Christmas shopping for your boss can be a difficult situation.
by Milad salimi and mehrdad salehi Introduction
The term Internet, as a business tool for companies and individuals, is nowadays the most widely used Non-store formats. According to Magee (2003), the number of online shopper?s growth is larger, Compared to those who are just using internet, which means more users comprehend the convenience of online shopping. In addition, not only the number of users grows, but also the capacity of their purchases would be increased. (Monsuwe, et al, 2004. The two most frequently mentioned reason for online shopping are convenience and price (Chen and Zhang, 2003).
Increasing numbers of individuals are gravitating towards more intensive use of the Internet as the accessibility of technology, the availability of information, and the capability to interact through the Internet increase and evolve. Apparent capabilities of the Internet involve directions for gathering information, purchasing a product, or rendering a service.
These advances in Internet technology permit for the extension of shopping options beyond traditional methods that may be more time consuming. Matters with having to physically obtaining information with offline shopping methods are alleviated, and customers are better able to efficiently use their time. For example, except of having to physically visit various stores to compare prices or rely on circular pamphlets in newspapers, a consumer is able to search and retrieve required information through the Internet.?
The internet utilization has grown at the rate of 20 percent per year since 1998, according to the US Department of Commerce; in the 13 past months to September 2001, over 26 million more American got online (Iwaarden, Wiele, Ball & Millen, 2004, p. 947). The Internet explosion has opened a wide range of ways to a new electronic world. Consumers are now able to utilize the Internet for a variety of targets such as research, communication, online banking, and even shopping. With these advantages, the Internet is quickly becoming the main technique of communication and of running business conveniently. With a growing number of individuals turning towards the Internet and the world of e-commerce to shop, enterprise, make payments, and carry out online banking, new technological advancements will have to come about to make these transactions secure. However, not all consumers are participating in online transactions as a section of the Internet huge expansion. As more and more businesses continue to establish an online presence, they are finding that some consumers are still reluctant to switch in that same direction.
Background of study
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Ability to buy without leaving your place is one of the most enthusiastic of many consumers. In addition, the use of Internet tools to search and compare prices provides an additional advantage regarding to the final decision of the consumer, because they can buy their products in favorable lowest available price (Haubl and Trifts, 2000).
Silverman, S.N. Stem, D.E. (2000). Limited to identify the characteristics of those taking the possible influence on the acceptance of Internet shopping that The study has been assumed that people with the goal of Internet shopping than they used new version as individuals in all areas and new version in certain areas, more interest in using the Internet have to buy.?On the other hand the rate of innovation moderating relationship quality people uses the Internet and shopping online. It should be noted that in addition to feature a custom product aspects also be considered.?Based on the findings of Liang, T. P., & Huang, J. S. (1998). should be careful which products to offer in electronic markets are more suitable .?Because different types of products will influence acceptance of Internet shopping.
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To attract customers for the company?s who following e-commerce method for Internet activities should be profitable.?It must be also presented to the various services.?Services and facilities that cause the customer?s motivation to buy (in the present and future).Therefore, website content? services that are provided on the website should be the customer?s needs and interests intended to create facilities and even
private sectors to provide.?
According to Nielsen Global online survey ? Internet shopping Habits Globally? (2007), more than half of the internet users have made at least one purchase online. Among internet users, the highest percentage shopping online is found in South Korea, where 99 percent of those with internet access have used it to shop, followed by the UK ( 97%),? Germany (97%), Japan (97%) with the U.S. eight, at 94 percent. Online shopping behavior refers to the process of purchasing services or product through internet, this process encompasses five steps. In online shopping process, when consumer recognize their need for particular product or service they refer to internet and seek for need-related information. In addition,? purchasing product without leaving your place is one of the great interest to many consumers and another advantage of online shopping for buyers is they can use internet tools for searching the product or service price and then comparison with each other and finally they are enable to choose the lowest available price. Regarding to studies, online shopping has been emerged quite recently as an interface for transactions between consumers and firms.
Internet shopping is changing the way consumers buy goods and services, and quickly evolved into a global phenomenon. Many companies have begun to use the Internet to reduce marketing costs, and consequently reducing the prices of their products and services to maintain a competitive market in the future. Companies also are using the internet to convey and communicate well the information and actually to present their products as well as taking feedback of their performance and enhance their turnover and also customer`s satisfaction. Customers use the Internet not only to buy products online, but also to compare prices, products, aspects and service facilities; they will receive the products they buy, from a specific store.
. For various consumers there are still numerous concerns about security and transferring personal data through the Internet. There is a difference among the number of consumers who visit a website and the number of real purchases being made. Despite the large number of people who utilize the Internet everyday and observe various shopping sites, the number of consumers who do not quit their shopping carts but actually complete a purchase averages to only about three percent. This leaves a large segment of the Internet population as non-participants in online transactions compared to those who completely accomplish transactions online and make purchases. Instead, these non-participants could abandon the purchase completely or accomplish the transaction in an offline setting.
Problem Statement
In contrast, one of the great concerned is trust and security. For instance, recent statistics shown that in Malay people approximately is about 30% did not commit with the online shopping, while one of significant factors in electronic commerce is trust. In order to increase online shopping in Malaysia ?, understanding consumer online shopping behavior and factors influencing this behavior when shopping online should be given priority. Researches indicate that majority of Malaysian (76%) specially young people were using internet for non-shopping activities such as seeking for information , entertainment , playing games and communication with others.
There are some barriers which have contributed to the unwillingness of Malaysian people because they afraid that their personal information will be stolen by others. Despite the potential in Malaysian people, there is still lack of understanding towards online shopping in Malaysia.
Objective of study
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This research conducted to find factors influencing consumers towards online shopping. It seeks for understanding and examining whether or not factors such as website quality and internet advertising influence consumer choice of online buying. The study is also determine to examine the perceptions of adopters and also those who are reluctant of online shopping in respect of demographic profile, consumers? expectations of online stores, as well as, its particular advantages and problems. It is worth mentioning that adopters are Internet users who have purchased online, while it is more likely that a group of people have never purchased online.
The study is based on previous research carried out by Teo (2006). Besides, by understanding the reasons why consumers buying online or not, online stores would be able to compound appropriate marketing strategies, moderate consumers? concerns and convince even more people being moved from offline to online shopping (Teo, 2006). In the first portion, the literature review regarding consumers? online buying behavior and the elements that encouraging or discourage online shopping is presented.
Significance of the Study
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Attitude directly influence decision making and so the group with more positive attitude should be the target market. The significance of the study actually is about assessing and understanding factors and also different facets in which playing a fundamental role in online shopping and predominantly is vital in order to shop online. The number of individuals should be increased in terms of those who have intention to carry out online shopping because the expansion of internet is nowadays more observable in the people`s life. So the whole world is going to behave in this way to store their time and cost and enhance their technological status and used to purchase their requirement in online setting.
Literature Review
As Internet usage is increasing, so is online shopping especially in those countries whose marketing infrastructures are well developed. Consumers can shop at anytime and have access to products not available in their geographic region. Furthermore, they are now able to access the Internet, not only from their personal computers, but from advanced electronic devices such as Palm Pilots and mobile phones. Also, due to an increase in high-speed Internet access connections, lower connection costs, and increasing consumer competence, e-commerce activity will continue to grow as the availability and ease with which the Internet provides consumers the ability to handle needed tasks increasingly develops.? In conjunction with the increases in Internet? capabilities, it is estimated that about 53% of Internet? users in the United States have made an online? purchase . However, not all consumers are turning to the Internet for shopping. While the? number of Internet users who have made a purchase? at one time is more than half in the United States, this? does not explain the disparity between the number of? visits websites recorded and the number of actual? purchases made online.
One report shows that although a web site may receive millions of visitors, only about 3% of those visits result in a purchase online, and according to another study, about 65% of online shopping carts are abandoned before a purchase is completed. An explanation of these occurrences is that the majority of consumers are going online to window-shop with plans to make their purchases in a more traditional, offline setting.? There have been several reasons examined in prior studies as to why some consumers have a preference for more traditional, offline means of purchasing products and services. One study found that consumers did not complete online purchases due to the intangibility of the purchase. Some consumers have to satisfy certain sensory needs such as touch, taste, or smell, before making a purchase decision.
Also, for some consumers, although visual images? are provided with products or services, their sight needs may still not be satisfied. Another study found that as uncertainty in consumers about purchasing goods due to an inability to satisfy sensory needs increases, perceptions of risk with transactions increase. Even with precautionary research into a good or service and its vending company, every online transaction is perceived to have a basic level of risk by consumers due to issues of intangibility that cannot be avoided, such as hackers and whether the actual purchase choice is satisfactory based on information gleaned.
Consumers have a basic wonder about the security and accuracy of their? online transactions. Especially for goods or services that consumers perceive to involve higher commitments, such as motor vehicles or computer cleaning services provided online, the intangibility of goods for some consumers can have a significant impact on their online purchasing decisions.? It has been reported that consumers have a low perception and trust of online merchants, making them unwilling to make purchases online. The results? of a survey of 9700 online consumers showed that three out of five respondents did not trust web merchants. Several studies also reported that consumers are concerned with their online security and privacy as online transactions still possess risk of information theft and fraud. This may be attributed to the fact that approximately 59% of online companies report at least one security breach each year.
?In addition, it has been shown that approximately two-thirds of Americans are concerned with possible threats of Internet hackers and are not satisfied with current systems designed to protect them from such attacks. A study of risk perceptions also indicates that consumers are concerned with undesirable outcomes and uncertainty of their purchases after purchasing a product online. Consumers, therefore, are less likely to make purchases online if they perceive a higher risk.? Offline settings are not hindered by some of the online perceptions of risk.
Offline settings are better able to provide some of the immediate satisfactions and sensory perceptions necessary to various consumers? purchasing decisions that lower associated risk perceptions with transactions, such as personal shopping assistance by personnel and? immediate rights to a product or service. The availability of face-to-face interaction with business? personnel to address consumer concerns is less prevalent and immediate in the online environment.? Retailers are also finding that some consumers still prefer the offline ability to feel the immediate? benefits of products rather than having to worry about a product or service while they wait for? satisfaction via delivery by mail. This can increase the level of perceived risks with online transactions? and affect the consumer?s purchasing decision process . The perception of risk associated with a? company and their online presence can also be affected by previous encounters and also affect their? decisions to complete purchases without sensory perceptions available in traditional brick-and-mortar? stores. Consumers? previous experiences with online purchases, or lack thereof, can be a significant? influence of levels of risk perception by consumers and their purchasing decisions . Negative? experiences increase levels of risk perception with online purchasing and hamper not only a business?s? likelihood of retaining customers but can make it more difficult for other online businesses to gain? initial customers .
?In order to identify the differences between consumers who prefer online shopping and those who prefer offline shopping, this study examines how? consumers perceive online shopping and which factors are perceived differently between consumers who prefer online shopping and consumers who prefer offline (physical store) shopping. The findings from this study will allow online businesses to be better informed of what draws consumers or prohibits them from coming to their websites. The better an online business understands the perceptions of these shoppers, the higher the chance that they can attract and retain customers.
References
1. Alomaim, N., Tunca, M. Z., & Zairi, M. (2003).? Customer satisfaction @ virtual organizations. Management Decision, 41(7), 666-670,
2. Attran, M., & VanLaar, I. (1999). Privacy and security over the Internet: how to secure your
Personal information and company data. Information Management & Computer Security, 7(5), 241.
3. Belanger, F., Hiller, J.S., & Smith, W.J. (2002). Trustworthiness in Electronic Commerce: the
Role of privacy, security, and site attributes. Journal of Strategic Information Systems, 11, 245-270.
4. Betts, M. (2001). Turning browsers into buyers. MIT Sloan Management Review, 42(2), 8-9.
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PRIVACY AND SECURITY ISSUES IN ONLINE SHOPPING
Shopping online has never been so easy. With the flourishing numbers of online merchants, people nowadays have various choices to do their shopping. Big companies such as eBay and amazon.com have introduced many value added features to help the customers to decide what to shop for. With features such as price comparison, product photos and user reviews, consumers can shop easily and smartly without even going to the stores and having such a hard time looking for the products they want. All they have to do are just browse for the product they want in the website and within a few mouse clicks they are off. Such simplicity is what makes online shopping appealing for consumers. The question is why do many people still deny shopping online? Well, for most people, privacy and security issues are their concerns. Hence, here I will discuss customers? perception of privacy and security issues, the reality of such issues and ways to avoid those issues, all based on some trustworthy sources I have found.
To know customers? perception of customer and security issues, I reviewed a scholarly article entitled ?Consumer Perceptions of Privacy and Security Risks for Online Shop? produced in the?Journal of Consumer Affairs. In the United States, more than half of the adult population uses the Internet and from that number, approximately half have shopped online (Sefton, qtd. in Miyazaki and Fernandez 28). Previous studies had shown that Internet users as a whole agreed that privacy and security issues are vital for them to shop online (Rohm and Milne, qtd. in Miyazaki and Fernandez 29). Most of them regard their personal information as their main concern (U.S. FTC, qtd. in Miyazaki and Fernandez 29). In the research conducted by Miyazaki and Fernandez, who are the authors of the articles themselves, privacy and security issues accounted for more than 65 percent of consumers? main concern as oppose to the other 35 for shopping inconveniences and others (35). They also concluded that more experienced Internet users tend to have more concern regarding privacy issues but less concern on security issues (38). Nevertheless, consumers still consider both as their main concern for online shopping as suggested in the survey (35).
Now, after knowing that privacy and security issues are vital for consumers in online shopping, I would like to know the emphasis in the real world. From an article titled ?The Myth of Secure E-Shopping? published in?PC World, the reality of such issue is revealed. While most consumers trust big and well established online merchant such as CD Universe, Travelocity, Columbia House and Ikea, these big companies still receive frequent security threats (Kandra 29). Joseph McDonnell, a CEO of online security firm IShop Secure even confessed that all online firms must have received threats of some sorts (29). He added by saying that hackers could easily infiltrate and get customers personal information online as online shoppers are not anonymous. Experts also discover that security measures taken by online retailers are insufficient (29). For instance, data encryption only applies in actual transfer of customer data but not in the database which is ironically the most common targets for hackers. Some other sites however, do not even have privacy and security policy posted implying that they do not protect their customers (Hairell 30). This is what happened to Bibliofind when it was hacked hence compromising its customers? credit information (Kandra 32). Apart from the retailers themselves, credit card processing firms and third party sites also receive threats (Kandra 30). Creditcards.com once had disclosed that someone had infiltrated its site and posted more than 55000 credit card numbers on the Internet. So, from all these indications, I can see that online shopping is not totally safe.
However, customer rights and security aspects are not just the responsibility of online merchants. To uphold them, the consumers themselves need to act. According to ?Ten Things Your Mother Never Told You about Online Shopping? published in?Yahoo! Internet Life, to be an ace consumer, online shoppers needs to prepare themselves with some basics (Halpin 61). As the prominent method of payment is credit card, consumers should be more aware in handling it (62). They should never disclose their credit information via e-mail. Some of the credit card issuers also have some sorts of protection that consumers should apply for. Apart from that, consumers should limit themselves from releasing unnecessary personal information such as age and income to protect their privacy (Hood, qtd. in Halpin 62). Also, as Todd Richter who is the president of Girl shop (an e-commerce site) had said, consumers should always be aware of the security technology used by merchant sites (62). Technologies such as Secure Socket Layer (SSL) and VeriSign play vital part in distinguishing one site from another. Nonetheless, consumers should always be alert of the privacy and customer policy in each site they tend to buy from (Halpin 62). Lastly, if there are still dissatisfactions, consumers could always report them to consumer-related agencies such as Better Business Bureau or Federal Trade Commission (Halpin 63).
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Thus, after reviewing these three reliable sources related to the privacy and security issues of online shopping, I can see some interconnections between them. By common sense, anyone who tends to shop online will think twice before they buy anything as to consider the privacy and security issues related to it. This is proven in my first source (?Consumer Perceptions of Privacy and Security Risks for Online Shopping?) through the survey. People are always conscious about their privacy and security. However, this is not the case in the real world. As my second source (?The Myth of Secure E-Shopping?) has proposed, even though online merchants have tried their best to beef up the security, threats and attacks still prevail. For this reason, consumer should act fast to protect their privacy when shopping online. My third source (?10 Things Your Mother Never Told You about Online Shopping?) explains many ways that consumers could do to enhance the privacy and security aspect apart from what online merchants have done for the same reason. Taking all these contents as a whole, I would say that in any situation, people can still shop online safely provided they understand the reality and take some precautions above all.
There are many factors that market researchers have identified as determinants of a consumer?s buying decision (Goldsmith, Bridges, and Freidan, 2001; Jarvenpaa and Todd, 1996-97).??? Jarvenpaa and Todd categorized these factors into four constructs of consumer perception as:? product perception, shopping experience, perceived risk, and service quality.??? These constructs are surveyed below.
Product Perception
Product perception, sometimes called product understanding (Dillon and Reif, 2004) or product value (Crisp,? Jarvenpaa, and Todd, 1997), consists of price, product quality, and variety.??? These are the most salient product perceptions mentioned in the e-market literature.?? Price is the monetary payout of the customers and is the cost of purchasing; it is important since pricing strategy can be easily implemented over the internet.?? Quality is generally defined as overall excellence or superiority of the products, as stated by Parasuraman, Zeithaml and Berry (hereinafter referred to as PZB) (1985) from the consumer ?s viewpoint. Product quality, which also accommodates service quality? if the purchasing target is service instead of physical product, should be distinguished? from the (supporting) service quality which is another construct to be discussed below; product quality has long been discussed in the literature from? different points of? view (Garvin, 1984;? Harari, 1993).?? Product quality perception is a particular product?s ability to satisfy the consumers compared to alternative products (Monroe and Krishnan, 1985); it is also a consumer evaluation of a product?s outstanding value and performance (PZB, 1988).?? Thus, perceived product quality can be defined as the customer?s perception or the judgment about the overall excellence or superiority of the products or service with respect to its intended purpose relative to alternatives (Aaker, 1991; PZB, 1988). Since the perceived product quality is a pivotal reason to buy (Aaker, 1991), price is the cost paid by the customers, and variety gives the customers more alternatives to choose the products and hence motivate the customers to visit the website; these three factors were empirically justified as important factors for internet shopping (Jarvenpaa and Todd, 1996-97; Dillon and Reif, 2004). Hence, we have the following hypothesis: Hypothesis 1: Product perception affects purchase intention.
Shopping Experience
In this study, we quote the definition of shopping experience proposed by Arnold, Reynolds, Ponder, and Lueg? (2005).??? They deemed shopping experience could be classified into two categories. The first one is the experience from? the? salesperson?s encounter, and? such interpersonal factors include? salesperson?s efforts, interpersonal? engagement,? problem resolution, interpersonal distance, and sale personnel?s time commitment; the other is non-interpersonal factors? which include unanticipated acquisition and value or vice versa.? In addition, Kerin, Jain, and Howard (1992) considered shopping experience as the store atmosphere, customer-related services and a set of policies. Since the two? definitions of shopping experience are quite similar and complementary to each other, by combining the two definitions, shopping experience will be defined as ?the? set of? all? services and policies related to the? store-atmosphere and? customers, including interpersonal interaction, sales staff?s efforts and commitment and? relevant policies provided to? please or attract customers.?The shopping experience in the cyber world is quite different from conventional stores.?? Effort, life style compatibility, playfulness have been mentioned (Baty and Lee, 1995;? Goldsmith, 2000; Hoffman and? Novak, 1997); social interaction was added by Jarvenpaa and Todd (1996-97). Effort is the amount of time and energy spent in locating merchandise and making purchase decisions. Life style compatibility considers the consumers? life style and shopping habits.?? Playfulness refers to feelings of fun in website navigation when purchasing.? Social interaction means the interaction with people when shopping on the web, such as joining discussion groups, soliciting user experiences etc. However, convenience (in? inquiring, in ordering), consistency (between expected and actual? product/service), and playfulness were identified as the most salient factors in Taiwan?s online shopping (Cheng, 2000);? in this study, we adopt? Cheng?s? operational definition of shopping experience for accommodating Taiwan?s internet? environment. Since consumers with happy shopping experience are obviously more satisfactory and since it has been shown to? influence consumers? value perception (Kerin, Jain, and Howard, 1992) and repurchase intention (Jarvenpaa and Todd,? 1997; Arnold, Reynolds, Ponder, and Lueg, 2005), thus hypothesis 2 is proposed as: Hypothesis 2: The shopping experience affects purchase intention.
Service Quality
We may call service in question as ?supporting service? which accompanies the main product/service and facilitates the purchasing process.?? The concept of service quality whether the quality meets or exceeds the consumer?s expectation; therefore, the consumer?s perception of service quality is the perceived gap after comparing the consumer?s? expectations of service and the actual feeling of the service (PZB 1985).? While the consumer?s expectation of service? quality is often? affected by? the influence of four sources:? past experience, word-of-mouth communication, personal? needs and external communication, service quality is a subjective attitudinal response showing the consumer?s overall? superiority assessment of the service itself. PZB considered service quality as a long-term overall judgment on service and can be evaluated from the attitudinal viewpoint. Service quality results from comparing the consumer?s expectations of service and the actually perceived service performance. In 1998 they further stated that the service quality is the excellence level generated from the interaction between the service provider and the customer in the service delivery process; they also emphasized service quality should be defined from the customer side, rather than from the vendor side.? A conceptual model was proposed on service quality (PZB 1985) and 10 determinants of service quality were put? forward; they were reliability, responsiveness, competence, access, courtesy, communication, credibility, security,? understanding/knowing and tangibles and? a? measuring scale? containing 5 constructs? (SERVQUAL)? was developed (PZB 1988) and later corrected (PZB 1994). A direct measurement of consumers? service quality called SERVPERF was proposed by Cronin and Taylor (1992) and was shown to have better predictive ability, convergent validity, and discriminant validity than SERVQUAL. For online shopping, e-service quality was measured by different researchers.? Parvenpaa and Todd? (1996-97)? proposed? responsiveness, reliability, tangibility, empathy, and assurance as the factors that affect consumers? attitude.?? Parasuraman, Zeithaml, and Malhotra (2005) suggested efficiency, system availability, fulfillment, and privacy as the major factors to be considered.?? Collier and Penstock (2006) recommend a scale containing the formative indicators instead of the reflexive indicators.? In this study, we followed Cheng?s (2000) scale which is essentially Parvenpaa and
Todd?s scheme (see Table 1 below)? except for? some adjustment on the indicators to reflect online bookstores? characteristics.??? Service quality has long been recognized as an important factor in forming consumers? attitudes, intentions, and actions as poor service quality discourages any decision to buy (PZB 1985; Zeithaml, 1988; Zeithaml, ET.? Al, 1996).??? Thus, the following hypothesis is suggested: Hypothesis 3: Service quality affects purchase intention.
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Perceived Risk
Perceived risk was developed from psychology by Bauer (1967) and since then has been widely discussed in consumer behavior literature and regarded as one of the basic concepts.? Bauer pointed out that consumer behavior can be regarded as a kind of ?risk-taking?, because the consumer cannot ensure the results from using the products at the purchasing moment, thus in fact, the consumer bears a certain risk.?? Differing views were put forward by researchers as follows:Cox (1967) considered that perceived risks lies in the notion that consumer behavior is a goal-oriented activity,? and purchase of the product is associated with this goal; its acceptable expectation level is measured by the degree of? achievement to this goal.?? However, the consumers may not be aware of any risk component so that their behavior may be affected sub-consciously and this may influence some direct actions.? Therefore, to identify the existence and the extent of the perceived risk, it is often required to infer from the behavior procedure.? Every time the consumers buy, there is associated a set of purchase goals; when the expectation level of purchase cannot be attained, the unexpected negative results from the perceived risk. The consumers themselves may not be aware of the purchase goals and the perceived risk, but their behavior is deeply affected by the perceived risk. Roselius (1971) believed the consumer?s most effective risk reduction strategies were ?brand loyalty? and ?major? brand image?, and ?purchasing expensive products? was the least helpful.? In the meantime, he proposed four methods to solve it when the consumers were aware of the existence of risks, based on their preferences of the methods to reduce? risk: (1) reducing the possibility of failure, or to moderate the seriousness of the consequences; (2) converting a possible? loss into another more bearable loss; (3) deferring purchase, and (4) adopting purchasing and absorb the risk. For internet shopping, the risk types and/or contents are quite different from conventional ones due to dissimilar business models and transaction processes that induce more uncertainty for online shopping.?? After analyzing the questionnaires, Jarvenpaa and Todd (1996-97) classified the risk types as follows.
Economic or financial risk: This is the monetary losses due to poor purchase choice, inability to return goods, etc. In this study, economic risk refers to credit card embezzlement. Social risk: This originally refers to the fact that shopping on the web will be considered as imprudent or socially unacceptable, but as online activity becomes popular, we refer it as the embarrassment of confronting people in purchasing private-oriented books.
Performance risk: This refers to situation where product/service fails to meet one?s expectation in online book shopping, in this study since the book quality is rather fixed, thus we refer to safety of payment methods. Personal risk: This refers to the harmful personal consequences to the consumer resulting from online shopping.? However, any losses can be attributed to this type according to the definition; thus, we regard this type of risk as transaction data leakage.
Privacy risk:? This refers to the personal private information leakage when offered to the online vendors. The aforementioned risks certainly cause negative utility for the customers since ?uncertainty?, ?discomfort? and/or ?anxiety? arises from the above-mentioned risks when making an online purchase decision (Dowling and Staelin, 1994; Jarvenpaa and Todd, 1996-97; Bhatnagar, Misra, and Rao, 2000) and steps are taken to avoid such risks.? Hence, the following hypothesis is proposed: Hypothesis 4: The perceived risks affect purchase intention.
Advantage of online shopping:
24 hour accessibility
Comparison among the different product
Cheaper price
Disadvantage of online shopping:
Time to delivery
Unreliability
Difficult to Returns and exchanges
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Research Methodology
Study design:
This study is based on hypothesis testing regarding the fact that data were collected only once to answer to research questions through questionnaire, concerning the fact of customer perceptions toward online shopping.
Main objectives:
To understand correlation between website quality and online shopping behavior.
To understand correlation between advertising and online shopping behavior.
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Sources and Data Collection Method:
A structured questionnaire was used to collect the primary data to answer the research questions and objectives regarding to effectiveness of well designed and high quality website and Advertising for such a website on online shopping for Malaysian customer. Therefore the survey questions consist two specific sections in addition to demographic part and each of them contains questions to reflect different parts of the study. The Budget constraints in terms of time and cost and difficulty to access to the potential respondents in Malaysia lead us to use the convenience sampling method.
Therefore, some specific places inside the were chosen for distributing the questionnaires. For instance some places like SURIA KLCC, CAPSQUERE, and PAVILLION were chosen for separating questionnaire. The survey was conducted generally via face-to-face interview and also hands over the questionnaire.
Before we chosen face to face interview we sent the questionnaire through email to more than 75 people but unfortunately only 15 people replied in one week. Then we switch our data collecting method and we refer to personal interview.
Therefore, the survey responses provided us with the valuable inputs to this study for better understanding the online shopping practices in Malaysia
Total 75 questionnaires were distributed; while each of responses received was screened properly for error, incomplete and/or missing responses. . However, those responses that had more than 10% of the questions in the survey questionnaire that had been left unanswered or incorrectly answered were deducted from data analysis. Having done the appropriate screening process, returned questionnaires were considered as unusable and the rest 60 responses were used which were considered as complete and valid for final analysis and hypothesis testing.
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Measures
We used questionnaire as an instrument to obtain required data for analysis of the hypothesis we developed.
In this study we used 1- LIKERT scale and
In Likert scale anchored from ?strongly disagree? (1) to ?strongly agree? (5) to measure relation between website quality and online shopping behavior and also correlation between advertising and online purchasing.
Hypothesis development
From the discussion of the theoretical framework, two hypotheses were formulated to test the relationship between each of the two independent variables and dependent variable. The two hypotheses which this study has been conducted on it are:
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H1: High quality website positively associated with the online shopping
H2: Advertisement positively associated with the intention to online shopping.
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Questionnaire
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Please circle the numbers responding the most appropriate responses for you in respect of the following items:
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1-????? Gender :??????????????????????????????????? Male??????????????????????????????????????????? ?????????Female
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2-????? Age:???????????????????????? 15-20?????????????????????????? 20-25??????????????????????????? 25-30??????????????????????????????? 0ver 30
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3-????? Marital status:??????????????????????? single???????????????????????? married???????????? ?????????widowed???????????????????????? other
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4-????? Monthly income:??????????? no income??????????????????????? 1000-3500RM??????????????????????? Above 6000RM????????????????????????????? 3500-6000 RM
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5-????? Occupation :????????????????? student???????????? ?????????????????????business field
?????????????????????????????????????????????????????? Housewife????????????????????????????? other
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6-????? Educational background:??????????????? vocational??????????????????????? high school degree
????????????????????? ??
???????????????????????????????????????????????????????????? College degree????????????????? professional degree
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7-????? How long have you been using internet services?
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More than 10 years??????????????????????????????????????? 5-10 years
1-5years?????? ??????????????????????????????????????????????????????less than 1 year
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8-????? How many hours a week do you devote to online visiting website?
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Less than 5 hr??????????????????????????????????????????????????????????????? 1-5 hrs
10-16 hr???????????????????? ??????????????????????????????????????????????????????more than 16 hr
Website quality
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Strongly? Agree
Agree
Neutral
Disagree
Strongly Disagree
10-Web site appearance is one of the important factor for attracting internet users
(Appearance)
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11-The site should load quickly ? even for dialup users
(Quick Loading)
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12- The website must be including Privacy Policy up (especially if you collect data, email, names, and web analytics tracking cookies)
(Security)
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13-Site Map must be available
(Sitemap)
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14-All links (internal and external) must valid and active.
(Validity)
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?
?
?
?
Advertising
?
?
Strongly Agree
?
Agree
Neutral
Disagree
Strongly Disagree
15-Special offer is important factor for attracting me to online purchasing via internet
(Promotion)
?
?
?
?
?
?
16-When you see an ad ( banner or pop-up), you are likely to click on it to get more information about the product/ service
(Attractiveness)
?
?
?
?
?
?
17-The claims made in the ads were believable
(Believability)
?
?
?
?
?
?
18-The ads should be original
(Originality)
?
?
?
?
?
?
?
19- On which of these media do you consider the advertisement is effective way for attracting people for online shopping?
???????????? Internet?????????????????????????????? Billboard?????????????????????????? TV????? ???????????????????????magazine???????????????????????
?
Analyzing results and discussion
?
Below are analyses of demographic data: 1- gender, 2- age, 3- marital status, 4- monthly income, 5- occupation, 6- educational background, 7- internet using duration, 8- online visiting website.
?
?
As it obvious in this pie 46.67% of respondent were female and 53.33% were male
????
?????????????????????????????????????
This pie chart shows that 35% of respondents were aged between 15-20years old, 30% were between 20-25, 18.33% were over 30 and 16.67% were age between 25-30 years.
?
?
?
?
?
?
?
?
?
?
?
?
Majority of respondents approximately is about 40% was single and 30% were married.
?
???????????????????????????????????????
?
41.67% of respondent had monthly income between 1000-3500RM, 31.67% hadn?t income or maybe they had monthly income below 1000RM and 5% had over 6000RM monthly income.
???
????????????????????????????????????????? ????
?
?
Majority of respondent 46.67% were student and minority of them mention other without specifying their job.
?
?????????????????????????????????????????
?
As it display in this pie 38.33% of respondent had high school degree, 36.67% had answered vocational and just 6.67% had professional degree and 18.33% had college degree.
?
?????????? ?????????????????????????????????
??????????????????????????????????
?
?
?????????????????????????????????????
?
?
?
????????????????????????????????????????
?
?
?
RESULTS AND DISCUSSION
?
Factor Analysis:
?
The following table at the beginning provides some descriptive analysis regarding to demographic information
?
Table 1 :Statistics
?
Gender
Age
Marital_
Status
Monthly_
Income
Occupation
Educational_
Background
Internet using_
duration
Online_Visiting_website
N
Valid
60
60
60
60
60
60
60
60
Missing
1
1
1
1
1
1
1
1
Std. Deviation
.503
1.112
.983
.864
.841
.910
1.066
1.112
Variance
.253
1.237
.966
.746
.707
.828
1.135
1.236
?
Following the conducting the factor analysis on all the items that measures ordinal variable, 9 variables extracted, each one representing a unique concept or in other word a specific perception of the respondents. Following table illustrate the mean for each item and corresponding standard of deviation. The first 5 items measure quality effectiveness of websites and the last 4 items measures advertising effectiveness toward using online shopping.
Table 2: Descriptive Statistics
?
N
Minimum
Maximum
Mean
Std. Deviation
Appearance
60
1.00
5.00
3.1333
1.08091
Quick Loading
60
1.00
5.00
3.2667
1.00620
Security
60
1.00
5.00
3.0167
1.08130
Sitemap
60
1.00
5.00
3.2833
1.13633
Validity
60
1.00
5.00
3.2000
1.05445
Promotion
60
1.00
5.00
3.0667
1.11791
Attractiveness
60
1.00
5.00
3.2000
1.20451
Believability
60
1.00
5.00
3.0167
1.12734
Originality
60
1.00
5.00
3.3000
1.07829
Valid N (listwise)
60
?
?
?
?
?
But because our scale for our main question is base of the likert scale we have to use the factor analysis. In this project factor analysis was employed to explore the underlying factors associated with 9 items by using Principal Component Analysis (PCA). Generally, KMO is used to assess which variables need to drop from the model due to multi Collinearity. The value of KMO varies from 0 to 1, and KMO overall should be .60 or higher to perform factor analysis. If not then it is necessary to drop the variables with lowest anti image value until KMO overall rise above .60. Result for the Bartlett?s Test of Sphericity and the KMO reveal that both were highly significant and concluded that this variable was suitable for the factor analysis (Table 3).
?
Table 3 : KMO and Bartlett?s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
.716
Bartlett?s Test of Sphericity
Approx. Chi-Square
539.013
Df
36
Sig.
.000
?
It can be seen the KMO is more than 0.6 is acceptable and it?s in mediocre range, it means no need for drop any variables, besides P-value is less than 0.001, means we can proceed with factor analysis.
?
?
Table 4: Correlation Matrix
?
Appearance
Quick Loading
Security
Sitemap
Validity
Promotion
Attractiveness
Believability
Originality
Correlation
Appearance
1.000
.512
.491
.548
.407
.413
.461
.888
.445
Quick Loading
.512
1.000
.635
.630
.891
.511
.571
.474
.878
Security
.491
.635
1.000
.589
.666
.826
.635
.473
.577
Sitemap
.548
.630
.589
1.000
.560
.479
.887
.433
.483
Validity
.407
.891
.666
.560
1.000
.578
.475
.368
.781
Promotion
.413
.511
.826
.479
.578
1.000
.481
.456
.503
Attractiveness
.461
.571
.635
.887
.475
.481
1.000
.409
.371
Believability
.888
.474
.473
.433
.368
.456
.409
1.000
.456
Originality
.445
.878
.577
.483
.781
.503
.371
.456
1.000
?
Besides, the correlation of the items are between 0.3 to 0.9 which means all the items correlation is acceptable, in this case there is no duplication, and all have a association.
?
Correlation Matrix
?
Website Quality
Advertising
Intention to online shopping
Correlation
Website Quality
1.000
.728
.413
Advertising
.728
1.000
.133
Intention to online shopping
.413
.133
1.000
?
?
Moreover, we grouped the questions regarding to every hypothesis and again make a correlation between them and dependent factor, it can be seen although there is a good correlation between website quality and advertising and website quality and intention to online shopping, but poor correlation between advertising and? dependent factor is transparent.
?
Factor analysis was carried out on the effective factor on online shipping to group together the variables that are highly correlated.
The process of factor analysis involves two stages:
?
?
1-????? Factor extraction to make an initial decision on the number of factors underlying asset of measured variables of interest
2-????? Factor rotation for easy interpretability of factor extraction result and for making final decision about the underlying factors. The underlying structure of 9 items was analyzed using principal component analysis followed by varimax rotation because we have an independent variable. The factor analyses revealed two dimensions underlying effective factor on online shopping for Malaysian customers.
They are: (F1), High Quality websites (F2), Advertising. The total variance explained by factors is indicated in Table 5, which suggests that the two factors account for 74% of the total variance. Factor 1, which accounted for about 61% of total variance.
?
?
?
Table 5 : Total Variance Explained
Component
Initial Eigenvalues
Extraction Sums of Squared Loadings
Total
% of Variance
Cumulative %
Total
% of Variance
Cumulative %
?
1
5.524
61.376
61.376
5.524
61.376
61.376
2
1.153
12.810
74.185
1.153
12.810
74.185
3
.958
10.644
84.829
?
?
?
4
.754
8.376
93.205
?
?
?
5
.203
2.259
95.464
?
?
?
6
.167
1.852
97.316
?
?
?
7
.131
1.453
98.769
?
?
?
8
.072
.797
99.566
?
?
?
9
.039
.434
100.000
?
?
?
Extraction Method: Principal Component Analysis.
?
In fact, each of above component represents a factor that explains the total variances in all the 8 original items as listed above. As shown in the Table.2, the Eigen values for just the two components are above the value 1, thus they are to be considered significant. It can be seen in the Table 2, each of these components explains 61.376 %, 12.810%, of the total variance respectively, among the all 9 items.
?
?
It has been illustrated in Figure 1, There is a dramatic steep slope from component 1 to component 2, hence most of the variance is explained by factor 1 alone and small portion by component 2 and then again there is a steep slope to component 3, Whereas, the slop of the diagram change gently from component 4 to component 9 which again indicate that most of variance is explained by the first 2 components and subsequent factor do not contribute much in explained variance.
Figure 1
?
?
Now we founded that we have a two factor, so the question now is each item is regarding to which factor, for this we look at the component matrix table.
?
?
?
?
Factor Loading
?Rotated Component Matrixa
?
?
Component
Cronbach?s
alpha
1
2
Appearance
.704
?
?
Quick Loading
.653
?
?
Security
.829
?
0.801
Sitemap
.596
?
?
Validity
.828
?
?
Promotion
?
.774
?
Attractiveness
?
.514
?
Believability
?
.798
0.721
Originality
?
.750
?
Extraction Method: Principal Component Analysis.
?Rotation Method: Varimax with Kaiser Normalization.
?
a. Rotation converged in 3 iterations.
?
?
All the Cronbach?s alpha value for components is well above value of 0.721 which indicate to good level of internal consistency.
Seemingly, component 1 represents five first variances in the five first items in the questionnaire and it is designated as Security effectiveness. Moreover, the other components are designated as Believability effectiveness.
Hypothesis testing
Due to measuring the concept based on a five points Likert Scale which gives ordinal data, this study has been manipulated the Factor Scores to analyze hypotheses.?
?
?
?
H1: High quality (Secure) website positively associated with the online shopping
?
?
?
Correlations
?
Intention to online _shopping
Security
Intention to online _shopping
Pearson Correlation
1
.418
Sig. (2-tailed)
?
.002
N
60
60
Security
Pearson Correlation
.418
1
Sig. (2-tailed)
.002
?
N
60
60
?
Base of the Pearson correlation test, the r value between Security (high quality) and intention to buy is 0.418, which is more than 0.3, so there is a significant association between high quality (Secure) website and intention for online shopping. And p-value is less than 0.05, therefore the H1 is accepted.
H2: Advertisement (believability of ads) positively associated with the intention to online shopping.
The Pearson Correlation test applied to test the significance and direction of relationship. Results are illustrated in following table.
?
Correlations
?
Believability
Intention to online _shopping
Believability
Pearson Correlation
1
.073
Sig. (2-tailed)
?
.579
N
60
60
Intention to online _shopping
Pearson Correlation
.073
1
Sig. (2-tailed)
.579
?
N
60
60
?
?
?
Having considered above table, The Pearson Correlation Coefficient value equals to 0.73 which is lower than 0.3 indicating there is any neither positive nor negative association between Advertisement (believability of ads) and intention to online shopping. Thus, the hypothesis H2 is rejected.
ANOVA Test: (Optional)
All we are looking for through conducting this test is whether selected factors can be a good predictor for modeling an online shopping behavior or not, so we apply the ANOVA test. Usually it should be done at the beginning of projects.
?
Anova
Model
Sum of Squares
Df
Mean Square
F
Sig.
1
Regression
7.815
9
.868
.604
.000a
Residual
71.835
50
1.437
?
?
Total
79.650
59
?
?
?
a. Predictors: (Constant), Originality, Attractiveness, Believability, Promotion, Validity, Security, Appearance, Sitemap, Quick Loading
b. Dependent Variable: Online shopping behavior
?
The P-value from the ANOVA table is less than 0.001, which means that at least one of the variables can be used to model the online shopping behavior.
?
Model Summary
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
Change Statistics
Durbin-Watson
R Square Change
F Change
df1
df2
Sig. F Change
?
1
.313a
. 781
-.064
1.199
.781
?
.604
9
50
.787
1.549
a. Predictors: (Constant), Originality, Attractiveness, Believability, Promotion, Validity, Security, Appearance, Sitemap, Quick Loading
b. Dependent Variable: Dependent Variable: Online shopping behavior
? ? ? ? ? ? ? ? ? ? ? ?
?
The R-Square value is 0.781, which means 78.1% of the variation can be explained by these factors, the Durbin-Watson statistic of 1.549 is not far from 2 and it?s correct.
?
Appendix: (Descriptive analysis)
These tables are some details regarding to demographic questions
?
Gender
?
Frequency
Percent
Valid Percent
Cumulative Percent
Valid
Male
32
52.5
53.3
53.3
Female
28
45.9
46.7
100.0
Total
60
98.4
100.0
?
Missing
System
1
1.6
?
?
Total
61
100.0
?
?
?
Age
?
Frequency
Percent
Valid Percent
Cumulative Percent
Valid
15-20
21
34.4
35.0
35.0
20-25
18
29.5
30.0
65.0
25-30
10
16.4
16.7
81.7
Over 30
11
18.0
18.3
100.0
Total
60
98.4
100.0
?
Missing
System
1
1.6
?
?
Total
61
100.0
?
?
?
Marital_Status
?
Frequency
Percent
Valid Percent
Cumulative Percent
Valid
Single
24
39.3
40.0
40.0
Married
18
29.5
30.0
70.0
widowed
13
21.3
21.7
91.7
Other
5
8.2
8.3
100.0
Total
60
98.4
100.0
?
Missing
System
1
1.6
?
?
Total
61
100.0
?
?
?
?
?
?
?
Monthly_Income
?
Frequency
Percent
Valid Percent
Cumulative Percent
Valid
No income
19
31.1
31.7
31.7
1000-3500RM
25
41.0
41.7
73.3
3500-6000RM
13
21.3
21.7
95.0
Above 6000RM
3
4.9
5.0
100.0
Total
60
98.4
100.0
?
Missing
System
1
1.6
?
?
Total
61
100.0
?
?
?
Occupation
?
Frequency
Percent
Valid Percent
Cumulative Percent
Valid
Student
28
45.9
46.7
46.7
Business Filed
23
37.7
38.3
85.0
Housewife
6
9.8
10.0
95.0
Other
3
4.9
5.0
100.0
Total
60
98.4
100.0
?
Missing
System
1
1.6
?
?
Total
61
100.0
?
?
?
Educational_Bachground
?
Frequency
Percent
Valid Percent
Cumulative Percent
Valid
Vocational
22
36.1
36.7
36.7
Highschool degree
23
37.7
38.3
75.0
College degree
11
18.0
18.3
93.3
Professional degree
4
6.6
6.7
100.0
Total
60
98.4
100.0
?
Missing
System
1
1.6
?
?
Total
61
100.0
?
?
?
?
?
?
?
?
Internet_using_duration
?
Frequency
Percent
Valid Percent
Cumulative Percent
Valid
More than 10 years
11
18.0
18.3
18.3
5-10 years
13
21.3
21.7
40.0
1-5years
20
32.8
33.3
73.3
less than 1 year
16
26.2
26.7
100.0
Total
60
98.4
100.0
?
Missing
System
1
1.6
?
?
Total
61
100.0
?
?
?
Online_Visiting_website
?
Frequency
Percent
Valid Perce
Ems_salehi64@yahoo.commehrdad.salehi64@gmail.com
Article SourceThe first area of concern when Christmas shopping for your boss is setting a budget.
Source: http://www.ebooks-mall.org/main/2011/08/25/factors-influencing-consumers-towards-online-shopping/
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