Online Shopping Behavior Review: An In-Depth Study

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Online Shopping Behavior Review: An In-Depth Study

  1. 1. Online Shopping Behavior Review: An In-Depth StudyIndexIntroduction: dilemma of online e-retailers…………………………………………………………..Page 1Abandoned shopping carts: reasons for suchtrends……………………………………………..Page 2Reviewing online shopping behavior: different influencingfactors…………………………Page 3 - 4IntroductionToday online shopping is everywhere but statistics show that e-commerce sitesare yet to achieve the full potential of their online ventures. Initial days of onlineshopping saw a marked rise in scams and spurious ventures. As peopleexperimented with online shopping and had an unpleasant experience, thewariness of customers began to rise. It has been seen that annually e-commercesites make losses overall though some sites fare better than others. The securitymeasures that are being taken to gain back consumer confidence are beingheightened every month. However, a confidence that was shattered in the initialperiod will take considerable time to mend and become strong again.The main trend can be seen from the statistics of the number of shopping cartsthat are abandoned at online sites. More than 60% of intended online shoppinggets curtailed abruptly and the shopping carts are left abandoned. In 2006 alone itwas estimated that, if 102 billion dollars was spent on online shopping ventures,the abandoned carts themselves cost the vendors about 61 billion in lost sales.Thus, this is an area that has captured the interest of many leading onlinemarketing research firms. Much research has been conducted to understand thebehavior of online consumers and what leads them to abandon their shopping
  2. 2. carts in online shopping ventures. The secret to such buying behavior of onlineshoppers will aid internet vendors greatly. Much of the lost revenue potential canbe captured if such buying trends are identified accurately.Abandoned Shopping Carts And Their ReasonsWhen one studies about review on online shopping behavior, the major stumblingblock is assumed to be the transaction completion stage. Why does a consumerstart to fill up his or her shopping cart but then abandon it midway? There areresearch studies to indicate that the website quality and payment transactionsecurity are the primary reasons which either convince a customer to proceedwith the transaction or abandon it midway. The quality and security that awebsite provides is depicted by several subtle factors. The presence of a reliablemerchant name who handles the payment processing for instance. This isimportant since many people are hesitant to divulge their credit or debit carddetails over the internet. Such fears are well founded since it has been found thatonline payment frauds have a likelihood of occurrence which is thirty percentmore than frauds in the real world.
  3. 3. In regard to gaining consumer trust, shopping behavior reviews show a directcorrelation between the privacy policy statement and the willingness to sharepersonal information online. Those websites which have detailed privacystatements which exude credibility usually have more success in gaining the trustof consumers. The next step lies in the impact of third party assurance seals andcertification. It has been seen that companies who provide security in onlinepayment transactions such as VeriSign have a positive impact on the minds ofconsumers. Those e-retailers who have the backing of such certification can enjoymore successful online transactions and sales.
  4. 4. Reviewing Online Shopping BehaviorWhen studying buying behavior or reviews on online shopping, there are manydemographic factors to be taken into consideration. The age and attitude ofshoppers towards online shopping has an impact on the likelihood of transactionsbeing completed online. In general it has been noted that younger shoppers aremore eager to shop and hunt for products online. But that does not automaticallytranslate into buying. Young people who are students may have aspirations formany products that they look for online. But being at a stage when they havelimited spending allowances, they are more hesitant to complete online shoppingtransactions. This demographics group is likely to experiment more and abandontheir shopping carts at the last moment. The older generation may be less likelyto browse for products but when they do, it usually ends up as purchases. That ismainly because the convenience of online shopping and bargains may well offsetthe hesitation of online shopping. Once a site gains the confidence of customers,the orders keep flowing in repeatedly by same section of consumers. Amongstdemographic factors, gender also plays an important role. It is a well known factthat women love to shop more than men. But that is a trait that is seen in theoutside world. When it comes to online shopping, does that still apply? Since theconvenience of online shopping remains same for men and women, it would stillindicate a greater tilt towards women. Housewives and women holding part timejobs or small vocational work usually find more time to browse through socialnetworks and shopping sites. Again, there are always a greater range of productsto shop for amongst women than amongst men. However, many women may feeltempted to buy products online but they may not feel secured to divulge theircredit card information readily. Again, many women have limited spending powerwhich leads them to abandon shopping carts more often than men.Amongst the factors that affect the internet buying behavior of people, theattitude towards buying from the internet is the first factor. This is a behavioralinclination to trust the internet as a source of shopping or place from where onecan buy goods and services and rely on the vendors or retailers for sending across
  5. 5. the goods and services as seen on the internet. The inclination to trust the onlineshopping sources is again built through certain social and economic customs.Many societies across the world are much less exposed to the online world thanothers. These societies will take considerable time to be educated about theconveniences of shopping online and again, may well burn their fingers beforethey learn to find their way around the internet. In modern urban societies youngand old are turning to the internet more these days as conveniences areexceeding their need for precaution. With the assurance seals of reputedpayment processors and privacy policy statements on every site, people arebecoming more relaxed about sharing their personal information online.The second factor that influences online buying is brand equity. Just as in thebrick and mortar world, companies too have to make their brands as establishedand recognized with the right attributes in the online market. Those brands whichalready have considerable brand equity in the real world face easier successonline as well. For those who are trying to build their online presence, they needto invest in considerable marketing efforts to make their presence known and toestablish a reliable brand image. Today many companies are launching onlineimages directly. Though that leads to considerable savings on one hand, it mayalso take time to gain the trust of people when a brand has a pure onlinepresence. However, there are many iconic websites and domains such as thoseselling internet music or online retailers who have become big names today withhuge turnover rates. Now business flows easy for them as they have theconfidence and trust of consumers across the world.The third factor that features in all review articles regarding online shoppingbehavior is concern for privacy of personal information. How well protected is thepersonal information that is asked by all websites when one goes to shop online?Nowadays every website or e-retailer wants to build a database of customers andtheir demographics who shop on their site or express an interest in their sites.The information can be used in many ways but what customers are moreconcerned is the leakage of information when one is divulging such details onsuch sites. There are rampant phishing software nowadays which can pick uppersonal details divulged in sites and use them in many harmful ways. Though
  6. 6. there are many privacy protective software that one has on their browser, thesame is expected on the sites where one is divulging their information. Websiteswhich gain the trust of consumers in this way are able to see increase in sales andprofits over time.As in case of real world shopping, much success of online ventures lies in the wayand the frequency of communication that they establish with their customers. Inthe case of online shopping, as per shopping trend reviews, the online mailerswhich are sent to inbox of registered members prove to be a constant reminderto the customers of the great deals that they are missing out at their e-retail sites.While in the real world it may be possible to ignore the billboards or thenewspapers, in the online world, the bombarding of mailers in one’s inbox isharder to ignore. Again, many online companies can personalize the marketingcampaigns as per demographics of online customers through the information thatthey pick up from their registration details. Thus, the online marketing campaignscan be more targeted and effective. Thus, communication is a tool which can beeffectively used in the online world of shopping. Consistent communication withone’s registered members will help one to gain their trust and will help to puttheir name on the top of the list when it comes to online shopping.The fifth factor that determines the success of online shopping ventures is theperceived usefulness of the product or service which is being sold online. Theonline is a medium which has its own characteristics. There are advantages andlimitations of the medium. Thus, shoes bought online is a much more recent fadthan electronic goods bought online. Web hosting is a service that can only bepurchased online while buying organic meat might be a more recent onlineshopping venture. Granted that technology is allowing people to perceiveattributes in goods and services than never thought possible, there are stillcertain goods which are more easily sold online than others. Hence, the perceivedusefulness of a good or service has much to do with its online retail success.Clothes, accessories and other lifestyle products have a higher success rate onlinethan grocery and other perishable goods. Thus, the nature of goods and servicesbeing sold online has much to do with the success that an online company sees.
  7. 7. The final factor that helps websites clinch successful transactions everyday is theperceived ease of use of technology used in their websites. There are manywebsites which may have an attractive design and layout but when it comes topayment processing, the websites lose customers as they redirect to a third partysite which requires elaborate steps to be completed in order to complete theonline transactions. People want convenience and speed along with securitywhen it comes to online shopping. And if a website is perceived as providing theright design and layout as well as minimal steps to complete a transaction,customers are going to return to the site over and over again. Many websitesunderstand this need. Thus, for registered customers who have already shoppedonline, their information is stored with due permission and these websites do notneed the customers to be filling in the details time and again. That allows one toreach the checkout page in the blink of an eye. These websites make shoppingwithin seconds and one loves to come back to such sites all the time.There are many in depth online market research papers which have delved intothe dilemma of failed online shopping transactions. Gaining the trust ofcustomers when the retailer is simply an online website and not a human facerequires considerable tact and strategy to convince customers. The online mediaof shopping has its own benefits and limitations and those who are able to cash inon the benefits and avoid the limitations are being seen as the onlineentrepreneurs of the 21st century. With rise in estate and logistics costs, theonline world will soon be the place to shop, from dinner for the night toinvestments for the future.

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