The findings indicate that PU has a significant effect on the intention to use the apps. Similarly, on the fourth objective, while investigating the influence of perceived ease of use (PEU) on intention to use. The result indicated that PEU has a moderate effect on the intention to use the apps. The fifth objective is to evaluate the relationship between perceived ease of use (PEU) and perceived usefulness (PU) of ABC mobile applications. The findings indicate that PEU has a significant impact on the PU of ABC mobile applications.

21. Practical and Social Implications Several studies have been conducted to assess the intention to use technology, utilizing the Technology Acceptance Model (TAM) as a framework. The study makes an important contribution by looking at perceived risk (PR) as a predictor of perceived usefulness (PU) and perceived ease of use (PEU). The concept of risk is not completely understood. The current study adds to the body of knowledge on this topic by empirically analyzing the role of this external variable in the model. The inclusion of Perceived Risk's effect on PU and PEU into the existing body of knowledge reveals that perceived Risk has a medium effect on PU and a large effect on PEU for clients utilizing mobile apps.

22. Limitation & Recommendation Perceived risk has been found to have a considerable impact on PEU and PU. This means that with higher levels of perceived risk, PEU and PU will rise. This effort has set the stage for all managers to begin working on risk management. All marketing communications and promotional actions should be aimed at improving risk perception. As a result, to improve actual mobile application usage, the management should pursue ways to increase promoting the use of mobile applications among customer.

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