Online Shoppers: Consumer Analysis

Introduction

The invention of the internet has revolutionized retailing with a significant proportion of users turning to online channels to do shopping. Shopping on the internet allows users to browse and buy products and services in online stores. The internet has become a preferred medium of shopping for products and services. It is expected that by 2015, online retail sales will reach a whopping $778.6 billion globally with an annual growth rate of 22.2 percent (Keisidou, Sarigiannidis & Maditinos, 2011). Although initially there were concerns with privacy related to consumer’s personal information, sophisticated security tools have made it safe to do online shopping.

Online shopping varies between developed and developing economies. In the U.S., sales made by online retail stores rose by 18.1 percent between 2001 and 2010 while the EU experienced a 37 percent growth over the same period (Keisidou, Sarigiannidis & Maditinos, 2011). The online retail presents a unique opportunity for enterprises to grow and become competitive. Understanding the attitudes and characteristics of online shoppers is an essential first step that new entrants must do. Online purchase decisions also depend on the features of the products or services offered. In this paper, the writer conducts a consumer analysis of the online retail market, including the demographics, characteristics, and attitudes. It also examines product categories preferred by online shoppers.

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Characteristics of Online Shoppers

Online shoppers portray certain personality traits that shape their values and behavior. The shoppers are usually tech savvy and understand the online marketing environment. The online market provides a virtual environment that allows users to purchase products/services at any time and place. Well-designed websites allow users to search for products and thus, influence their purchase decisions. Web retailers design visually appealing sites to attract shoppers and influence their purchase intentions. Thus, internet knowledge is an important attribute of online shoppers.

Familiarity with online shopping is another attribute of online shoppers. Kim and Jihyun (2009) establish that experience in online buying correlates with the shopper’s confidence to buy from web-based retail stores. Product familiarity increases the shopper’s cognitive skills, which enhances the “ability to analyze, elaborate, and remember product information” (Kim & Jihyun, 2009, p. 131). Thus, shoppers unfamiliar with the online store or its products are unlikely to make a purchase without user reviews. Perceived values such as fear of unpleasant product or service quality can also hamper online shopping. Online shoppers believe that the product/service has qualities that would give them satisfaction. Additionally, they find the online shops convenient because of they are accessible 24 hours a day, which saves on time and transportation costs.

Online shoppers value ‘convenience’ more than experience when shopping. Because they lack time to visit physical stores, their purchase decisions are anchored on convenience rather prior experience with the product or service. As such, they can purchase a product without examining it first. Some customers shun online stores because of security concerns. Since online shoppers are knowledgeable and skilled web users, they do not perceive internet shopping as a risk. Unlike conventional buyers, they consider online stores secure in terms of privacy to personal data and safety of transactions. They rely on the internet to communicate, share news, and browse product catalogs in online stores. Thus, their use of online shopping is spontaneous. Unlike conventional shoppers, they do not mind sharing personal information with other users.

Factors Influencing Online Consumer Behavior

Various factors shape the behavior of online shoppers. The availability of a fast internet connection at residential places increases the likelihood that a consumer will shop online. A research by Keisidou, Sarigiannidis, and Maditinos (2011) established that 14 percent of customers cite the internet accessibility as one of the reasons they shop online. Additionally, they prefer online stores to conventional ones because they offer variety and convenience. Besides the internet, online shopping depends on the characteristics of the consumer. Online shoppers tend to be “innovative and spontaneous” in their actions compared to consumers who buy from brick-and-mortar stores (Keisidou, Sarigiannidis & Maditinos, 2011). They prefer to shop on the internet because it allows price comparison and quick access to information about an item.

Demographics also affect the attitudes of customers who shop online. According to Kim and Jihyun (2009), demographic variables such as “age, gender, level of education, and income” influence online shopping behavior (p. 132). In general, online shoppers are youthful and literate people and have high incomes; however, older and less educated individuals also shop online occasionally. It is evident that demographic variables influence people’s ability to access online stores, but not their shopping behavior. This implies that demographics have a big influence on internet usage, but not on purchase decisions. Nevertheless, gender influences the type of products purchased online with men and women buying different items (Kim & Jihyun, 2009). The age of online shoppers also influences the kind of online store they visit.

Product features also influence the attitudes of internet shoppers. Shoppers prefer online retailers with brick-and-mortar stores, as this portrays the product as reliable and authentic. Consumers also consider the size of the store and customer reviews/testimonials when making purchase decisions. Other product features that influence online customers include the item’s price, quality, reliability, brand name, and potential to customize it (Kim & Jihyun, 2009). With regard to online vendor services, consumer behavior depends on factors such as ease of contact, speed of delivery, the potential for a refund, and credibility and reputation of the provider. Thus, online consumer behavior depends on the security, value, and cost of the product or service.

Website design features also affect consumer purchase behavior. Websites with easy-to-use features influence consumer’s perception of the service or product offered (Mummalaneni, 2005). Some design features are visually appealing and contribute to consumer satisfaction with the website. Thus, website features are motivator factors in online shopping. They make the site functional and easy to use. They include privacy settings, navigation tools, and display/content features that provide “enjoyment, visual appeal, credibility, cognitive outcome, and user empowerment” (Mummalaneni, 2005, p. 531). The security features protect users from online transaction risks and provide privacy for personal information. High quality sites have easy-to-use transaction tools, provide sufficient information/content, and are safe to use.

Online Product Categories

Online shoppers can only purchase certain products offered by web-based retailers. The online market contains a variety of products and services categorized based on aspects such as “cost and frequency of purchasing, value proposition, and level of differentiation” (Mummalaneni, 2005, p. 528). Consumer products purchased online range from tangible goods like cars, smart phones, and PCs to intangible services. Shoppers also use the online channel to book places or events and seek information about organizations. Online retailers use technology to facilitate virtualization of goods so that shoppers can examine products via the internet. This technology also facilitates product differentiation, which gives customers a better shopping experience.

Product categorization influences the behavior of online shoppers. According to Korgaonkar, Silverblatt, and Girard (2006), online shopping behavior depend on whether a product is a search, credence, and experience item. Search products are goods with attributes that a shopper can know without first examining them while experience items need an inspection to assess their worth before buying them (Korgaonkar, Silverblatt & Girard, 2006). On the other hand, consumers cannot assess the quality of credence goods because they possess standard features.

Stores often contain sensory and non-sensory items. Sensory products have qualities that can be felt by the senses while non-sensory ones can be expressed adequately in text (Korgaonkar, Silverblatt & Girard, 2006). Online stores contain non-sensory goods, which shoppers do not need to examine before buying. Services such as electronic banking and online hotel booking can be done online without a prior visit to the store. Online retailers provide navigation and transaction tools that allow a customer to complete the purchase process without visiting the store. On the other hand, sensory goods such as cosmetics and electronics need prior knowledge or experience to be able to purchase them. In this regard, potential shoppers rely on customer reviews to make purchase decisions.

Conclusion

Online shopping has grown tremendously as more retailers increase their online presence. Shoppers prefer online stores to conventional ones because they offer convenient services for time-constrained customers. Online shoppers are often youthful, wealthy, and skilled internet users, which makes them less disposed to risk. They also have a deep understanding of the product or brand and service provider. Website design features, including navigation and security tools, influence online shopping behavior. Additionally, shoppers can only purchase certain product categories that do not need prior examination.

References

Keisidou, E., Sarigiannidis, L. & Maditinos, D. (2011). Consumer characteristics and their effect on accepting online shopping, in the context of different product types. International Journal of Business Science and Applied Management, 6(2), 31-43.

Kim, H. & Jihyun, K. (2009). The effect of offline brand trust and perceived internet confidence on online shopping intention in the integrated multi-channel context. International Journal of Retail and Distribution Management, 37(2), 126-141.

Korgaonkar, P., Silverblatt, R. & Girard, T. (2006). Online retailing, product classifications, and consumer preferences. Internet Research, 16(3), 267–288.

Mummalaneni, V. (2005). An empirical investigation of Web site characteristics, consumer emotional states and on-line shopping behaviors. Journal of Business Research, 58(4), 526 –532.

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