ONLINE CONSUMER BEHAVIOUR

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WHAT IS ONLINE CONSUMER BEHAVIOUR?

It is the study of individuals, groups or organisations and the processes they used to select, secure and dispose of product services or ideas while purchasing the goods and services through the medium of internet.

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FACTORS

Environmental

Product/service Consumer/ personal characteristics Risk propensity Convenience

Systems
Intermediary/ merchant

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ONLINE PURCHSE BEHAVIOUR

Problem recognition Information collecting Evaluation of alternatives attitude Demand of individual price quality web trust towards online shopping envt

Selection of alternative and purchase Post purchase evaluation

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Types of Online Shoppers

Time-starved consumers: Usually found in a house with two sources of income. They are willing to pay higher prices or costs more to save time shopping, no matter whether they like it or not on-line buying experience. Shopping avoiders :Do not like shopping and may use

the Internet just to avoid the crowd, queue or traffic congestion. New technologist:

Usually young people and comfortable with technology, online shopping because "it's cool".

Time-sensitive consumers:

materialist

atau

click-and-mortar

Only use the Internet to view the products they prefer to make purchases from traditional stores for taking security or other reasons.

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Traditionals : Just like a traditional store. Probably not going to do shopping online. Hunter-gatherers: 20 percent of the total number of on-line customers. Like to compare prices and find the best prices. Brand loyalists: Purchase online for a particular brand as it gets more benefits.

Single shoppers: 16 percent of the total number of online customers. Liked the Internet not only for shopping but also for banking, communication, playing games, news and other activities.

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Online Purchase Decision Aids

Shopping Portals:

comprehensive portals

linked to many different vendors comparison shopping sites there is a comparison tool

niche oriented

have specialized in a product(cattoys.com) there is a referral fee quotation there is a portal that has a formal relationship with partners

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Trust Verification Sites:

Works to assess and confirm whether a given e-tailer is reliable or not. For example, TRUSTe, BBBOnLine, Secure ASSURE and Ernst & Young. TRUSTe Stamp available on e-tailer Web site reflect the credit. E-tailer has to pay to TRUSTe to use such stamps. Other Shopping Tools:

Escrow services- 3rd party to assure quality Communities of consumers

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Learning about Consumer Behavior Online

A Model of Consumer Behavior Online

The purpose of a consumer behavior model is to help vendors understand how a consumer makes a purchasing decision

Independent (or uncontrollable) variables personal characteristics and environmental characteristics Intervening or moderating variables market stimuli and EC systems (vendor-controlled) Dependent variables buyers decisions

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 Personal Characteristics

Higher education and/or income levels are associated with more online shopping. More experience people have with Internet shopping, the more likely they are to spend more money online. Most-cited reasons people do not purchase:

Shipping charges (51%) Difficulty in judging the quality of product (44%) Cannot return items easily (32%) Credit card safety (24%)

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 Environmental Characteristics

Social people are influenced by family members, friends, coworkers, and trends. Of importance are Internet communities, discussion groups. Cultural/community where people live influence what they buy. Rural shoppers differ from urban shoppers, Europe shoppers differ from Asian shoppers.

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The Consumer Decision-Making Process

Roles people play in the decision-making process:

Initiator the person who suggests a product/service

Influencer a person whose advice influence purchasing decision Decider the person who makes the buying decision

Buyer the person who makes an actual purchase

User the person who consumes or uses a product/service

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Online Consumer decision making models:

Generic Purchasing-Decision Model

Consists of five phases:

Need identification consumer convinced the need of a product/service Information search on various alternatives to satisfy the need Evaluation of alternatives a set of criteria is developed to help evaluation and comparison Purchase and delivery payment, purchase warranties

After purchase evaluation customer service and evaluation of usefulness

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Web Purchasing Model

Each of the phases of the purchasing model can be supported by Consumer Decision Support System facilities and Internet and Web facilities.
CDSS facilities support the specific decisions in the process. EC technologies provide necessary mechanisms and enhance communication and collaboration.

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Online Buyer Decision Support Model

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Online versus traditional consumer

Technology adoption

Online consumer is best predicted by Internet selfefficacy, followed by perceived financial benefits.

Convenience and Decision Support

Online consumer timesaving.

only

desire

is

convenience

and

Depth and breadth of information available on the Internet meets the consumers need of information to make purchase decision.

Market dynamics

More alternatives can be considered online because of lower search costs and greater availability of information.
Online consumers becoming less price conscious over time.

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Loyalty and trust

The ability to customize products/services and transactional environment online is far beyond the capability of traditional store. Consumer loyalty to access competitors site is only a click away.

Trust for online consumer is an expectation based on past performance, a strategy to reduce uncertainty, a willingness to rely on an exchanging partner, and a perception of reliability.
Products are tangible and services are intangible in traditional commerce but both products and services are intangible online. Online shopping consumers concern about risk for products than services, more concern about perceived ease of use for services rather than products.

Products Vs services

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Loyalty and trust

The ability to customize products/services and transactional environment online is far beyond the capability of traditional store. Consumer loyalty to access competitors site is only a click away. Trust for online consumer is an expectation based on past performance, a strategy to reduce uncertainty, a willingness to rely on an exchanging partner, and a perception of reliability.

Products versus services

Products are tangible and services are intangible in traditional commerce but both products and services are intangible online. Online shopping consumers concern about risk for products than services, more concern about perceived ease of use for services rather than products.

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Site design
The impact of the shop window are correlated to the impact of a sites home page but the impact of store layout versus site layout has some differences. Thus, more study is needed to examine what design elements affect online consumer behavior.

Empowerment, persuasion and entertainment

The ability to shop worldwide at anytime from virtually any location with the availability of real-time product and competitor information increase consumers sense of freedom and power. Personalized welcome pages and tailored recommendations list provide customers with a powerful feeling of discovery. Online consumers can react to persuasive media more often than a human at selling. Online shopping is also a form of entertainment and/or social interaction.

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