Online consumer behaviors - Essay Example

?Running Head: E-Commerce Online Consumer Behaviors A Research Paper Introduction Addictive, compulsive, and impulsive buying are types of uncontrolled consumer behavior that have drew interest in actual shopping settings. Personally, uncontrolled buying can lead to serious life problems and consumer impoverishments. Generally, it could raise consumer prices and sustain the social problems of extreme poverty (LaRose & Eastin, 2002). Now that buying and selling have reached the Internet, has uncontrolled buying behavior become more intense? LaRose (2001) reported that major e-commerce sites possess attributes that could encourage uncontrolled buying behavior. Studies show that online buyers were more impulsive than traditional ones and that that impulsive consumers comprised a significant portion of the general population of e-commerce buyers. There was sketchy proof of addiction in statements of ‘eBay addicts’, a study on compulsive online buying (Chen, 2009). With vast numbers of online shoppers today, uncontrolled online buying emerges as a major consumer problem. Examining Online Consumer Behaviors Teenagers and young adults are the target market of online shopping because they are the first online generation of buyers. This social group spends roughly 12 percent of their whole earnings online, and these purchases are mostly books, music, and clothes commonly linked to compulsive buying (LaRose & Eastin, 2002, 549). Young people are particularly predisposed to unreasonable buying habits because of their tendency toward ‘excessive’ online activities and uncontrolled traditional buying as well as easily accessible credit cards. According to Milne and colleagues (2009), research on compulsive buying shows that these tendencies are developed in late adolescence. According to developmental studies, Milne and colleagues (2009) added, depression negatively affects adolescents and young adults more often than other age groups, and depression has been discovered to significantly influence the emergence and growth of extreme buying habits. Undoubtedly, the buying habits of people have changed. As stated in the 2010 report of Forrester Research, online revenues will be at $331 billion in the United States alone. The enlarging population of online buying households along with website upgrading and retailer improvements will push e-commerce to form 13 percent of overall retail earnings in 2010 (Chih-Chung & Chang, 2005, 41). Online revenues will increase at a 15 percent compound annual growth rate between 2004 and 2010. Therefore, as the Internet continuously becomes a widespread channel for consumer activities across the globe, it becomes ever more crucial to determine the aspects influencing consumer use of e-commerce. A number of studies examine the aspects influencing consumer online buying. However, Goldsmith (2010 as cited in Chih-Chung & Chang, 2005, 41) states that most studies on online buying habits is quite explanatory and not derived from consumer theory. Therefore, this paper uses the social cognitive theory of Albert Bandura to examine online consumer behavior. According to Faber and O’Guinn (1992), media were given an insignificant role in uncontrolled buying behavior in the past: encouraging consumer impulses with marketing or advertising. With the intervention of the whole retail industry thru e-commerce, a more inclusive theoretical perspective is needed. LaRose (2001) consolidated addictive, compulsive, and impulsive buying within the paradigm of Albert Bandura’s social cognitive theory, asserting that they created a range of behavior characterizing different levels of poor self-control. Nearly all consumers have a tendency to buy impulsively, which is to purchase rashly, irrationally, and spontaneously (LaRose & Eastin, 2002, 549). For several consumers, the yearning for particular products or services changes to a common yearning for compulsive buying, which is repeated, persistent buying that becomes a main reaction to unpleasant emotions or experiences (LaRose & Eastin, 2002, 549). Compulsive buying turns into a behavioral addiction once abuse becomes a habit. Although the roots of uncontrolled buying are not yet known, classical learning theory is widely used to explore its development. Tempting product-oriented stimuli produce an adapted emotional reaction that overpowers rational economic decision. Eventually, the adapted reaction influences buying behavior (Jeon, Crutsinger, & Kim, 2008). It becomes of a way of self-medicating the unfavorable impact related with the mounting life difficulties and indebtedness brought about by irrational buying. A cycle of depression arises, concluding with a serious life problem (Chen, 2009). Yet, classical learning theory failed to clarify how many individuals are successful in avoiding or remedying addiction by themselves. Certainly, when the addictive habit is as ever-present, socially accepted, and basic as buying, how can any person avoid the plunge into misery and debt? Classical learning scholars consider self-discipline to be deceptive. Yet, poor self-discipline characterizes uncontrolled buying both in theory and in practice. Social cognitive theory improves the argument of classical learning theory to give explanation to self-discipline. Individuals are self-conscious and are capable of reasonably planning potential behavior in view of the observed outcomes of previous decisions and behavior (Bandura, 1986). Uncontrolled consumers may have sensible buying decisions overpowered by product motivation at the impulsive point of the uncontrolled buying scale or by increasing life problems at the compulsive and addictive points of the scale (Bandura, 1991). Still, they are capable of controlling their buying behavior through the process of self-discipline and its secondary processes of self-reaction, critical thinking, and self-evaluation (Bandura, 1991). In the existing perspective, self-reaction could involve giving actual rewards for regulated behavior, developing self-worth, or throwing one’s self in guilty emotions about unnecessary purchases or bankruptcy. Self-reaction is activated by self-evaluation of buying behavior and assessing buying behavior with regard to social or personal values. Depressed individuals have a lower tendency to recognize accomplishments at self-control and hence are not likely to use self-rewards that may regulate their buying behavior (Hansen, Percy, & Hansen, 2004). In particular, the detrimental cycle of depression and uncontrolled buying may stem from poor self-control that is lowered by despair. LaRose (2001) described the path, indications, and treatments of uncontrolled buying through self-control processes. Self-evaluation is disturbed by product displays, service offerings, or buying-related feelings. Unexpected similarities to one’s previous buying sprees, gender stereotypes, or product endorsers weaken the critical thinking mechanism (LaRose, 2001). According to LaRose and Eastin (2002), uncontrolled consumers shop by themselves or use mediated shopping programs to bypass cues of standards for usual buying. Selling, trading, giving away, returning, and storing unwanted objects may counteract the self-reactive stimuli of liability and guilt. The personality features of desire, envy, and fancy related with compulsive buying might suggest inclinations to have self-evaluation overpowered by product desires and to view oneself with regard to other irrational consumers (Milne et al., 2009). The actual correlation between compulsive buying and poor sense of worth may show the depression cycle discussed above, because depression and low sense of worth are connected. Treatments directed at maintaining an updated list of purchases, diverting oneself when buying impulses arise, or keeping away from shopping mall help revive appropriate self-evaluation. Focusing on credit card limits revives the critical thinking mechanism, whereas making a shopping list or eagerly entertaining guilty emotions cultivates self-reaction (Huffman, Ratneshwar, & Mick, 2000). Elements of major e-commerce sites could destabilize self-control. Product displays using vivid images, striking interactive ads, and the thrill created by e-mail notices of auction, promos, and sales may weaken prompt and correct self-evaluation. E-mail communication with sales guides, online chat rooms, and consumer forums may give beneficial connections with other excessive buyers. Point incentives and promos are self-reactive stimuli that can defy guilty feelings or financial fears. Instantly and openly accessible online shops gratify buying impulses as they progress and where they initially take place (Gao, 2005). Components that could strengthen self-control, like purchase histories, shopping carts, and search engines were available, as well, but were overwhelmed by negative ones. Hence, some argue that excessive buying is brought about by poor self-control, which is a condition where in conscious self-discipline is weakened (Gao, 2005). According to LaRose and Eastin (2002), it is shown in the symptoms of addictive, compulsive, and impulsive buying, but these symptoms are viewed as markers of poor self-control instead of a personality attribute. Poor self-control is a temporary condition, even among individuals who could be identified as ‘compulsive buyers,’ and it overlaps and fights with rational and critical thinking processes. Although biophysical and personality aspects may activate uncontrolled buying, every person has the capacity to regulate irrational buying by reviving productive self-control (Chih-Chung & Chang, 2005). Nevertheless, external incentive in the product-driven context may defeat self-regulation. According to Bandura (1986), two additional socio-cognitive factors should work with self-control: (1) self-efficacy, and (2) outcome expectations. Outcome expectations are ideas about the results of behavior. Favorable outcome expectations, like cutting down transaction costs and locating good deals online, were the foundation for e-commerce theories and differentiated non-shoppers from online shoppers. These sensible buying purposes counteract poor self-control as buyers strive to sustain rational behavior through assessment of buying results (Bandura, 1986). Nearly all buyers are defeated in the fight, at least at times, addictive or compulsive consumers often lose it. The need to conduct a behavior is not enough to perform it. A person should also have the perceived capacity to carry it out. According to Bandura (1991), self-efficacy is trust in one’s capacity to take part in activities that will result in major accomplishments. This is possible not a relevant concern in traditional shopping contexts, where consumers gain buying skills at an early age. Still, knowledge of the Internet creates hindrances to online buyers. According to Milne and colleagues (2009), online self-efficacy and expected outcomes were discovered in the past to determine general Internet use and the taking up of e-commerce transactions. However, as argued by Goldsmith (2001 as cited in Chih-Chung & Chang, 2005), numerous studies on online consumer behavior is entirely explanatory and not rooted in consumer theory. The original line of study pertinent to the theory of planned behavior (TPB) was in relation to transportation and ease (Chih-Chung & Chang, 2005). James and Cunningham (1987 as cited in Chih-Chung & Chang, 2005), for instance, argued that online buyers focus more on the convenience or ease of shopping. On online stores, buyers are given the opportunity to make purchase around the clock without the constraints of national borders and location. In addition, it is easy to buy foreign or imported products, without having to bear the transportation difficulties of conventional shipping or delivery procedures. Likewise, Li and colleagues (1999) emphasized that the Internet offer buyers an easier buying process to save time. Hence, the more importance that the buyer places on convenience and easiness, the more probable it is that the buyer will prefer online shopping. Furthermore, by using search engines online consumers can immediately locate the products or services they are looking for, details about important products, and can save effort and time used up looking for information. Findings about the other positive features of online shopping are also available. For instance, Alba and colleagues (1997) found out that to a number of consumers with not much shopping knowledge or familiarity, who disliked to buy in stores or in public, online shopping’s anonymity gives them the pleasure of shopping without any unfavorable influence from outside forces. The researchers stressed that the Internet’s anonymity permits consumers to buy confidentially or in private the products that may make them uncomfortable to buy in public. Online stores also suggest more products and services, and it is more convenient to buy new, rare or unique goods not offered in traditional retail shops. In addition, it assists consumers in exploring products or services required in the future, and gratify certain habits and desires (Alba et al., 1997). From the findings about online consumer behavior discussed earlier, we observe that when a person’s thoughts about online shopping are more positive, the consequential behavior purpose is greater. In contrast, when a person’s thoughts are more adverse, the behavior purpose is lesser. Hence, it may be hypothesized that the greater the positive thoughts about online shopping, the greater the behavior purpose of buying online. In relation to subject norm (SN), or the second element of TPB, a study by Hansen and colleagues (2004) discovered that an online consumer would be affected by social contacts, friends, and loved ones about whether or not to buy online. Simply put, the greater the social pressure confronted by an online shopper or the greater the incentive to conform, then the greater the behavior purpose and SN would be. In contrast, the lesser the social pressure, or the lesser the incentive to conform, then the lesser the behavior purpose or SN would be (Hansen et al., 2004). Hence, it can be hypothesized that the more positive the SN perception of online buying, the greater the behavior purpose for online buying. Regarding personal behavioral control (PBC), or the third element of TPB, concerns surface about individual information security and privacy. Freehill and colleagues (2000 as cited in Chih-Chung & Chang, 2005, 41) reported that 18 percent of websites had features to safeguard users’ confidentiality, and 12 percent of websites provided an online statement for user’s security and confidentiality. 6 percent of websites made use of outside examiners to observe privacy and security standard policies (Chih-Chung & Chang, 2005, 41). As owners of websites focus less on the security and privacy of individual information, a buyer’s objective of using online stores was considerably lowered. Concerning hardware, nearly all consumers whined that websites were hard to surf, and it was hard to locate particular product offerings (Gao, 2005). Furthermore, Huffman and colleagues (2000) stressed that online users declined to buy online when they are not sure of the security and privacy of transactions. According to Chen (2009), as reported by the Taiwan Institute of Information Industry, one of the motives for the refusal of consumers to buy online were that using online stores was not appealing to them, or they were doubtful of online shopping procedures, difficult return or exchange guidelines, complex transaction methods, and/or approved policies of transaction. Moreover, as stated in the report of CNET (2001 as cited in Chih-Chung & Chang, 2005, 42), additional causes are consumers could not locate the products or services they need or want, realized that the transaction is tedious, found it hard to locate the shopping cart, and thought that online shopping is risky. Hence, we observe that when people realized that a behavior was not that difficult to regulate, and there were a smaller number of hindrances and more support in this behavior, then the greater the behavior purpose (Miyazaki & Fernandez, 2001). In contrast, the reverse circumstances would give rise to lesser behavior purpose. Meanwhile, the earlier shopping experience of consumers influences potential buying choices (Chen, 2009). Hence, when consumers have more buying familiarity with a particular product or service, they gain more product awareness more effortlessly. Earlier buying experience had the same impacts on online users for a similar cause. When buyers carry out after-purchase-evaluations, they produce important mental response. Such experiences will keep on influencing later buying choices (Chen, 2009). Thus, the buying behavior is a circular response mechanism. Other studies showed that online buying experiences influence buying purpose. According to LaRose and Eastin (2002), although using online stores has just been feasible for several years, the further familiarities that the buyer has on the Internet imply a higher likelihood that s/he will turn out to be an online buyer. Lastly, a consumer’s familiarity of different buying approaches may affect buying behavior. As online stores was a developing buying medium, Li and colleagues (1999) assumed that aside from specific skills, Internet knowledge was essential to online buying. The capacity to use online stores was referred to as ‘channel knowledge’. Studies demonstrate as well that, with growing channel knowledge, the motive to buy online also grows. Conclusions Online and traditional consumer behavior has similarities and differences. The domain of electronic commerce is not as ground-breaking as many would have thought. The consumer decision phases, for example, are fundamentally similar whether the buyer is offline or online. In contrast, the wide-ranging consumer behavior framework necessitates adjustment to integrate new aspects. For example, because buyers almost regularly go to a store and start from the right lane, important and popular products are placed there. And since it is common knowledge that consumers buy new dairy goods or fresh vegetables and fruits often, they are placed at the rear of grocery stores. Appropriate store layout and accurate monitoring of buyers is an old practice; however, its practical application on the Internet, its more cost-effective method, its universality and its range online are new. With regard to Internet browsing behavior, several scholars and researchers have reported that taking into consideration the demographic attributes of online users is not important anymore. As shown in the studies cited earlier, many think that the most significant determinant of online consumer behavior is the surfing or browsing behavior of Internet users. The assumption is that this search pattern for product and service information will allow marketers to accurately identity what buyers were searching for at every time and their capacity and willingness to pay, enabling the marketers to accurately plan and implement their communications. Online marketers capitalize on the potentials of the Internet. It takes as fact no earlier information on the buyer and can be improved vigorously as buyers make use of the Internet. It provides the most wide-ranging information that can be perfectly converted into valuable knowledge thus giving us the utmost advantage and allowing us to acquire far greater outcomes. References Alba, J. et al. (1997). Interactive home shopping: Consumer, retailer, and manufacturer incentives to participate in electronic marketplace. Journal of Marketing, 61(3), 38-53. Bandura, A. (1986). Social foundations of thought and action: A social cognitive theory. Englewood Cliffs, N.J.: Prentice-Hall. Bandura, A. (1991). 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