Online shopping or electronic commerce is use of computer technology to carry out business transaction automatically, allowing for sales of products and services 24/7 (Yang and Lester, 2005).
Internet shopping main feature is the ability to shop from the comfort of your home. Other varieties of home shopping have been available before, for example, paper catalogue shopping has been around for more the 100 years (Goldsmith and Flynn, 2004). Other ways of in-home shopping include things like videotext and shopping television channels/programs or door to door salespeople. Nevertheless, according to Goldsmith and Flynn (2004) none had the impact of still developing and growing online shopping.
Another worth of the Internet to the consumer is the enabling of the information search and the ease of comparison of different products and prices. Shopping online is more attractive due to these features as they can find more information about the products, different pricings and availability of it (Brown et al., 2003). Researchers found that shoppers firstly will find information then make a purchase (Yang and Lester, 2005). But the question is: Would they make purchase online?
Online Shopping: Positive Aspects
Research showed that several positive aspects perceived by consumers in online shopping can be subdivided into time related, information related, convenience, price and sales people sections below.
With the invention of the Internet it became possible to communicate, search information, work, and shop 24 hours 7 days a week. And increasing time shortage pushes people to leave the conventional shopping and directs their attention to Internet shopping (Yang and Wu, 2007). It allows doing all types of shopping at any time and from any place which has computer and internet connection. It saves time as not only you can do shopping when you have time and not when shops are open, but as well the shopping is delivered to your door, so there is no need to physically got to the shops.
Information search is the main use of Internet by most customers, and internet users are perceived to be well informed customers (Molesworth and Suortti, 2002). It allows to quickly finding out information about products without leaving home (Hui and Wan, 2007). Internet intermediaries such as comparison websites allow for fast, easy search for relevant products and their comparison from different retailers, which can be located both online and offline.
Internet shopping is perceived to be a convenient medium for shopping. Hui and Wan (2007) summaries literature on convenience of Internet and according to them, Internet shopping perceived to be convenient, because of: it availability 24/7; the amount of time it saves on physical visits to the shops; reduction on effort to visit shops; comfort of own home; comfort of speed depending on each individual preference. Hui and Wan (2007) argue that this convenience of Internet is making customers less conscious of the price.
Burt and Sparks (2003) cited in Hui and Wan (2007) give an example of software purchase over the Internet, there is no need even to wait for its delivery, as it can be downloaded in the matter of minutes from the Internet and there is possible trial period when person can use software without paying for it upfront.
Molesworth and Suortti (2002) put forward suggestion that customers are expecting for online price for the product to be lower than offline. According to Hui and Wan (2007) price should be lower, as mentioned in Section on Internet effect on Business, there are less physical shops and less labor which should lead to overall cost reductions. On the other hand findings of Donthus and Garcia (1998) cited in Hui and Wan (2007) suggest that online shoppers are not price orientated because they have higher disposable income. This is also supported by the argument from the above Convenience section.
e) SALES PEOPLE
On the positive side, for some product categories where there is a possibility to be pressured into agreement from sales team, customers are more likely to adopt internet for pressure free environment (Molesworth and Suortti, 2002).
f) VIRTUAL SELF
Internet allows for disembodied communication. In its space people are creating their own self without any restriction from the way they look, their age, or gender (Kacen, 2000). This allows customers to brows and purchase things they want or fantasize about, without being limited by stereotypes or being afraid to be seen in certain shops.
The negative features of the Internet shopping are presented below under sections: security, trust, physical, human-interaction, and delivery.
There was a boom of online companies, when internet started growing fast, but many have failed leaving customers with perception of low security on Internet (Hui and Wan, 2007). Though, customers are still making the purchases over Internet. The main risk perceived by internet customers is security risk that their financial and personal information is going to be intercepted by third party and used to get money from their accounts (Bush et al., 1998, cited in Hui and Wan, 2007).
The most repeatedly mentioned reason for not shopping on the Internet is trust (Perea y Monsuwe et al., 2004). As internet requires personal information before the purchase, it makes consumers uncertain and the more uncertainty the more trust a customer should have in the online retailer (Gronroos, 1994; cited in Fam et al., 2004). According to Hui and Wan (2007) when consumer will start trusting a particular online retailer, they will make repeat purchases with them.
The problem of trust towards online retailer is intensified with absence of salesperson and inability to touch product before buying it (Lynchet et al., 2001; Riechheld and Schefter, 2000; cited in Harris and Goode, 2004). These also is confirmed by Teo (2002) cited in Hui and Wan (2007) where the research showed inability to examine products as main downfall of Internet shopping. In addition it becomes the main problem in high involvement purchases (Hoffman and Novak, 1996; cited in Downie, 2006).
Although, absence of salesperson can be seen by some as advantage (see Section 2.3.1 e) Sales People), Perea y Monsuwe et al., (2004) suggest that sales people act as reassurance in offline retailing as perceived to an expert with ability to give required advise to the customers. Internet does not have salespeople and customers can feel unsure of their choice of the product (Molesworth and Suortti, 2002).
Manly it is the concern of waiting to receive the purchased product. As well the worry for the product being received faulty or broken can raise and anxiety. If customer will need for some reason to return the product it can involve the cost of sending it back, as not all companies are prepared to pay for return items. In Molesworth and Suortti (2002) research delivery issue has been raised as well, where customers feel that delivery time is unsuitable and the forms required to fill in are to complex.
I know the quotes are a bit outdated but they are still appropriate to the perception of online shopping. I am planning further to discuss the negative aspects and how to minimise such barrier to online shopping on the websites in order to increase the conversion.
If you would like detailed information about the references contact me on tatiana-l[at]london.com or on twitter tatiana_london.