Behaviors of Internet Shopping - Research Paper Example

 Behaviors of Internet Shopping Abstract  Internet usage has skyrocketed in the past few decades, along with this increase comes the increase in internet shopping by consumers. This research examines the behaviors, motivations, and attitudes of this new form of consumer entity. Online consumer behavior has been studied for over 20 years and will undoubtedly be the source of many future researches as internet consumerism expands. This paper will examine the following research questions: (1) How do factors previously researched affect the online purchasing behavior of consumers and (2) what are the significant consumer behaviors both positive and negative that affect internet consumerism? By identifying these factors and variables, new strategies can be formulated and both consumer and supplier can gain knowledge and understanding of behaviors which exist. The purpose of this research paper is to integrate the varied research information together and draw coherent linkages to how consumer thoughts, attitudes and motivational behavior affect online buying, thus building a broader framework of analysis in which to build upon.  Researching Behaviors of Internet Shopping 1. Introduction  1.1 Background The Internet has been accessible to the public for over twenty years. It came upon the scene and has exploded in popularity like few things have ever done in the history of the world. Since the introduction of the World Wide Web, the interest in the value of commerce and individuals has been growing. Skeptical at first, online consumerism has steadily increased and along with it has come some positive and negative behaviors. The purpose of this research is to understand the motivation for online consumerism. Online consumer behavior, according to Delia Vazquez and Xingang XU (2009), is affected by three main things: “attitudes towards online shopping, motivations, such as price, convenience and hedonic motivations, and online information search”. If a person is positive about the experience of shopping on the Internet then that attitude will affect the outcome of purchasing online. Also online consumers feel more in control when they can search with relative ease, prices and special offers. This price comparison is in itself, a great motivational tool. The fact that more information is available online concerning products also allows the consumer to feel that better information, will lead to better decision making on their part.  1.2 Rationale for research The internet has facilitated information search for consumers. It is now a powerful medium which enables consumers to search, inspect, and in many cases procure a sample and then make online purchases. This ability has transformed the social and spatial aspects of shopping for many consumers. Because of the huge amount of data and information available, consumers can now compare prices, check availability, and ascertain value of the product (Brown, Pope & Voges, 2003). While this appears to be a great motivation tool that influences consumer attitude towards online buying, four consumer online concerns, identified as privacy, security, credibility, and virtual experience (Janda, 2008), hinder the growth of online consumerism. In the competitive global market place, the marketer must know exactly what motivates or discourages consumers from engaging in online buying. 2. Literature Review 2.1 Definition Consumer behavior is defined as “the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society” (Perner, 2008). By identifying the behaviors that support buying online and those which do not, businesses can help to increase profits and will help to assure their share of the market, as electronic trade may well out-step traditional buying in the not too distant future.  2.2 Influence of internet Perner (2008) conducted a study concerning the scale items of attitude, motivations and searches of information. While data was collected across different age groups, almost 79% of the respondents had exposure to the internet for over five years. The results clearly showed that online shopping motivations, information searches, and attitude all had a significant effect on online purchases.  That internet exposure influences online consumerism has also been endorsed by Koyuncu and Lien (2003). They concluded that consumers, who had more experience with the internet, felt more comfortable navigating it. Consumers also felt safer in using the internet at their residence or on the job, rather than community computers. This study had over 10,000 participants out of which 7026 considered themselves online shoppers, while 1691 did not. Attitude towards the internet are related to online buying behavior. Online customers have been segmented by Kau, Tang and Ghose (2003) based on six different attitudes and behaviors. Not all are significant for online shopping and hence only the relevant segments are discussed here. The authors first discuss of the on-off shoppers that seek information online but prefer to make the purchase offline. The comparison shopper prefers to make comparison of the prices, features and offers before making the purchase decision. Then there are the dual shoppers that compare brands and product features but do not look for deals. 2.3 Online shopping environment The atmospheric elements in traditional offline shopping contexts, influence approach behaviors. It is possible to induce positive emotions such as pleasure and arousal. The online shopping environments are smaller theatres of experience, according to Demangeot and Broderick (2006) and require some technological skill to be navigated successfully. They cannot be perceived with as many sense but they are interactive and have immersive qualities leading to engrossing experiences. The experiential elements of the web sites should be the distinguishing feature and not the usability elements. This suggests that marketers can expect loyalty from consumers that have positive experience with their online purchases. Hence, the online shopping environment contributes to a positive experience and thus can be termed a motivator. Motivation comes from a satisfying online experience and researchers have found that consumer satisfaction enhanced by Web design contributes in a positive way to online consumer behavior Gao (2005). The website design creates the shopping environment for the online shopper and hence the area of esthetics is important. Consumers’ perception of the online space design influences online purchases. Gao defines perception as, “a three step process that involves selection, organization, and interpretation of the information received in a meaningful way”. If the perception is positive to what is seen and read online, the overall experience tends to be also positive. Web site aesthetics such as ease of use, design, and personalization are important. The attractiveness and organization of the website sends an instant message to the consumer and influences them in issues of trust and confidence. It also enhances customer satisfaction.  A major part of esthetics is how information is arranged on the web page. Too much information can overwhelm a consumer, too little can decrease consumer confidence. Stibel (2005) conducted research and the tests performed by him showed how online information presentation failed in many ways. His results showed clearly that “category information presented in an alphabetical list allowed consumers the ability to navigate to their destination much faster than when they were asked to traverse a hyperlinked hierarchy”. Simplicity is the key. Consumers want to navigate with the least amount of effort. Clarity in the web design gives consumers the confidence in their ability to do so. This research led Stibel to identify a mental model of consumers, which concluded that people wanted information presented in concise and understanding ways. The ability of online businesses to do this is imperative because it leads to a “more intuitive and compelling online experience, contends the author. There is a sub-group of online consumers that have been recently identified. This group has been termed, the “net-geners or net generation”. This term is defined as, “individuals born between 1977 and 1997 and is the first generation to grow up surrounded by digital media and the Internet” (Donghyun & Ammeter, 2008). This group understands technology and is comfortable with Internet commerce. The net-geners are the first generation that will actually surpass the baby-boomers in population size. Because of their knowledge and their numbers, it is safe to say that business as usual is in for a transformation. As the elderly portion of our population die and new individuals are born, this new way of doing business will be the reality that is known throughout life. The sky is indeed the limit in the progression of online consumerism.  However, Brown, Pope and Voges (2003) contend that convenience is not the prime motivation for online shopping as many previous studies suggest. According to the authors online shopper typology consists of economic, personalising, ethical, and apathetic shoppers. The economic shopper is the most frequently identified in studies. Online environment enables comparison of offers without having to physically move from one location to another. They look for the cheapest and best deals and seek value for money. Recreational shoppers enjoy the act of shopping and actual purchase is not important. The apathetic shopper or the inactive shopper is the single largest segment of consumers. This study was a general research on online buying motivations and did not consider any particular product. Consumers look for innovation and those that had made prior purchases had intention to shop online again. Online shopping is an experience and customers derive value from experience. Therefore, marketers cannot rely on merely providing the product or service (Fiore, Lee & Kunz, 2004). It is the responsibility of marketers to engage the customers in a pleasurable, memorable event during the sales of the product or while providing the service. Apart from the utilitarian value that online shoppers find in the acquisition of a product, they also derive hedonic value. The shopping experience should satisfy the shoppers need fantasies, feelings and fun, contend Demangeot and Broderick (2006) who explored the experiential intensity of the online shopping environment. Shoppers undergo various emotional states as they are exposed to different experiential cues. In a familiar environment the shopper would knowhow to negotiate his way through symbols and options such as shopping carts, check out etc. An attractive layout and product presentation can keep the customer engaged and allow enjoyable experiences (Jeong, Fiore, Niehm & O’Lorenz, 2009). 2.4 Communication – the greatest motivator Unlike shopping in a store on-site, one of the most important traits of online shopping is bidirectional communication capability (Donghyyun & Ammeter, 2008). They go on further to explain how online shoppers have greater access to communicate with those they are buying from. This communication can take place in such ways as bulletin boards and e-mails. This gives consumers a perception of personalized assistance. In contrast to this scenario, is the fact that we are losing our ability to maintain a high level of customer service on-site. The employees many shoppers encounter seem more to be filling a spot than actively engaging in helping consumers with purchases or becoming knowledgeable about what they sell.  Thus, since online shoppers lack face-to-face communication, some interaction online would help boost online consumerism. To make up for lack of communication, at least after-sales-service should match the service provided by offline stores. Dennis, Harris and Sandhu (2002) found that consumers are shying away from online shopping because of poor after-sales-services and unreliable delivery. 2.5 Obstacles to online shopping However, online consumerism is not without apprehensions. The four concerns identified by Janda (2008) - privacy, security, credibility, and virtual experience – are important when people think of making online purchases. These factors have a negative effect on online purchasing. It is relatively simple for information to be collected from consumers whenever one logs onto a site or makes a purchase. Some information, such as name, address, phone number and credit card, is gathered through direct questioning and other information is gathered through tracking software. This transference of information makes some consumers nervous and they do not want to take the risk. Another point to consider is the credibility of the person or business in which one is dealing with. Questions arise about trust, description of merchandise, warranties, shipment, returns, and follow-up correspondence. Although this concern, though valid, has according to research, had very limited negative effect on consumer buying habits.  2.6 Compulsive buying Another negative behavioral pattern well documented is that of compulsive buying tendencies. These tendencies to over buy can have detrimental effects on the consumer, notably affecting monies, feelings, and relationships. A study conducted by Kukar-Kinney, Ridgway, and Monroe (2009) found that somewhere between 5 and 9 percent of America’s population could be identified as people who have a propensity to compulsively buy. Motivators of this type of behavior include the very key ingredients of online shopping. These motivations are the following- items may be purchased at any time, shopping can be done frequently, a broader variety exists, and also purchases may be brought in private.  The actual detailed research conducted involved many aspects. The penchant to buy compulsively was measured using a buying scale that included six focuses. These scale items included, unopened packages at home, labeled by others as a shopaholic, how much time actually spent shopping, buying unneeded items, buying unplanned items, and if the surveyed considered themselves an impulse buyer.  Research was also conducted using a 22 statement survey in which the surveyed agreed or disagreed with the following statement, “In comparison to retail stores, I shop on the Internet when buying clothing and accessories for myself because…” The 22 statements included areas that linked to, “buying unobserved, product variety, social interaction, and immediate positive feelings.” An analysis of the information showed that compulsive online consumer behavior was in part explained by motivations of the shopper. All motives set forth in this study exhibited an important positive connection to the compulsive buying scale except for one and that was the product variety motive. The overall findings concluded, as the researchers had hypothesized that compulsive buying strongly affected consumers’ decisions to make purchases using the Internet.  However, this study has its limitations. The subjects were relatively wealthy women, who frequented expensive internet retailers. I believe, as they do, that this assessment represents a bias in the general population. The research also only tracked the behavior of women. Compulsive online consumer behaviors are not gender specific and therefore this research, in my opinion, is somewhat flawed. Another weakness noted in this study was the amount of people surveyed in the first example with a total number of a little over 300. I do however think that one of this study’s greatest strengths was the broad base of surveys conducted.  An Internet survey of 100 people revealed that more than 1660 sites are available from which consumers make online purchases (Pablo, 2008). Online participation in auctions has also increased. Crutsinger, Jeon and Kim (2008) identified seven motivators of online auction participants. These motivators were, “search costs, product assortment and price, brand equity, transaction costs, customer orientation, perceived quality, and social interaction”. The collected data revealed 90.9% were regular users of the Internet. Although most of those surveyed had participated in online auctions, the majority of them (80.6%) conveyed that they had never sold anything online. Thus the search costs were the most important motivation followed by product assortment/price, brand equity, transaction costs, customer orientation, and perceived quality. Social interaction was the least important motivation associated with online auction behaviors”. There is no doubt that college students are very involved Internet participants. Studies like this one show the need for businesses to see the value of online auctions and use this prospect to increase their customer base. This research, however did not address the negative component of online auction consumer behavior. These types of behavior may fall into one of two categories, such as impulse buying or compulsive buying. Further research would need to be done in order to fully understand online consumer auction behavior.  2.7 Summary of literature review The attitude towards online shopping has changed because of the high level of internet usage. Most online shoppers have had internet experience of over five years, which suggests that they can navigate the Net with relative ease. Thus several motivations for online shopping have been identified: 1. Those who are at ease with the internet engage in online shopping. 2. Some just search for information and make purchases offline. This could be linked to privacy and security reasons. 3. Online shopping environment – this includes ease of navigation, esthetics, information layout and communication. 4. Convenience 5. Excellent offers 6. Some just enjoy the act of shopping and do not actually make any purchase. 7. Some seek information and comparison of product features, price and deals Overall customers want to derive value from experience but then the shoppers also seek the same after-sales service as in traditional shopping. If instant communication is lacking, it could lead to lack of confidence and thereby no online shopping. Based on the above factors of motivation, the framework for the study would be developed. The questionnaires would be developed keeping in mind the attitude of consumers observed through the reviewed literature. The four consumer types as suggested by Brown, Pope and Voges (2003) - economic, personalising, ethical, and apathetic shoppers, would be taken into account and added to these would be the compulsive shopper. The motivation for compulsive shopper would also be interesting to study. 3. Research Methods  3.1 Research strategy The research prospectus on online consumer behavior will be conducted through an empirical and nomothetic approach. It will be a quantitative study on public school teachers within a New Orleans school district. The hypothesis set forth is as follows: Online consumer patterns change because of positive or negative experiences in the past. 3.2 Data collection The methodology will be a self-administered questionnaire of twenty-five well developed items of online behavioral patterns. Motivators will include costs, variability of product and price, customer orientation, ease of transaction, perceived quality, satisfaction of purchases, resolution of complaints, and number of purchases made in the past six months. 3.3 Data analysis The Likert scale will be employed to determine responses. Data analysis will be used to compute a mean score for each participant. To summarize each participants responses for each motivator, descriptive statistics will be incorporated. A perceived bias of this study could be noted in the total population of women represented and the college education level of the participants. In order to test reliability, a repeat survey could be done at another correlating school district.  4. Conclusion As seen in this research, online consumer behavior hinges on many aspects. These aspects are consumer driven and at times, able to be manipulated by educated retail vendors. The popularity of online buying as previously mentioned has not begun to reach its apex. The results of the studies presented in this paper have great significance in retail marketing, psychology, and the social sciences. I believe as the future of retail is pondered, this research will continue to grow as the shopping habits of consumers look more and more to the Internet. This information will also help to assist in the further advancement of theories, motivations, and behavior predictability of consumers online. Future research will need to expand on how to successfully draw consumers online utilizing the positive motives that will keep them satisfied, confident, and coming back. Much has been learned about the attitudes, thought patterns, and motivations of online consumer behaviors, but much more information is needed as the rapid expansion of this developing commerce takes place. Those who commit themselves to understanding the behaviors of online consumers now will no doubt be better suited to the future as an Internet consumerism fueled society.  References Brown, M Pope, N & Voges, K 2003, 'Buying or browsing? An exploration of shopping orientations and online purchase intention', European Journal of Marketing, vol. 37, no. 11/12, pp. 1666-1684 Demangeot, C & Broderick, A 2006, 'Exploring the experiential intensity of online shopping environments', Qualitative Market Research: An International Journal, vol. 9, no. 4, pp. 325-351 Dennis, C Harris, L & Sandhu, B 2002, 'From bricks to clciks: understanding the e-consumer', Qualitative Market Research: An International Journal, vol. 5, no. 4, pp. 281-290 Fiore, AM Lee, S & Kunz, G 2004, 'Individual differences, motivations, and willingness to use a mass customization option for fashion products', European Journal of Marketing, vol. 38, no. 7, pp. 835-849 Janda, S. (2008). Does Gender Moderate the Effects of Online Concerns on Purchase Likelihood? Journal of Internet Commerce, 7 (3), 339-358 Jeong, SW Fiore, AM Niehm, LS & O.Lorenz, FO 2009, 'The role of experiential value in online shopping', Internet Research, vol. 19, no. 1, pp. 105-124 Kau, AK Tang, YE & Ghose, S 2003, 'Typology of online shoppers', Journal of Consumer Marketing, vol. 20, no. 2, pp. 139-156 Stibel, J.M. (2005). Mental Models and online Consumer behavior: Behavior and Information Technology, 24 (2), 147-150 Read More