Factors that Motivate Consumers Towards Internet Shopping - Assignment Example

? Factors that Motivate Consumers Towards Internet Shopping Concepts on factors that influence consumers’ decision to shop online Online retailing isdefined as “use of an electronic media through which the customer and the marketer may enter into a transaction for sale and purchase, so as to benefit both the parties in the long run” (Sahney, Shrivastava, and Bhimalingam, 2008, p. 34). The same study quoted the definition of an e-market as “an interorganisational information system that allows the participating buyers and sellers to exchange information about prices and product offerings” (Bakos, 1991, p.295). An e-market was also described as “a way of conducting business by companies and customers performing electronic transactions through computer networks (Liu and Arnett, 2000, p. 34). Also, it is “a virtual realm where products and services exist as digital information and can be delivered through information-based channels” (Meuter, et al., 2000, p. 50). These various definitions of online/internet shopping/retailing as the more concrete media, system, or network, to the more abstract “virtual realm” is testament to the various levels this phenomenon affects the psyche and actions of the buying public. It begs the question, “What factors significantly influence shoppers to buy products over the internet?” From a cursory scan of academic literature, it appears that studies on what influences the online purchase decision may be categorized into three general sets of theories: behavioural, rational, and experiential. Based on this observation, this researcher shall classify the theories gathered from the survey of literature and discuss them in groups, then thereafter compare the groups of theories as this researcher perceived them. Rational The rationale to the inquiry as to customers’ purchase intentions, rather than their attitudes or tendencies to patronize internet shopping, is based on the theory of reasoned action by Ajzen and Fishbein (1980) which states that rational intention is a more powerful or compelling force compared to attitude or behaviour on the decision to purchase, and that the antecedents of intention are shopping orientations, online trust and prior online purchase experience. In determining customers’ attitudes towards internet shopping, early studies tended to touch on a wide range of factors including income, involvement, home shopping versus internet shopping experience, even attitude towards the retailers’ brand and attitude towards retailers’ websites. Along this line, Balabanis and Vassileiou (1999) found that high income favours internet shopping from retailers with strong brand names, and that high involvement with a product category affects adversely shopping from retailers’ sites with weak brands. Furthermore, it was determined that customers’ extensive home-shopping experience and positive attitudes towards a retailer’s web site both had positive effects on the shopper’s buying intentions, whether the product had a strong or weak brand (p. 361). Ling, Chai and Piew (2010) had likewise adopted the same approach to test multiple aspects of online shopping over a broad range of market segments to determine any general considerations of the decision to purchase online. Findings showed that such factors as impulse purchase intention, quality orientation, brand orientation, online trust, and prior online purchase experience all positively related to the customers’ intention to purchase online (p. 63). Behavioural The theories that adhere to the behavioural factors propose that customers tend to buy online because certain attitudes, values, and personality traits beyond the scope of reason compel the desire to do so. The result is that the purchase is not so much arrived at as a rational decision but a feeling that the purchase is desirable. Online shoppers’ actions are determined by three elements, namely affect (emotional feelings), intentions (desires), and behaviours, where behaviour is the product of two dimensions: internal pressures (e.g., personality) and environmental matters (social pressures). This is called the Trandis model (Pahnila & Warsta, 2010, p. 622). In determining the customers’ tendency to resort to internet shopping, gender also makes a difference. According to Lee and Kim (2010), women have a higher tendency to resort to internet shopping as well as multichannel use. Sebastianelli, Tamimi and Rajan (2008) found no such distinction between the genders as far as volume of sales is concerned, but did find that a difference existed between men and women in the type of products that they would purchase online. In examining seven electronic retailing (e-tailing) quality dimensions (i.e., reliability, accessibility, ordering services, convenience, product content, assurance, and credibility), women are found to give a greater weight to assurance than men do, indicating that women place a higher priority on security and privacy (i.e., trust in the particular internet shopping transaction). Also, higher income and a higher educational attainment are significant factors in determining shoppers’ tendency to shop online (Lee & Kim, 2010). These studies tend to indicate that gender-based differences with regard to online shopping are founded upon the attitudes, beliefs, and perceptions of these consumers with regard to online shopping. Experiential Finally, there are studies that have differentiated between the initial decision to shop online, and the continued patronage of internet shopping. These theories emphasize on the experiential factors, in particular the degree of satisfaction, risk or familiarity (or lack of such) with which the customers regarded the initial experience/s. Consumers would tend to resort more to online shopping if they perceive that the risk in doing so is low, and if they have had high experience and familiarity with the purchase; conversely, they would tend to use other marketing channels more, such as the call center channel, if the perceived risk is high and their experience and familiarity is low for shopping on the internet. For this reason, companies are discouraged from resorting purely to e-marketing but are encouraged to maintain several channels to address the consumers’ different concerns (Rhee, 2009). Piercy (2009) points to the tendency of many retailers to offer online shopping to their customers, which is relatively easy to set up and entails only a low cost to the business. However, the retailer fails to consider the capacity of delivering the goods or services to the customer, resulting in poor customer service and subsequent customer dissatisfaction. Another consideration is the reason for transference of consumers from offline to online shopping. One factor is the presence of “preference minorities” (Choi & Bell, 2011). When a local offline store offers goods co-located consumers share preference for, then lasting retailer-customer relationships are inevitable. On the other hand, if local consumers have preferences that are dissimilar to the majority, then they become preference minorities, and will be underserved by the local stores, which may tend to lead to patronage for online shopping. This study found that preference isolation is a significant driver of offline to online sales, particularly for niche brands than popular brands (Choi & Bell, 2011, p. 680). Consumers also tend to resort to online shopping in combination with other channels, and would tend to patronize a multi-channel integrated retailer because of the freedom of selection it offers, but tend to be less loyal to the retailer because of the ability to easily compare prices with other retailers through the internet. In the case of multi-channel shopping, one channel is not seen as drawing customers away from the other channels, but of enhancing the decision to purchase by allowing the consumer a greater freedom of choice (Lee & Kim, 2010). This is taken a step further by Rigby (2011) in noting that customers would likely tend to gravitate towards “omnichannel” retailing, referring to an integration of digital and physical experience. Beauchamp and Ponder (2010) perceive the customers’ decision to shop online as primarily determined by perceptions of convenience. This study observes that in both online and traditional shopping, there are commonly executed tasks such as selecting a retailer, searching for product information, locating the desired product, comparing it with alternatives, and checking it out. What differentiates the two are the means of access and their implication on time and effort. Traditional shopping requires selection of a store, traveling and parking, and physically moving through it. Online shopping involves searching for a website, waiting for pages to load, and navigating the website, and thereafter waiting for the product to be delivered. The consumer will choose on the basis of which method he or she finds more convenient. In this sense, retail convenience is seen as a higher-order construct with four dimensions, namely access, search, transaction and possession (Beauchamp & Ponder, 2010, p. 51). What is surprising in the results of the empirical study by Beauchamp and Ponder, however, is that the possession convenience, which was thought to be higher for in-store than online shoppers, was actually higher for online rather than in-store shoppers, pointing to a possible trade-off consumers make among conveniences (pp. 61-62). Source: Beauchamp & Ponder, 2010, p. 51 Overall comparisons among theories There are strong differences in the emphasis placed by the different theories and even further, among the findings classified under them, but from a holistic view the factors identified by these theories are interrelated to a degree that they cannot be completely separated or differentiated from each other. Rationale influences behaviour and vice-versa, because the purchase decision may begin as a weighing of advantages and disadvantages (a rational activity), but the ultimate commitment to purchase is governed by the person’s conviction, the fear of risk or the desire of a benefit (a behavioural activity). After the customers have had experience with online shopping, experience becomes an important consideration for their subsequent decisions to purchase, which further reinforces both the rational and behavioural processes undergone in the initial purchase. Experience becomes an equally important consideration in assessing the purchase activity of online shoppers. Philosophies encountered in the research Fundamentally, two philosophical schools of thought influence the research on internet shopping, namely utilitarianism and hedonism. The table in the appendix show a survey of the existing literature and how they are situated within the scope of the utilitarian and hedonic values (Pahnila & Warsta, 2010, pp. 623-624). Aside from utilitarianism and hedonism, however, it is possible to consider employing the other philosophies. Utilitarianism Utilitarianism states that “actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness” (Bykvist, 2010, p. 21). Simply stated, under the utilitarian philosophy, the action that is best undertaken is that which creates the greatest benefit for all possible beneficiaries on the whole. In the studies surveyed, the utilitarian approach would tend to emphasize on factors involving cost savings, reduction in time and effort, ability to source products that are not carried by local stores, and similar practical benefits. As seen in the table in the appendix, many authors have agreed with this philosophy in the study of online retailing. For others, however, criticism may revolve around the observation that incidences that may be observed during the research may involve shoppers who are buying under pressure, and may not have resorted to online shopping out of choice, but to accomplish a crucial need at the moment. In any case, this error may be avoided if a sufficiently large representative sample were obtained. Hedonism According to hedonism, an act is the best alternative if it creates the greatest amount of pleasure and minimizes pain to the greatest extent (McLaughlin & Muncie, 2006, p. 197). The pleasure that is obtained is in the form of such valid intentions as willingness to purchase from an online retailer, fulfilment of acquiring a desired object online, or even as a form of entertainment or diversion. It is possible, however, that dysfunctional attitudes or behaviours may influence the decision such as more severe forms of escapism (as seen in the table) or negative tendencies of uncontrolled acquisition and hoarding, which should not form part of the findings. All considered, the matter of pleasurable feelings is a highly internal and intangible thing which the customers themselves may not accurately articulate because of subjectivity. For this paper, at least, hedonism will not form part of the research philosophy because of the difficulty of assessing its accuracy and objectivity. Rationalism Rationalism is “any view appealing to reason as a source of knowledge or justification” (Lacey, 1996, p.263). The philosophy of rationalism relies not upon what is sensed or experienced, but upon intellectual matters that have been arrived at through deduction. In this study, rationalism may be observed to overlap with the earlier mentioned utilitarianism, because some of the benefits derived will be intentionally sought for by the shopper and would therefore have been a product of rationalization. Utilitarianism will differ, however, in that some benefits may have been incidental and originally unintended, but should be considered just the same because they add to the total use derived out of the online shopping event. Therefore, for this study rationalism will create an opportunity for an enhanced discussion of the benefits derived from utilitarianism, from the point of view of the reasoned intention of the online shopper in the use of the internet e-channel. Phenomenology According to this philosophy, phenomenology relies upon knowledge that considers “appearances” – that is, all contents of consciousness as they exist, without prejudice to their nature or source. The building blocks of phenomenology are concrete experiences undergone by the principal actor and of which he or she has first-hand personal knowledge, and which are organized into concepts and principles in an appropriate sequence. Experiences are “the perceived material and mental phenomena and intuitions relating to self, and the conceived, abstract derivatives of the preceding” (Sion, 2005, p. 23). Applied to online shopping, this would pertain to the degree of satisfaction or dissatisfaction encountered because of the experience. It differs from the feelings of hedonism because the emotions and behaviors under hedonism precede the online shopping experience, while that of phenomenology will be defined as proceeding out of the early experience and extending to future decisions to shop online. The study will make use of phenomenology to examine repeat resort to online shopping. Positivism Positivism as a philosophical outlook views sensory experience as the only relevant basis for consideration in making decisions. Knowledge must be in a form that appeal to the senses and may be described, measured, and assessed on that basis. Positivism is the foundation of scientific research, and is best applied in the social and natural sciences (Corby, 2006, p. 49). For this paper, positivism shall be taken into consideration in so far as the stated intention, experience, or reason produces actual sales. The study will relate the perceptual data to the actual volume or value of transactions that result from the online shoppers’ internal decision-making process. The higher the volume or value of transactions, then the greater the degree of validation of the eventual findings arrived at. Conclusion This brief review points to the different theories that may be employed in identifying the determinants of the purchase decision in online shopping. The theories pertain to the rationale, behaviour and experiences of the online shopper and how they result in a tangible purchase of online goods or services. Philosophies that may be used are rationalism in tandem with utilitarianism, phenomenology, and positivism, as they may apply to online retailing. References Ajzen, I & Fishbein, M 1980 Understanding attitudes and predicting social behavior, Prentice-Hall, New Jersey Bakos J Y (1991), “A Strategic Analysis of Electronic Marketplaces”, MIS Quarterly, Vol. 15, No. 3, pp. 295-310 Balabanis, G & Vassileiou, S 1999 “Some Attitudinal Predictors of Home-Shopping through the Internet” Journal of Marketing Management, vol. 15, pp. 361-385 Beauchamp, M B & Ponder, N 2010 “Perceptions of Retail Convenience for In-store and Online Shoppers.” Marketing Management Journal, vol. 20, issue 1, pp. 49-65 Bykvist, K 2010 Utilitarianism: A Guide for the Perplexed. Continuum International Publishing, New York, NY Choi, J & Bell, D R 2011 “Preference Minorities and the Internet” Journal of Marketing Research. Vol. XLVIII (August 2011) pp. 670-682 Corby, B Applying Research in Social Work Practice. Lacey, A R 1996 A Dictionary of Philosophy, 3rd edition. Routledge, London Lee, H-H & Kim, J 2010 “Investigating Dimensionality of Multichannel Retailer’s Cross-Channel Integration Practices and Effectiveness: Shopping Orientation and Loyalty Intention.” Journal of Marketing Channels, vol. 17, pp 281-312 Ling, K C; Chai, L T; & Piew, T H 2010 “The Effects of Online Shopping Orientations, Online Trust and Prior Online Purchase Experience toward Customers’ Online Purchase Intention” International Business Research, vol. 3, no. 3, pp. 63-76 Liu, C & Arnett, P K 2000 “Exploring the Factors Associated with Web Site Success in the Context of Electronic Commerce”, Information & Management, Vol. 38, pp. 23-33. McLaughlin, E & Muncie, J 2006 The Sage Dictionary of Criminology Pine Forge Press, London Meuter. M L; Ostrom, A L; Roundtree, R I; & Bitner, M J 2000 “Self-Service Technologies: Understanding Customer Satisfaction with Technology Based Service Encounters”, Journal of Marketing, Vol. 64, July, pp. 50-64. Pahnila, S & Warsta, J. 2010 “Online shopping viewed from a habit and value perspective.” Behaviour & Information Technology, Nov-Dec 2010, Vol. 29 Issue 6, p621-632; DOI: 10.1080/0144929X.2010.501115 Piercy, N 2009 “Positive management of marketing-operations relationships: the case of an internet retail SME” Journal of Marketing Management. Vol. 25, no. 5-6, pp. 551-570 Rhee, E 2010 “Multi-channel management in direct market retailing: Traditional call center versus Internet channel.” Database Marketing & Customer Strategy Management. Vol. 17, no. 2, pp, 70-77. Rigby, D 2011 “The Future of Shopping,” Harvard Business Review, December 2011, pp. 65-76 Sahney, S; Shrivastava, A; & Bhimalingam, R 2008 “Consumer Attitude Towards Online Retail Shopping in the Indian Context,” ICFAI Journal of Consumer Behavior, vol. 3, issue 4, p. 34-68 Sebastianelli, R; Tamimi, N; & Rajan, M 2008 “Perceived Quality of Online Shopping: Does Gender Make a Difference?” Journal of Internet Commerce, vol. 7, issue 4, pp. 445-469 Sion, A 2005 Phenomenology: Basing Knowledge on Appearance. Self-published. Full view available at http://books.google.com.ph/books?id=pFlxAH1Iq-EC&printsec=frontcover&dq=Phenomenology&hl=en&ei=1v3iTt3YAcrEmQXivsXPCA&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCwQ6AEwAA#v=onepage&q=Phenomenology&f=false Appendix Sourced from Pahnila & Warsta, 2010, pp. 623-624 Read More