Online Consumer Behaviors and Factors Shaping Consumerism - Research Paper Example

 Online Consumer Behaviors and Factors Shaping Consumerism Abstract Internet usage has significantly increased in the past few decades. With increasing popularity of the Internet, the contemporary society is also characterized with a large number of online shopping 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 on a daily basis. This paper addresses 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 specific factors and variables of online consumerism, new strategies can be formulated and consumers as well as suppliers will gain thorough knowledge and understanding of online shopping behaviors. The purposes of this research paper are to integrate the research findings and to draw coherent linkages to how consumer thoughts, attitudes, and motivational behavior affect online buying, thus building a broader framework of future analysis on this topic. Outline I. Introduction A. Is the Internet available and accessible to all? 1. Brief Introduction of the Internet 2. Mention of the availability of the internet B. What is the Research Purpose? 1. Brief synopsis of how individual behaviors affect consumerism 2. What is consumer behaviorism? 3. Comment on how online consumerism have affected human behavior both negatives 4. How business can identify the behaviors that support buying online and those that do not with the aim of increasing their profits and gain. II. Thesis A. What claim being advanced by this research. 1. The Internet does more good than bad to online businesses III. Literature Review A. Attitude towards Online Shopping Motivations, and Online Information Search B. Online Experience, Sexual Preferences, and the Primary Place C. Greater Access to Communication D. Concern & Apprehensions IV. Methodology A. Integrated several research methodologies 1. Survey carried over a population of 300 people in 49 states B. Research Tools 1. Was carried out using a 22-statement survey in which those interviewed disagree with this statement, “In comparison to retail stores, I shop on the Internet when buying clothing and accessories for myself because” 2. Cluster Analysis C. Weaknesses and Limitation V. Online Behavior Characteristics A. Gender B. Online Auctions C. Esthetic Factors VI. Conclusion A. Appreciates the Internet as far as its effects to businesses is concerned 2. The claim that, “The Internet does more good than bad to online businesses,” is supported by this research Positive and Negative Online Consumer Behaviors and Factors Shaping Consumerism Introduction The Internet has been available and accessible to the public for over twenty years. Since the introduction of the World Wide Web, the interest in the value of commerce and individuals has been continuously growing. Skeptical at first, online consumerism has steadily increased, creating both positive and negative behaviors. The purpose of this research is to explore how individual behaviors affect online consumerism. According to Perner (2008), 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 p.112. By identifying the behaviors that support buying online and those that do not, businesses can increase their profits and gain larger share of the market, as electronic trade may well out-step traditional buying in the not too distant future. Thesis The Internet does more good than bad to online businesses. While some people may be quick to point out that it affects old market trends and ways of doing business, the internet opens new markets for businesses that need to expand. Additionally, consumers are provided with an avenue to access products and services round the clock Literature Review Attitude towards Online Shopping Motivations, and Online Information Search There are many variables to consider when outlining behaviors of Internet consumerism. According to Vazquez and Xu (2009), online consumer behavior is affected by “attitudes towards online shopping, motivations, such as price, convenience and hedonic motivations, and online information search” (p.409). If a person is positive about the experience of online shopping, positive attitude will affect the outcome of purchasing on the Internet. Online consumers feel more in control of the process if they can search for the product they want with relative ease. For example, price comparison is in itself a great motivational tool. The fact that more information about products is available online also allows consumers to make more reasonable decision about shopping. Research reported by Vazquez and Xu (2009) was conducted through a self-given online questionnaire. Data included the scale items of attitude, motivations, and searches of information. The group consisted of students in three different age categories: 15-24, 25-34, and 35-44 years old. The group consisting of 35-44 years old members was rated as first in Internet buying in terms of the volume of products and services bought. The 25-30 year olds were next, followed by the youngest group. The data was also obtained through emails and administered questionnaires. A total of 200 students were surveyed in person and 300 students were asked to fill in an email survey. The majority of them, 406 students, responded and participated in the research. Data analysis was done in a quantitative approach. Reliability analysis was formulated and used to test the data. Canonical analysis was integrated to understand the data and build a framework about online consumer behavior. The analysis showed that 49.8% of surveyed students were female and 50% were male. The group under age 24 made up a little less than two thirds of the total. Respondents over 24 accounted for the rest. Respondents who had used the Internet for five years or more represented 79% of the sample. The results clearly showed that online shopping motivations, information searches, and attitude all had significant affects on online purchases. Online Experience, Sexual Preferences, and the Primary Place Other variables to consider in online consumer behavior are online experience, sexual preference, and the primary place of accessing the Internet. The study done by Koyuncu and Lien (2003) revealed that these variables had “large statistically significant effects on online shopping” (p.721). The study showed that consumers, who had more experience with the Internet, felt more comfortable navigating it and making online purchases. Consumers also felt safer in using the Internet at their homes or on the job rather than on community computers. Sexual preference, according to Koyuncu and Lien’s (2003) research, showed that bisexuals shopped online in greater numbers than heterosexuals. This difference in behavior may be based on current bias against bisexual members of society. Similar results were reported in the study done by the Georgia Institute of Technology. The study engaged over 10,000 participants. The total amount of samples used was 8717. Demographic; economics, sexual preferences, and primary places of online access were the primary factors of interest for this study. The findings showed that 7026 participants considered themselves online shoppers, while 1691 did not. The average educational level was “some college” for both groups. Online shoppers’ income was between $50 and $74K as compared to $30-$40K for the non-online shoppers. The average ages of both groups were between 36 and 40 years old. Almost 90% were white; 60% were male. About half of the online shoppers were married. Overall, the study clearly identified that both the primary place to access the Internet and sexual preferences had positive effects on online shopping behavior. Greater Access to Communication Unlike shopping in a store on-site, making purchases online is accompanied with many positive outcomes. As Ammeter and Kim (2008) stated, “one of the most important traits of online shopping is bidirectional communication capability” (p.9). Online shoppers have greater access to communication with sellers. This communication can take place through bulletin boards and e-mails. An opportunity to contact the sellers gives consumers a perception of personalized assistance. Shoppers frequently encounter the employees who are not interested in helping consumers with purchases by providing additional information. Concern & Apprehensions However, online consumerism has a number of drawbacks. Swinder (2008) outlined a number of concerns pertaining to online shopping, including “privacy, security, credibility, and virtual experience” (p. 339). Each of these factors is considered when people think of making online purchases. Privacy issues, security, credibility, and virtual experience have negative effects on consumer purchasing. It is relatively simple to gather information from consumers whenever they log in at the site and make a purchase. Personal information, such as name, address, phone number, and credit card number, is gathered through direct questioning or tracking software. This transference of information makes some consumers nervous about shopping online and they choose not to take the risk. Another point to consider is credibility of the online seller. Questions arise about trust, reliability of description of merchandise, warranties, shipment, returns, and follow-up correspondence. Another negative behavioral pattern is compulsive buying tendencies. The tendency to over buy can have detrimental effects on the consumer, notably affecting money feelings, and relationships. According to the study done by Kukar-Kinney, Ridgway, and Monroe (2009), somewhere between 5 and 9 percent of America’s population could be identified as people who have a propensity to make compulsive purchases. Motivators of this type of behavior include the very key ingredients of online shopping: items may be purchased at any time, shopping can be done frequently, a broader variety exists, and purchases are made privately. Methodology The research integrated several methodologies. The first method of research was a survey done on over 300 people in 42 states throughout the country. “The sample consisted of 98.5% women, 63% of the respondents were married, the average age was 53 years, and the average household income was $82,000” (Vasquez & Xingang, 2009, p. 300) The penchant to buy compulsively was measured using a buying scale of six focuses, including 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 Tools Research was conducted using a 22-statement survey, in which the surveyed individuals 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” (Kukar-Kiney, Ridgway, & Monroe, 2009, p. 307) The 22 statements included areas linked to “buying unobserved, product variety, social interaction, and immediate positive feelings.” Information was analyzed through a series of “linear regression analysis, with individual shopping and buying motivations in the role of the dependent variable, and compulsive buying index as an independent variable” (Stribel, 2005, p. 302) Cluster Analysis The final research was defined as cluster analysis. The factors included demographics, age, gender, income, education level, marital status, average income spent at retail and internet stores, frequency of purchase, and the number of credit cards used. The research data was well defined and explained. The findings obtained through each method were charted and explained in easy terminology. In keeping with the theme of the method section, the interpretations and conclusions were very detailed and based on evidence. The results showed that compulsive online consumer behavior was in part explained by motivations of the shopper. All motives set forth in this study exhibited the positive connection to the compulsive buying scale, except for the product variety motive. Overall, the findings revealed that compulsive buying strongly affected consumers’ decisions to make purchases using the Internet. Weaknesses & Limitation The main weakness was the sampling of consumers. Subjects were relatively wealthy women, who frequented shopped at expensive internet retailers. Thus, this assessment represents a bias in the general population. The research tracked the behavior of women only. Compulsive online consumer behaviors are not gender-specific and, therefore, this research is flawed and cannot be applied to general population. Another weakness noted in this study was the sample size (a little over 300 participants). I do however think that one of this study’s greatest strengths was the broad variety of conducted surveys and applied methodologies. Online Behavior Characteristics Gender There are gendered differences in online behaviors as identified in the research of Janda (2008). The main differences account for shopping behaviors, attitudes to technology, and processing of information. Women are more venerable to risks and perceive risks as higher compared to men. In addition, women tend to use the Internet less often and are less confident about their online shopping ability. However, women enjoy the experience of shopping more than men and lean more toward the sites that provide extensive information and education about offered items. The data for gender-focused research was gathered through surveys that were handed out to participants. The opinions were taken from a quota sampling of different age groups. A total of 404 responses were collected. The sample included 196 men and 208 women. The median age was 32.8 years old. All participants had a history of Internet usage for about five years. The research asserted that these differences must be addressed by online distributors to appeal to both sexes in a meaningful way. Online Auctions In research done by Crutsinger, Jeon, and Kim (2008), seven motivators for online auction participation were identified, including “search costs, product assortment and price, brand equity, transaction costs, customer orientation, perceived quality, and social interaction” (p.31). Auctions are innovative methods to buy and sell merchandise and services. More than 1,660 sites are available to cater to online consumers who are interested in auctions. The study on was done through a questionnaire based on 36 auction motivators, online behavior, and demographics of participants. The Likert scale was used to gather responses. The participants totaled 410 and were selected from a pool of college students. Data was retrieved from 341 respondents. There were 74.8% female respondents and 42.6% were labeled as white. The ages ranged from 18 to 40 years old. The collected data revealed 90.9% were regular users of the Internet. Only 20% of them had no online auction experience. The respondents experienced in using online auctions were identified as follows: 5.3% used the Internet daily, 15.2% weekly, 29.9% monthly, and 29.3% used the Internet one to two times a year. An interesting note to this research was that although most of the surveyed individuals had participated in online auctions, the majority of them (80.6%) noted they have never sold anything online. The study revealed that “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” (Crutsinger, Jeon, & Haejung, 2012) p. 36). There is no doubt that college students are the most active users of the Internet. Studies like this one show the need for businesses to realize the value of online auctions and use this innovative online tool to increase their customer base. This research, however, did not address the negative component of online auction consumer behavior, either impulsive or compulsive buying. Further research should be done to fully understand online consumer auction behavior. Esthetics Factor A major part of esthetics is arrangement of information on web page. Too much information can overwhelm a consumer, while too little data can decrease consumer confidence. Stibel (2005) conducted research on this issue. Tests uncovered that online information presentation is not effective in many ways. In particular, “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” (p. 149). 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. In addition, Stibel (2005) developed a mental model of consumers, according to which people want information presented in concise and understandable way. The ability of online businesses to achieve this goal is imperative because it leads to a “more intuitive and compelling online experience” (p.149). There is a sub-group of online consumers termed the “net-genres or net generation.” This group is comprised of “individuals born between 1977 and 1997 and is the first generation to grow up surrounded by digital media and the Internet” (Kim & Ammeter, 2008, p.7). Members of this group understand technology and are comfortable with the Internet-powered commerce. The net-genres are the first generation that will actually surpass the baby-boomers in population size. Thus, businesses are in need for transformation. As the elderly portion of our population die and new individuals are born, this new way of doing business will be the reality in the nearest future. Conclusion The internet is arguably the best invention from the 20th century. Today, almost all the services that businesses provide can be accessed over the internet. This step towards the shift to the internet has been as a result of the changing consumer trends that have pushed business to go the direction they are headed. Any business that wants to survive the internet age has to comply with the consumer behaviors even though it changes their models of doing business. References Crutsinger, C., Jeon, S., & Haejung, K. (2012). Exploring Online Auction Behaviors and Motivations. Journal of Family and Consumer Sciences , 31-40. Janda, S. (2008). Does Gender Moderate the Effect of Online Concerns on Purchase Likelihood? Jounal of Internet Commerce , 339-357. Koyuncu, C., & Lien, D. (2003). E-Commerce and Consumer's Purchasing Behavior. Applied Economics , 721-726. Kukar-Kiney, M., Ridgway, N., & Monroe, K. (2009). The Relationship Betweeen Consumer's Tendecies to Buy Compulsively and Their Motivations to Shop and Buy on the Internet. Journal of Retailing: Consumer Behavior and Retailing , 298-307. Stribel, J. M. (2005). Mental Models and Online Consumers Behavior. Behavior and Information , 147-150. Vasquez, D., & Xingang, X. (2009). Investigation Linkages Between Online Purchase Behavior Variables. International Journal of Retail and Distribution Management , 408-419. Read More