Sohn&kim(2012) a study of influecing factors for purchase intentions in social commerce

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Sohn&kim(2012) a study of influecing factors for purchase intentions in social commerce

  1. 1. A study of Influecing Factors for Purchase Intentions in Social Commerce Jeong Woong Sohn and Jin Ki Kim Department of Business Administration, Korea Aerospace University 100 Hanggongdae gil, Hwanjeon-Dong, Deogyang-gu, Goyang City, Gyeongg- Do 412-791, Korea Tel: +82-2-300-0353 E-mail: eviljiyo@naver.com Department of Business Administration, Korea Aerospace University 100 Hanggongdae gil, Hwanjeon-Dong, Deogyang-gu, Goyang City, Gyeongg- Do 412-791, Korea Tel: +82-2-300-0353 E-mail: kimjk@kau.ac.krAbstractRecently, Social commerce expands real time by combining itself with social network services.The business model of social commerce is simple, it has great potential to create big sales.Due to this, the social commerce market is increasing sharply.At the aspect that how consumer as a new innovation service different from existing businesstransaction adapts the social commerce will determined the growth potentiality of futuresocial commerce, we need to check what type of attributes social commerce has.The purpose of this study is to make the social commerce to check the attirbutes and purchaseintentions as the users increase, and suggesting a marketing and strategy to the companywhich are trying to sell via social commerce providers and social commerce.This study finds the following: First, factor analysis reveals five attributes that can be used toclassify Social commerce – these are Economy, Necessity, Reliability, Interaction, SalesPromotion; and second, As a result of carrying out the Multiple Regession Analysis bymaking Purchase intention to be Dependent variable, Economy, Necessity, Reliability, SalesPromotion are shown to affect the Purchase Intentions.Through this research, entrepreneurs in social-commerce business can attract far morecustomers by figuring out the reasons for purchase and needs of them. And this research alsocan help to organize the strategy that can effectively manage the things explained above.Keywords: Social Network Service(SNS), Social commerce, Purchase Intentions 1
  2. 2. 1. Introduction SNSes are well-known as web-based services that help users to build a public orsemi-public profile over the internet. Users can share human connections with other userswhile exchanging their lists of connections with each other within the same system (Boyd &Ellison, 2007). From recent research, it has been found that the use of SNSs in the world hasbeen rapidly increasing. The number of users that uses the service increased by 87% in 2009from 2003 and the time they spend increased by 833% (Global trends in online shopping,2010). As Social Network Service (SNS) gets boosted, based on this, Social Commerceservice has been growing internationally. Social Commerce makes business transaction byconnecting producers and consumers through Facebook, Twitter, etc. of a typical SNS, andwas born in the United States in the middle of 2000. As Groupon succeeded in the UnitedStates in 2008, Social Commerce services have grown significantly. Furthermore, the popularization of such internet social communities and users’ desireto participate in such communities became important factors to increase social commerce.More general research in the USA (Forrester Research, 2007) than those about onlinecommerce reported that consumers are now starting to have more confidence in productpopularity or recommendations for products from other users than from one-waycommunication tools such as advertisements or other information provided by productmarketing companies. Yahoo introduced terminology of social commerce for the first time in 2005. At thebeginning, users use this terminology meaning services including sharing shopping list orevaluation on products. If commercial transaction is made in social media or there is anysocial factor in commercial transaction service, it can be considered as social commerce. Also, 2
  3. 3. it is not selling products, but can generate word of mouth though SNSs(Strabase, 2001). It has been developed in the form of social shopping or Social Commerce which is anew shopping approach combined with online shopping mall SNS. In other words, it is a newform of shopping mall which did not exist previously, and combined with SNS, it functionsthe new media beyond "Shopping”. Social Commerce created a new form of promotion that consumers determine aproduct by themselves and also contribute to the sales (Strabase 2007). In addition,consumers are able to see and share other consumer’s opinions or interests for a productthrough a variety of the path such as Product Review, Blog, SNS, etc. Thus, consumerscharacteristics of a member to participate in the process of commerce can be more importantthan in any other form of commerce. The largest providers of the Web Service Industry who have paid keen attention tothe rapid growth of the Groupon, the representative social commerce company in the UnitedStates, showed interest directly or indirectly since late last year in entering into the socialcommerce market. Facebook has over 600 million subscribers throughout the worldannounced in November 2010 that they launched their “Facebook Deals”. Google, the leaderof the U.S. web service market focusing on search services made an unconventional offer lastyear to take over Groupon at 6 billion dollars, but their offer was declined (Lee, 2011).Amazon, the representative leader of e-Commerce in United States announced that, after thefact was known by the public that Google was trying to take over Groupon, they invested 175million dollars in Living Social, the second largest company in the social commerce industry,and agreed mutually to carry out the business collaboratively (Strabase, 2011; Lee, 2011).Table1. Recent Moves of Google, Amazon and Facebook related to the latest Social Commerce. 3
  4. 4. Company Contents • Through the participation in 35 countries including United States, Canada, Brazil, Germany, Greece, France, Britain, Israel, Italy, Portugal, Spain, Japan, Poland, Turkey, Mexico, Peru, Chile, Colombia, etc., about 5,000 registered users have been obtained. Groupon • Considering the importance of locality due to the nature of Social Commerce business, entry to the world market has been made by acquiring the local companies. • Instant sales system has been introduced through the installation of Kiosk. • Made an unconventional offer late last year to take over Groupon at 6 billion Google dollars, but offer was declined by Groupon. •‘Google Offers’ services began in June. • Today daily deal site Groupon, Amazon invest 175 million dollars in Living Amazon Social, the second largest social commerce company in the America., and agreed mutually to execute the business partner.Source: (Strabase, 2011; DMC, 2011). Despite such aggressive moves by the large providers, Groupon still remains firmlyas the leader of the social commerce market in the United States. Groupen successfullysecured more than 60 million subscribers within two years after starting its service andattracted more than one billion dollars of investment in the form of venture capital. Grouponis still growing, marking annual sales equivalent to 760 million dollars through the servicesprovided from over 500 markets in 44 countries around the world (Strabase, 2011). The biggest change brought by social commerce is the change in the relationshipbetween companies and consumers. In the social commerce market, consumers not onlypurchase products, but also spread their experiences by word of mouth. That is, consumersproduce information and spread it by themselves. This has a great impact on the sales ofgoods and services. Through the information spread real time on the social network,companies can have the advantage of maximizing the effect of verbal advertizing withoutlarge costs. The objective of this study is to identify factors which affect users to use socialcommerce, as the social commerce market grows. 4
  5. 5. The reasons Social Commerce comes into the spotlight are 1) less marketing costsenable sales promotion, so it can be used for a small companys new marketing channels, 2)you can afford to enjoy a product at a reasonable price, 3) Due to recommendations byacquaintances, the confidence of the product is formed prior to purchasing, there is highpossibility of purchasing, 4) thanks to the growth of mobile devices such as smart phones andSNS, there is high possibility of the market growth (DMC, 2011). Leitner & Grechenig (2007) claimed that SNS has also changed online marketthrough continued participation of the users. Social Commerce has delivered shopping cultureto consumers in a new way over the entire generation, created trends and has reflected thediverse needs of consumers. With the advent of a smart phone recently, consumers are made possible to obtainreal-time information through SNS by connecting to internet anytime, anywhere. As varioussmart phone applications combining and providing information of current Social Commercesites began to be created, consumers are able to come across the information of SocialCommerce anytime, anywhere through the applications of a smart phone. If SocialCommerce can better satisfy information acquisition motive of consumers as more reliableinformation, Social Commerce will become a channel of new shopping information. Unlike the existing business transaction, Social Commerce, as innovative services, isrequired that its property shall be identified in because how to accept Social Commercedetermines the growth potential of Social Commerce in future. In addition, despite theinnovative distribution structure of Social Commerce becomes a worldwide sensation and israpidly growing, this study includes only a meaning as the basic data of Social Commerceresearch due to the lack of advanced research. Thus, the purpose of this study, as the users of Social Commerce increase, is to 5
  6. 6. investigate the properties that Social Commerce has and is to propose marketing and strategicdirection of the companies that intend to sell using Social Commerce providers and SocialCommerce. In particular, at the present time we meditate the true meaning of SocialCommerce, we will be able to reconsider the implications of this study in that a variety ofissues shall be diagnosed and examined.2. Social Commerce Business Model Social Commerce is a wider concept including the ones that individuals sell stuffthrough the SNS as well as electronic commerce based on a specific site. In other words,Social Commerce is a new concept that was born by combining the effects of traditionalonline shopping and word of mouth marketing (Tedeschi, 2006; Chevalier & Mayzin, 2006;Liu, 2006; Godes & Mayzlin, 2004). The biggest difference between Social Commerce and the existing electroniccommerce is that consumers play the natural role of the sellers through ongoingcommunication between sellers and consumers as a new network way. Communal purchaseSocial Commerce has a certain volume sold within the specified time and only if the salesvolume is met, large scale of discount will be applied. Thus, in order to receive greatdiscounts, consumers shall bring friends, acquaintances or a third party through the SNS. As one of Social Commerce features, a purchase is made within a specified time.Kruglanski (1989) argued that when consumers are pressured by the time or the quantity of aproduct, there will be Need for Closure that they intend to make a decision based oninformation search. Need for Closure is the answer as opposed to the confusion andambiguity, and it is the desire to get definitive answers about some issues. 6
  7. 7. Social commerce is new business of e-commerce model. So many companies thatwant to prove new products (Silverton, 2010). Levi’s, which is famous for its blue jeans,opened its ‘Friend Store’ on its website in April, 2010. People could use a ‘Like’ button aswell as easily take advantage of a Facebook Connect function through a link with Facebook.In this way, consumers can easily recognize in which clothes their friends as well as otherpeople are interested. After only one week of launching the store, it recorded over 4,000‘Likes’. Also, over 60,000 products have had at least one ‘Like’ until now. In addition to this,they found that an increasing number of people like Levi’s in Facebook (Kmobile, 2011). A new type of social commerce is to directly place a store and sell goods on an SNS.While Joint buying is an indirect utilization of SNSs and Link-to-Web direct utilization, thisnew type is to add a shopping mall in the SNS as a form of a tap or an application. Recently,an increasing number of companies are opening shopping malls on Facebook by usingshopping mall builders like Pavement, Alvenda and so on. By using these builders, you canuse additional functions such as joint buying and events as well as product registration,shopping carts, reviews, etc. Disney sold thickets for their famous animation movie ‘ToyStory 3’ on Facebook and Delta Airlines started an advance selling service of their tickets(DMC, 2011; Social commerce today, 2011; Kim, 2011).2.1 Social Commerce Four Types • Social Link This is to place a button on the commerce site linking to an SNS. If you click the button,you can automatically go into the posts writing window on your social network site through aweb-link or you can copy the web documents into a posting on your SNS(Bloter, 2011; DMC,2011). 7
  8. 8. • Joint Buying In this type, a joint buying site is combined with a social network. The price of goodswould be discounted if the selling quantity per item reaches a certain number. This willencourage the consumers to invite their friends to the joint buying through social networks.They sometimes have an incentive program to reserve cash or points for the consumerswhose friends become members of the site or goods are bought when new consumers areintroduced. The source of profit is an advertisement fee or a sales commission. Groupon andWipon are typical examples(Bloter, 2011; DMC, 2011).• Offline Connection This is a type that links off-line places to a social network through terminals capable ofnetworking. By utilizing location based services like Posqure, Gowala or Runpipe, consumersspread their experiences at off-line stores to social networks through mobile terminals(Bloter,2011; DMC, 2011).• Social Web It is a type that aggressively combines commerce with social networks, making itpossible to use social network functions on a commerce site. Such consumer activities aspurchasing, evaluations, reviews and so on are automatically reflected to the social networkand shared with friends. Consumers may see what their friends in the same social network doat the commerce site (Bloter, 2011; DMC, 2011). 8
  9. 9. 3. Theoretical Background3.1 Social Network Service (SNS) In traditional social network theory, a social network is defined as a set of socialentities that includes people and organizations which are connected by a set of sociallymeaningful relationships and who interact with each other in sharing values (Kwon & Wen2010). The definition of an SNS in Boyd & Ellisons theory is the most commonly used.Social networking service is web-based services and can connection by others within thesystem. The nature and nomenclature of these connections may vary from site to site (Boyd& Ellison 2007). Scholars have studied such social areas as privacy, social capital, youthculture, and education so far. In particular, Facebook is increasingly becoming the object ofscholarly research (Ellison et al. 2007; Ahn et al. 2007; Boyd et al. 2006; Haythornthwaite2005). There have been few attempts in the past to define and classify business models in theSNS industry. O’Murchu et al. (2004) presented a review of the classification of variousSNSs. SNSs earn money through various ways. For example, people are paying for varioussites. in particular, dating related site. However, revenue is typically gained in theautonomous business model via advertisements in the SNS industry (Lee, 2008). There arewebsites categorized differently such as movie, clothing and online business websites beingstudied to assess reliability, trust and web credibility. Social networking sites share onlineinteraction and communication with specific goals and patterns across different services. Thestructures and characteristics of online social networking services and functionalities mayvary significantly (Ahn et al. 2007; Bulter, 2001; Hu & Kettinger 2008; Alexander Richter &Koch 2008). 9
  10. 10. Previous research has analyzed several open and closed SNSs to identify theircommon functionalities and characteristics. Alexander & Michael (2008) and Ko, Hwang & Ji(2010) define the function of SNS by analyzing several websites of SNSes. Also, thecommon functions were defined in Table 2 resulting from a study of the relevant papers.Table 2. Functions of SNS Alexander & Ko et al. (2010) Functions of SNS Michael (2008) Function that enables you to search for those who Expert finding Expert search have expertise or things of interest, etc. Network Function that enables you to express your status, Identity awareness mood or feeling, etc. Function that enables you to share your messages or Exchange Communication conversations with others Contact Function that enables you to establish, communicate Connection management and manage a relationship with others Alexander & Michael (2008) suggests the functions of SNSes could be categorizedas Identity management (access rights can be direct or role based) and Context awareness (theawareness of a common context with other people). Ko et al. (2010) presents that SNSes alsoprovide the function of Content sharing (the function that enables sharing and distribution ofpersonal audio and video content).3.2 Online Shopping Mall Internet shopping mall is the Electronic retail market that supports the electronictransaction between enterprises & consumers, which is in contrast with modern shoppingmall concept. And Its been used in various terms, including Internet Shopping Mall,Electronic Shopping Mall,Virtual Storefront, Online Storefront, Internet Mall, Electronic Mall, etc. (Zimmerman, 1994). A sharp increase in on-line shopping business can be attributed to time and spatialconvenience and advantages in price comparison based on the characteristics of the internet. 10
  11. 11. As the number of internet users and internet usage increase, the way consumers use and willuse this interactive tool in or as part of their shopping decisions and practices continues toattract the attention of researchers and practitioners (Rohm & Swaminathan 2004; Brengmanet al. 2005). One way to think of these applications is that they merge online shopping and socialnetworking (Tedeschi, 2006). Chevalier & Mayzlin (2006) and Godes & Mayzlin (2004)studied the effect of word of mouth and revenue on consumer. Watts & Dodds (2007) studiespart of social phenomena by connecting with marketing-related fulfillment from socialnetwork perspective to. With the advent of E-Commerce, the need for personalized services has beenemphasized. Business researchers have advocated the need for one-to-one marketing(Resnick et al. 1994). One-to-one marketing attempts to improve the nature of marketing byusing technology to assist businesses in treating each customer individually. To be successfulin an increasingly competitive internet marketplace, researchers have stressed the need forcapturing customer loyalty (Reichheld et al. 1990). Schafer et al. (1999) has confirmed theexamples of recommender systems inside E-commerce and the function of one-to-one matchmaking, and customer’s royalty. To implement e-commerce solutions, it is necessary to have supporting information,and organizational infrastructure and systems. The benefits of e-commerce are not only forlarge firms; small and medium sized enterprises can also benefit from e-commerce. Inaddition, it can ‘‘level the playing field’’ with big business, provide location and timeindependence, and ease communication (Chong, 2000; Iacovou et al. 1995; Longenecker et al.1997; Purao & Campbell 1998 ). The capabilities and opportunities afforded by an internet-based electronic 11
  12. 12. marketplace significantly improve the productivity and competitiveness of participatingorganizations (Gunasekaran et al. 2002; Wilson & Abel 2002; DeCovny, 1998). E-commerce-based organizations tend to have higher annual revenues in comparison to otherorganizations (Neese, 1999; Lancioni et al. 2003; Gunasekaran et al. 2002). Previous research has identified four determinants of consumer acceptance withrespect to online shopping, namely consumer characteristics, personal perceived values,website design and the product itself. Many researchers have insisted on the importance ofproduct differences in online marketing. Spiller and Lohse (1998) proposed to divide 35properties of 137 internet retailers by strategies sought by web-based marketing. The onlinefeatures are the quality measures of Web system or services provided by the Web system. Asan internet shopping mall provides its major services via a web environment, the IS orientedview of the internet shopping mall suggests that the drivers for consumer acceptance arebased on the system features such as design, functionality, security, and information quality(Palmer, 2002 & Ranganathan et al. 2002) and services features, supported by the websystem, such as reliability, responsiveness, and empathy (Pitt et al. 1995). Van Slyke et al. (2002) point out gender differences in other online shoppingcharacteristics such as compatibility, complexity, result demonstrability, and relativeadvantage. Huff et al. (2000) emphasize nine critical success factors (CFS) for EC firms: First,add value in terms of convenience, information value, disintermediation, reinter mediation,price, and choice; second, to focus on a niche market and then expand; third, maintainflexibility; fourth, segment geographically; Fifth, get the technology right; sixth, managecritical perceptions; seventh, provide exceptional customer services; eighth, create effectiveconnectedness; and ninth, understand the Internet culture. 12
  13. 13. Plant (1999) studies the success factors associated with over 40 organizations in theUS and Europe and identifies the following seven CSFs: financial impact, competitiveleadership, brand, service, market, technology, and site metrics. Riggins (1999) presents aframework that identifies 15 key ways to add value to an organization’s e-commerce strategy.The extent to which each of these is utilized represents critical success factors. Similarly,Eight key drivers for EC operational success: system integration, customer orientation of IT,supply orientation of IT, international operation of IT, customer-related processes, supplier-related processes, customer e-business readiness, and supplier e-business readiness (Barua,Konana, Whinston & Yin, 2000). Chun & Choi(2004) confirmed the importance of the reliability, the economics ofprice and cost, customer service and convenience in the Factor Analysis for Online PurchaseDecision Attribute, and Lee(2000)presented convenience, cheap price, etc on the reasons topurchase goods through the online in the Study on User’s Purchase Pattern. Kim & Kim(2004) argued the needs for the strategies to lower prices or reduce costsincurred in the purchase step and to meet the requirements of users in order to attract users toonline purchases, and Ward(2000) explained the factors that influence the choice of the usersonline marketplace in terms of transaction costs and explained the main factors for that by theminimization of transaction costs. Monroe (1990) claims that the perception of the product value is formed by theproduct quality and price comparison. Thus, in light of the claims of Parasuraman, Zeithaml& Berry (1994) that perceived quality and perceived price were the antecedents of theaccumulated customer satisfaction. the product value perceived by product quality andproduct value will affect customers’ loyalty for a specific store( Parasuraman, Zeithaml &Berry, 1994). 13
  14. 14. Lynch, Kent & Srinivasan (2001) claimed that the factors affecting the purchasethrough the online purchase are Trust, quality and emotion, and as a result of analysis onimpact to purchase intention, the Trust factor influences the most (Tan & Thoen , 2001)presented that Trust played an important role in performing Loyalty of customer, Immersionand Purchase Intention, and Trust was found to have the main relationship with PurchaseIntention. Donny & Cannon (1997) defined the perception for credit and patronizing of theTrust target, and according to Lewicki & McAllister (1998), high Trust showed the featuresof belief, confidence, assurance, sincerity and etc. Kotler (1997) presented two criteria of consumer characteristics and consumerreaction. Consumer characteristics include geographic, demographic and psychologicalvariables, and consumer reaction includes Usage Situation and Usage Brand. Yoo (2010) explained that the attributes of the Internet shopping mall website had amajor impact on customer satisfaction, and information and system website attributesinfluenced customer satisfaction. Shopping mall features were claimed to be web design,order processing and stability, and marketing attributes of shopping mall to becommunications, merchandising and sales promotion. Eighmey & McCord (1998) suggested entertainment, information, structure anddesign of the sites as the attributes that users think are important. According to Hyon (2007),what makes web sites distinctive and competitive are information, entertainment, structure,cognition, interaction, search and connection. Choi (2009), the purchasing motivation ofconsumers is derived from the perceived image, shopping mall design, convenience ofshopping, quality of information, security and product price. Yoo (2010) classified the 14
  15. 15. marketing attributes of web sites as communication, commercialization and promotion andstudied the impacts of web site attributes on repurchase.3.3 Purchase Intentions Purchase Intention means the anticipated or planned future behavior of individuals,and it is the probability that beliefs and attitudes can be moved to act (Engel & Blackwell1982). Planned Behavior is the main concern of marketing researchers because a lot ofdecisions of companies are made from the prediction of consumer behavior. In order topredict such consumer behaviors, the studies regarding the relationship of attitudes andbehaviors have been made, and in the most studies, attitude changes have been identified as apredisposing factor of behavioral changes. Fishbein and Ajzen (1975) proposed the theory of reasoned action and mentionedthat reasoned action had the correlation of behavioral intention and actual behavior. In otherwords, the theory of reasoned action means that when humans determine whether to executeany action or not, what results they would think rationally will be caused by the outcome ofexecuting behavior, and the more positive consequences the results lead to, the more itsbehavior is likely to actually be executed. Looking at existing research about Purchase Intention, Hoffman & Novak (1996)argued that Flow should be facilitated in order to visit the website repeatedly and increasePurchase Intention on the internet. In order words, if you feel the joy during the visit to thewebsite, you will visit the site repeatedly and it could increase Purchase Intention on theinternet. 15
  16. 16. The factors that affect consumers purchase intention can be divided by productperception, shopping experience, customer service, consumer’s risk by purchasing, etc.(Javenpaa & Todd, 1997). The product recognition in shopping behavior of consumers areimportant criteria, on which shopping mall consumers will select, and the most importantfactors are Price, Product Quality, Product Variety and etc. And the factor that affectsconsumers purchase intention in the existing shopping is the shopping experience and theshopping is very important socially and personally for many people, and shopping experienceis also an important element in determining consumers purchase behavior (Holt, 1995). Social commerce marketplaces have four defining characteristics: 1) sellers (orshopkeepers) are individuals instead of firms, 2) sellers create product assortments organizedas personalized online shops, 3) sellers can create hyperlinks between their personalizedshops, and 4) sellers’ incentives are based on being paid commissions on sales made by theirshops (Tedeschi, 2006). In order to draw users attributes of social commerce marketplaces from the precedentdocumentary research, the functions and attributes of SNSes, four type of social commerce,internet attribute, E-commerce success factors, website & homepage attributes, shopping mallattributes are summarized in Table 3 below. 16
  17. 17. Table 3. Four Type of Social Commerce, Functions and attributes of SNSes, Internet Attributes, E-commerce Success Factors, Website & Homepage Attributes, Shopping Mall Attributes. Functions & Attributes ReferenceFour Type of Group Buying, Offline Connection, Social Link, Social Social DMC (2011) Web Commerce Identity management, Expert search, Context awareness, Alexander & Michael SNS Network awareness, Exchange, Contact management (2008) Functions Expert search, Communication, Connection, Content Ko, Hwang & Ji(2010) Sharing, Identity Internet Interaction, Internationalization, Communication, Jang(1998) Attributes Connection, Expense, Fun, Accord of time Information Value, Disintermediation, Reintermediation,E-commerce Price, Maintain flexibility, Segment geographically, Get the Huff et al. (2000) Success technology right, Manage critical perceptions, provide Factors Financial impact, Competitive leadership, Brand, Service, Plant(1999) Market, Technology, Site metrics Entertainment, Information, Structure, Design, Interaction, Eighmey & Perception, Search, Connection McCord(1998) Web design , Production , Sales Promotion Madlberger(2004) Information, Fun, Recognition, Interaction, Searching, Website & Hyun(2007) Connection, Perceived Usefulness Homepage Ease of use, Product information, Entertainment, Trust, Attributes Elliott & Speck(2005) Customer support, Currency Entertainment, Information, Homepage Construction Chen & Wells(1999) Convenience, Interaction, Private Preferences, Interaction Ghosh(1998) Information, Entertainment, Interaction Kim(2005) Lynch, Kent & Trust, Quality, Emotion Srinivasan (2001) Trust, Economy, Customer Service, Convenience Chun & Choi(2004) Comparison of Product Quality and Product Price Monroe(1990) Shopping Geographical, Population Statistics, Psychological variable, Mall Kotler(1997) Pursuit Benefit, Use Conditions, Use Brand Attributes Web design, Order Management, Safety Yoo(2010) Convenience, InformationUsefulness, Security, Payment Chung & Ko(2007) System, Communication, Customer Satisfaction Web design Liu&Arnett(1999) 17
  18. 18. 4. Social Commerce Model It is essential to examine the intrinsic functions and related users attributes of Socialcommerce marketplaces to draw attributes from it. Upon examination of precedent researchon functions of SNSes and four type of social commerce, internet attributes, E-commercesuccess factors, website & homepage attributes, shopping mall attributes, four attributes ofsocial commerce marketplaces are identified. Figure 1 shows these four attributes of socialcommerce marketplaces. As a result we propose a list of basic attributes of social commercemarketplaces.Figure 1. Social Commerce Attributes Model There are not much academic studies related to the new type of online socialcommerce which is based on SNS. Also, social commerce is not a new service, and it is theresult of development by adding the original online shopping mall with SNS. Therefore, thesocial commmerces attributes are Internet Attributes, E-commerce success factors, Internet& Homepage attributes, Shopping Mall attributes based on the social commercefunctions and 4 types of social commerce. As Four Type of Social Commerce, SNS Functionalities, E-commerce Success 18
  19. 19. Factors and Website Characteristics Shopping Mall Characteristics, 5 attributes of SocialCommerce are derived as shown below. Mapped social commerce attributes shown Table4. 19
  20. 20. Table 4. Mapped Social Commerce Attributes Four Type Attributes & Factors SocialCommerce of Social SNS Functions Attributes Internet E-commerce Success Website & Homepage Shopping Mall Commerce Attributes Factors Attributes Attributes Low price Price (Lee, 2004), Group (Huff, et.al.2000) Information Economy of price Economy - Economy of price Buying Expanse (Eighmey&Mccord,1998) (Chun & Choi,2004) (Chun & Choi, (Jang, 1998) 2004) Geographical, Offiline Segment Geographically Private preference Necessity - - Use situation Connection (Huff, et al.2000) (Ghosh,1998) (Kotler 1997) Exchange Information Group Reliability (Alexander & (Eighmey&Mccord,19 Buying Interaction Brand (Chun & Reliablity Michael 2008) 98) Social Link (Jang, 1998) (Plant, 1999) Choi,2004; Content Sharing(Ko, Trust Social Web Lynch, et.al 2001) et.al 2010) (Elliott&Speck,2005) Network awareness (Alexander & Interaction Social Link Interaction Interaction Michael 2008) - (Eighmey&Mccord,19 - Social Web (Jang, 1998) Communication 98) (Ko, et.al 2010) Sales Social Link Sales Promotion - - - - Promotion Social Web (Madlberger,2004) 20
  21. 21. 4.1 Social Commerce Attributes• Economy Kim& Kim (2004) argued the needs for the strategies to lower prices or reduce costsincurred in the purchase step and to meet the requirements of users in order to attract users toonline purchases, and Ward (2000) explained the factors that influence the choice of theusers online marketplace in terms of transaction costs and explained the main factors for thatby the minimization of transaction costs. The factor for online purchase decision attributes of Chun & Choi (2004) isidentified to be the economy for the reliability, prices and costs that is important. Berkowitz & Walton (1980) demonstrated that if clues about the price discount wereprovided, it could induce the consumers favorable response. As one of the main attraction ofSocial Commerce, consumers could receive a large discount through the group buying. Theprice plays a role in improving consumer’s perception and facilitating the buying behavior(Kukar-Kinney et al. 2011). Of Social Commerce Group business model, the form of group buying, when theminimum purchase quantity is achieved, takes a business model that is applied to half price.The price perceived by the consumer can change Purchasing Behavior of the consumer and itis expected to have different behavior from conventional Internet shopping mall. Therefore,based on the above leading papers and Group Buying Strategies of Social Commercebusiness models, the economy attributes of the Social Commerce are derived.• Necessity When there are Wants for any goods or services, a consumer will look for it.Marketing is the work to meet Needs and Wants through the medium of the product. Thus, to 21
  22. 22. understand the Wants of consumers is the starting point to understand consumer behavior.Belk (1979) said that consumers in the shopping process experience utilitarian shoppingvalue and hedonic shopping value at the same time. The utilitarian value has been treated asan important factor to influence purchase intention in an Internet shopping mall related study(Bloch & Bruce 1984). The study of Szymanski & Hise (2000) confirmed that the utilitarian value ofInternet shopping mall was the determinant for shopping satisfaction, and according to astudy of Park(2001) the utilitarian value significantly influenced the frequency on a site visit,which showed to play an important role in purchase intention again. Kotler (1997) proposed two criteria of consumer characteristics and consumerreaction, but consumer characteristics included geographical, demographic and psychologicalvariables, and consumer reaction included usage situation or usage brand. Social Commerce is strengthening partnership with convenience stores and caféliving shops as a specific location (off-line stores) customers purchase utilizing location-based services (LBS) in each area. In addition, social networks (SNS) as a link to the offline area (Offline area) becauseit can extend existing Internet shopping malls and other big ripple effect can be. Therefore,the above papers and the leading Social Commerce strategy, business model from the needfor Offline Connection (Necessity) properties were obtained.• Reliability The concept of trust is importantly recognized in exchange relationships and formsthe basis of strategic partnerships to improve the quality appearing in the interaction withtrading partners and improve level of cooperation to increase the involvement of relationship 22
  23. 23. between trading partners (Speckman, 1998). Javenpaa (1999) defined Trust in Internet shopping mall for the first time, andhighlighted the cognitive aspects of Trust and considered Trust to be reasonable selectionprocess by defining Trust as the intention of the consumer that rely on a seller and leave aseller in a vulnerable state. Hoffman & Novak (1999) claimed that the reason for consumers not to purchaseproducts through online was the lack of Trust between the Internet shopping malls andconsumers. Suh & Han (2003) and Morgan & Hunt (1994) argued that Trust was the mostcritical element to understand the successes and failures.When consumers make purchasing decisions, they often rely on Word-of-Mouth (WOM),recommendations, observational knowledge (a point of view knowledge) about otherconsumers (Dichter, 1966). Recommendations will have a positive impact on a purchase decision or will nothave effect anymore. The previous study said that when new products are launched,consumers can generate customer referrals in a variety of situations and spread the productsthrough word of mouth, and when consumers making purchasing decisions, they oftenreferred to the opinion of others (Mahajan, Muller & Bass 1995). Park & Park (2002) presented the study that the interaction between businesses andconsumers got more active, consumer confidence increased more. Kim & Eune (2011) proposed that SNS acquaintance-based product recommendationsystem gave larger confidence and preference than the one selected by the general public did.Social Commerce can recommend products to acquaintances by e-mail, instant messaging,social media message exchange and sharing functions and consumers can have confidencebefore they view the products. 23
  24. 24. • Interaction The definition for the interactivity has been proposed by many scholars, but has notshown nearly uniform opinion. The interactivity of is complex process and is defined as thedegree that two or more communication parties may affect with each other, communicationmedia and messages, and such impacts occur simultaneously (Liu & Shrum, 2002; Hoffman& Novak, 1996). Alba et al. (1997) defined the interactivity as never-ending two-waycommunicational characteristics between two parties, buyer and seller, and according toBerthon, Pitt & Watson (1996) study, Consumers gave more positive assessments and mademore favorable decisions for the sites perceived by high interactivity than for the sitesperceived by lower sites. Cho & Leckenby (1999), Hwang & McMillan(2002), Wu(1999), Yoo & Stout(2001)argued that interactivity have a positive impact on receptive attitude toward the website in anonline environment. Thorbiornsen (2002) claimed that the more active the interaction got, the more therelationship between brands and customers was shown to be enhanced, as a result of theanalysis on the impact of interactive communication to the marketing effect. Social Commerce can be shared easily with other people via the SNSs or generalcommerce site, provide product information to acquaintances via Email/Messenger andexchange comments by utilizing bulletin boards. Thus, based on the interactive attributes ofabove previous studies and SNS Function Social Commerce Social Link and Social webstrategy, the interactive attributes were derived. 24
  25. 25. • Sales Promotion Kotler (2001) defined that sales promotion was designed to stimulate faster ormassive purchase for a particular product on a short term basis to a consumer or aintermediate in order to encourage the sales and purchase of products or services, and definedsales promotion as all marketing activities to stimulate the purchase of customers or theefficiency of distributors, except for personal selling, advertising, public relations, etc. It can be defined as marketing activities providing additional incentive such as onlinecoupons, sweepstakes offers, discounts, rebates, etc. in the short term in order to induce animmediate response of customers. There is also the view of Value Shopping that the price is equal to the value, whichmeans shopping, looking for discounts and a bargain on sale (Arnold & Reynolds 2003).Consumers may have playful benefit by obtaining a bargain that increases sensoryinvolvement (participation) and interest (Babin et al. 1994). Value Shopping may also have something to do with Selection Optimization definedby Westbrook and Black (1985) because discounts or bargains can elicit satisfaction frompersonal achievement. Lichtenstein, Netemeyer & Burton (1995) classified as price-oriented promotionsincluding coupons, sale, etc. lowering the purchase price, and non-price-oriented salespromotion including sweepstakes, giveaways, etc. Unlike advertising, it refers to encouragingor stimulating means in the short term to induce immediate action of other consumers. Social Commerce has come up with strategies that coupons are issued for goods as ameans of promoting the sale targeted for consumers, and based on the above papers and 25
  26. 26. Social Link and Social Webs business model, the attributes for sales promotion were derived.5. Research Methodology5.1 Data Collection An online & offline survey was conducted to collect data. The sample was selectedfrom among individuals who are using social commerce services in Korea AerospaceUniversity.Initially, A pre-test, a pilot test and a main test have been conducted. Through the pre-test thisstudy refines a measurement instrument made by reviewing the previously available literature.Based on the results of the pre-test, this study further develops an instrument to measure themajor constructs and then conducted a pilot test. In terms of methodology, this study carriesout a factor analysis through 3 times (a pre-test, a pilot test, and a main test) surveys data andthen finalized the constructs regarding measurement reliability and validity to verify a causalrelationship model. This study selected 144 usable survey responses out of 160 for 10 days (from March22 to April 3, 2012) through an online & offline survey. The sample consisted of 57.6% maleand 42.3% female participants ranging from 20 to 49 years old, the majority of which were intheir twenties and thirties (77.7% and 14.5%, respectively). Respondents mainly usedTicketMonster (40.9%), Coupang (34%). The category mainly used in Social Commerce is food (43.7%), fashion (13.8%),performance (12.5%), and the purchase number through Social Commerce within the last sixmonths is 2 times to 41.6% . The number of access to Social Commerce is as follows: 1) Whenever thinking ofSocial Commerce (52%), 2) One or more times per week (20%), 3) Once a month (18%). 26
  27. 27. Recommended approach is as follows: 1) Word of mouth (story) (59%), 2) Instant messaging(24.3 %). Product satisfaction is followed in the order by satisfaction (56.9%), average (31.9%),very satisfied (7.6%), and overall satisfaction comes to 64.5%, so future repurchase of socialcommerce and the growth will be bright. In addition, the availability of the SNS is followed by Facebook (60.4%), Cyworld(10.4%), Twitter (10.4%) and 86.2% of SNS users uses Social Commerce. Those who have never purchased through Social Commerce are 16 out of 160 peopleto 10%. And in the survey asking non-purchasers why they have not used Social Commerce,80% of respondents have had insufficient awareness of Social Commerce. However, 14people were responded to have an intention of purchases. This seems to be absolute topromote Social Commerce and grow the market size of the future. Social Commerce is the service of combined form by SNS and Internet shopping, soit can reduce uncertainty that can occur in the purchase behavior through SNS and psychicaland temporal (time) costs required to obtain information. In this respect, it can be consideredthat the respondents with experience in using Social Commerce might think easier to useSocial Commerce and might think positive effects about the intention of using SocialCommerce. Most of the respondents have used social network services heavily: 55% of therespondents use at least one of the services for more than one hour per day. Hence, therespondents seem to be qualified to analyze attributes of social network services. Thedemographics of the respondents are shown in Table 5. 27
  28. 28. Items to measure constructs in the model were mainly adopted from prior research.Some minor wording changes were made for the SNS context. New constructs in the model,however, had to be constructed. All items were measured on a 5-point Likert scale, where 1 is disagree strongly and 5is agree strongly. SPSS18 was used as a statistical package for testing. All items are shown inAppendix A.Table 5. Attributes of respondents (n= 144) Items Number Percentage (%) Male 83 57.6 Gender Female 61 42.3 Under 20 0 0 21-30 112 77.7 Age 31-40 32 14.5 41-50 11 7.6 Over51 0 0 High school or below 0 0 College 0 0 Education Undergraduate 35 24.3 Graduate 109 75.6 Student 77 53.4 Manager 20 13.8 Specialized job 8 5.5 Occupation Service industry 29 20.1 Technical post 3 2.08 Housewife 5 3.43 Etc. 2 1.3 Ticket monster 59 40.9 WemakePrice 9 6.25 Coupang 49 34Mainly using Social NowShop 11 7.6 commerce Groupon 4 2.7 Daum Social Shopping 4 2.7 Etc. 8 5.5 Food 63 43.7 Performance 18 12.5 Beauty 14 9.7 Mainly using Leisure 8 5.5 Category Travel 4 2.7 Industrial 9 6.2 Fashion 20 13.8 Etc. 8 5.5 28
  29. 29. 1 over 57 39.5Recently 6 Monthly 2 over 60 41.6number of purchase 5 over 20 13.8 10 over 7 4.86 One or more times per day 14 9.72 One or more times per week 29 20Frequency of access Once a month 26 18 Whenever thinking of Social 75 52 Commerce Email 4 2.7 Talk 85 59.0Recommend method Messenger 35 24.3 general site 15 10.4 Etc. 5 3.4 Very Satisfaction 11 7.6 Satisfaction 82 56.9 Product satisfaction Normal 46 31.9 dissatisfaction 4 2.7 Very dissatisfaction 1 0.6 Facebook 87 60.4 Twitter 15 10.4 Me2day 2 1.3 SNS use Cyworld 15 10.4 Etc 5 3.4 No Account 20 13.86. Results Before running an exploratory factor analysis and reliability check, we checkedwhere the data satisfied the assumptions for factor analysis. The following three checks wereperformed (the correlation coefficient among question items, Bartlett’s test of sphericity, andthe Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy (MSA)). Validity is the extent to which a measure diverges from other similar measures.Testing for validity involves checking whether the items measure the construct in question orother constructs. With the exception of a strong correlation between some constructs (e.g.,Economy, Necessity, Reliability, Interaction, Sale Promotion), correlations were moderate,weak, or nonexistent (Table 5). 29
  30. 30. Reliability is the most common index of the validity of measures. It is used to checkwhether the scale items measure the construct in question or other (related) constructs; avalue of .70 or above is deemed acceptable (Fornell & Larcker, 1981). Cronbach’s coefficientalpha was used to test the inter-item reliability of the scales used in this study. Cronbach’salpha assesses how well the items in a set are positively correlated with one another. Ingeneral, reliability of less than .60 is considered poor, reliability in the .70 range is consideredacceptable, and reliability greater than .8 is considered good (Sekaran, 2003). As shown inTable 6, all of the alpha values were greater than the recommended level and showed goodreliability with Cronbach’s alpha (>.70) in each construct. Factor analysis was done using the data collected from the first version of the survey.The cut-off criteria had a factor loading of 0.60. The analysis was done using a stepwiseapproach. The question item which had the lowest maximum factor loading was removed. Ifthe lowest maximum factor loading was less than 0.60, factor analysis was repeated until thelowest maximum factor loading was greater than 0.60. Three items were finally omitted.Values of 0.50 and above are recommended for factor analysis (Fornell & Larcker, 1981). Inaddition, factor analysis was used to examine construct validity. The Kaiser–Meyer–Olkintest and Bartlett’s test of sphericity were first used to assess the appropriateness of thecorrelation matrices for factor analysis (Hair, Anderson, Tatham, & Lack, 1998). Thus we can conclude that the data satisfies the assumption for the factor analysis.The result of Bartletts test of sphericity in this study shows that Sig (P) = 0.000 < α(=0.05) (χ2=1887.242, df = 190). The result implies that there is no evidence that the correlation matrixis an identity matrix. All seven factors showed a number of strong loadings, and all variablesloaded substantially on only one factor. The results of this analysis provided evidence ofconstruct validity (Table 7). 30
  31. 31. Table 6. Principal component analysis with varimax rotation and reliability check Number Cronbach’s Component 1 2 3 4 5 of items alpha Reliability8 .859 .116 .199 .064 -.037 Reliability12 .855 -.044 .184 .013 .163 Reliability9 .840 .203 .022 .103 .113 5 .931 Reliability10 .837 .127 .149 -.069 .099 Reliability11 .796 .118 .118 .025 .351 Reliability7 .776 .330 .221 .126 .085 Economy2 .157 .885 .097 .071 .093 Economy1 .077 .881 .108 .037 .108 4 .891 Economy4 .148 .803 .031 .167 .128 Economy5 .247 .741 .040 .314 .183 Interaction1 .182 .056 .862 .004 .080 Interaction2 .242 .115 .838 .036 .046 4 .865 Interaction3 .083 .021 .805 .048 .157 Interaction6 .138 .074 .762 -.044 .169 Sales .100 .162 -.065 .871 .127 Promotion7 Sales .098 .291 -.049 .852 .053 3 .819 Promotion11 Sales -.043 .012 .132 .803 -.113 Promotion3 Necessity1 .092 .101 .193 .099 .835 Necessity4 .196 .089 .272 .053 .793 3 .795 Necessity2 .202 .288 .007 -.109 .742 Eigen-value 6.880 2.910 2.165 1.801 1.422 % of variance 34.398 14.552 10.823 9.003 7.108 KMO. 839Note. Numbers in bold shows loading coefficients for items in each construct The results of examining the relationship between attributes of Social Commerce andvariables of purchase decision are shown in Table7. Overall, the directions between thevariables presented in model and research hypothesis were mostly consistent. 31
  32. 32. Table 7. Correlation matrix Purchase Sales Economy Necessity Reliability Interaction Intentions Promotion Purchase 1 Intentions Economy .571*** 1 Necessity .458*** .367*** 1 Reliability .602*** .403*** .396*** 1 Interaction .258*** .208*** .363*** .370*** 1 Sales .495*** .343*** .090 .109* .062 1 Promotion AVG 3.43 3.88 2.90 2.9 2.8 3.47 S.D .73 .68 .72 .66 .78 .94***p < 0.01 , **p<0.05 , *p<0.1 Multiple regression analysis was carried out by making 5 attributes of SocialCommerce including Economy, Necessity, Reliability, Interaction and Sales Promotion asindependent variables and making purchase decision of Social Commerce as the dependentvariable. The results conducted are shown in Table 8 conducted. As a result of analysis, only 4 different attributes including Economy (β = .233, p<0.01), Necessity (β = .199, p <0.01), Reliability (β = .452, p <0.01), Sales Promotion (β= .280, p <0.01) on purchase intention for Social Commerce have shown to have a significantat p<0.01 level, but Interaction has shown not to have a significant impact. In particular, Sales Promotion has showed the highest level at .280, which was themost influential to the purchase intention of Social Commerce users. Regression model hasshowed 46.960 at F value p=.000, and the explanatory power for Regression Model showedthe Adjusted R2=.616 at F value p=.000 to 61.6%. 32
  33. 33. Table 8. Economy& Necessity& Reliability & Interaction& Sales Promotion MultipleRegression Standardized Unstandardized Coefficients Coefficients T P Standard β beta error (Constant) -.248 .261 -.952 .343 Economy .233 .067 .217 3.507 .001*** Necessity .199 .061 .195 3.254 .001*** Reliability .452 .067 .410 6.705 .000*** Interaction -.030 .055 -.032 -0.552 -.582 Sales .280 .043 .360 6.518 .000*** Promotion R2 = .630, Adjusted R2= .616, F=46.960 (p=.000)***p < 0.01 , **p<0.05 , *p<0.17. Conclusions7.1 Implications Through the results of this research, we have identified the attributes of Economy,Necessity, Reliability, Interaction, Sales Promotion that consumers have thought about SocialCommerce emerging as a new distribution channel, and have studied what impact theattributes have given to purchase decision. The results of this study can be summarized as follows.First, respondents mainly used TicketMonster (40.9%), Coupang (34%). The category mainlyused for Social Commerce was followed by food (43.75%), fashion (13.8%). The purchasethrough Social Commerce 1-2 times or more within the last six months was 81%. Second, the number of access to Social Commerce was followed by wheneverthinking about Social Commerce (52%), one or more times per week (20%), once a month(18%), and product satisfaction was followed by satisfaction (56.9 %), average (31.9%), very 33
  34. 34. satisfied (7.6%), overall satisfaction (64.5%). In this respect, repurchase decision throughSocial Commerce and growth in future will be bright. Third, those who have never purchased through Social Commerce are 16 out of 160respondents, showing 10%. And in the survey asking non-purchasers why they have not usedSocial Commerce, 80% of respondents have had insufficient awareness of Social Commerce.However, 14 people were responded to have an intention of purchases. This seems to beabsolute to promote Social Commerce and grow the market size of the future. Fourth, the attributes affecting purchase decision of Social Commerce among 5attributes of Social Commerce Economy, Necessity, Reliability, Interaction and SalesPromotion have been found to be Economy, Necessity, Interaction and Sales Promotion. The results of this study performed for the purpose of identifying overall effects ofSocial Commerce attribute to purchase intention have significance in terms of academic andapplication perspectives. In the academic perspective, Social Commerce concept has been recently formed andgained interest, so the relevant study is at entry-level. Therefore, it can be the basis of relevant papers regarding Social Commerce in future.In addition, there is significance in showing a possibility of configuring the general theory bygeneralizing Social Commerce features. In the practical perspective (application perspective), it provides strategic elements tothe operators of Social Commerce or the merchants to sell goods through Social Commerce.In other words, according to the results of this study, the operators of Social Commerce andthe intermediary of Social Commerce should identify impacts on the purchase decision by theattributes of Social Commerce. 34
  35. 35. According to these analyzes, Social Commerce providers will be able to induce morecustomers by satisfying purchasing factors of Social Commerce and further preparesatisfactory information and provide information to effectively manage them by looking atthe users needs or motives carefully, and it will be helpful to organize the strategies to derivethe best business performance. Moreover, empirical studies for Social Commerce have been insufficient. Therefore,through this study, the attributes of Social Commerce only conceptually explained have beenproved, so it will helpful to other follow-up studies.7.2 Limitations and Future research This is the paper conducted in order to achieve the performance of managementstrategy by deriving the influence of Social Commerce attributes to user’s purchase intentionbased on existing literatures. This study, however, had several limitations which must be note. First, Application form, application motivation and satisfaction level considering thecharacteristics of SNS users have not been measured and not been applied to this study.However, in previous studies, the study regarding application motivation and satisfactionlevel of each SNS for each study has not been materialized. Second, the survey has been targeted at customers having used Social Commercelocated in Seoul and Gyeonggi Province, but sex ratio and age composition ratio of actualcustomers using social shopping do not fit, so there are limitations to expand the resultsobtained in this study to the data of the customers using nationwide social commerce.In future research, it is necessary to consider regional expansion for a survey, sex ratio andage composition ratio of customers who have actually purchased through Social Commerce. Third, there are limitations in that pilot survey and main survey have been conductedby targeting at 20’s to 30’s college students. It overlooked each age group may have different 35
  36. 36. motivations. In addition, depending on the type of product used primarily, the attribute thatconsumers know may be different, so degree of diversity of these products will need to beconsidered in future. Economy in Social Commerce may have a positive effect on purchase frequency ofconsumers for price discounts that Social Commerce companies claim. The marketing thatlures customers with special offer such as half price has been shown to stimulate customers toopen their wallets. For the continued growth of Social Commerce in future, it is essential to manage theconsumer’s satisfaction so that the action for repetitive repurchase can take place. Thus, itmay be a problem that consumers using Social Commerce for fun and convenience do notfeel satisfaction in real purchase experience. For the reasons that consumers expecting Social Commerce as a means of excitementand convenience are not satisfied after the actual experience of use, we will need to make in-depth study in future on whether to be simply unsatisfactory quality of the product or serviceor whether levels of consumer expectations are not high or whether another factors exist. As it is a social network-based e-commerce form, the relations that the influence ofSNS or the effect of Word-of-Mouth (WOM) in Social Commerce affects will need to bestudied. In order for Social Commerce market to continue to grow in the future, the study onthe motivation and impact factors of non-purchased consumers will be needed, despite greatdiscounts benefit, convenience and interesting elements of Social Commerce. 36
  37. 37. Appendix 1. Questionnaire ItemsThe following is a summation of the question items used in the study.All items solicited responses on a five-point Likert scale with 1 = strongly disagree, 2 = disagree, 3 =neutral, 4 = agree, and 5 = strongly agree.Economy (Arnold & Reynolds 2003; Caruana & Ewing 2010)1. You can buy product at a discounted price through social commerce sites.2. Prices are economical in social commerce sites.3. Values are higher than prices in social commerce sites.4. Prices are comparatively lower in social commerce sites than in other sites.5. In terms of prices, social commerce products are economical.6. You can save shopping expenses in social commerce sites.Necessity (Balasubramanian, Raghunathan, & Mahajan 2005; Peterson& Merino 2003)1. You can purchase what you want in social commerce sites.2. In social commerce sites, you can purchase products (coupons) suitable for an area that you want.3. In social commerce sites, you can see products by area.4. Social commerce provides location-based services (LBS).5. If you see products in the place of social commerce (home, company and so on), you becomeinterested in them.6. In social commerce sites, you can get information on products available in a specific place (home,company and so on).7. In social commerce sites, you can purchase products after getting coupons without any problem.Social commerce seems helpful to your life in purchasing products.Reliability (Koufaris & Hampton-Sosa, 2004)1. Social commerce sites are more reliable than other Internet shopping sites.2. I rely on social commerce information providers.3. I think purchasing processes through social commerce sites are reliable.4. I think that products and services I purchase through social commerce sites are reliable.5. I think I will not make mistakes when I purchase through social commerce sites.6. In general I reply on social commerce.7. Social commerce businesses are reliable.8. I rely on business information provided to me by social commerce businesses.9. In general, I rely on social commerce businesses.10. I rely on the product information provided by social commerce I use.11. I think that the social commerce products I purchase are reliable.12. I rely on the information provided by social commerce sites.Interaction (Deuze 2001; Chen & Wells 1999; Ghosh 1998)1. People can interactively communicate with each other through social commerce.2. People can smoothly communicate with social commerce businesses.3. Social commerce promptly responds to customers’ opinions and inquiries.4. Social commerce actively accepts customers’ proposals and opinions.5. There are a lot of other users’ questions and answers found in social commerce sites. 37
  38. 38. 6. Social commerce is interactive.Sales Promotion (Kotler, 1997)1. I purchase social commerce products when they sell at a discounted price or are on sale.2. I check if social commerce sells products at a discounted price before purchasing.3. I have experience in purchasing products because of their discount rates even though I have neverthought of buying them.4. Social commerce has a variety of discount coupon systems.5. The sales promotion of social commerce gives me values.6. Social commerce provides a lot of premiums and giveaways.7. I feel like buying when I see the discounted prices of social commerce.8. I think that social commerce offers big discounts.9. Social commerce sells products in a certain period.10. Social commerce has a variety of products.11. I feel like buying when I see the discounted prices of social commerce.12. I think positively about the reduction in price of social commerce.13. I will connect to social commerce in order to buy required products.14. I will connect to half-price social commerce in order to buy required products.15. I will visit social commerce sites to enjoy window-shopping.Purchase Intentions (Hong & Na, 2008)1. I will keep using social commerce.2. I will speak positively about social commerce to people around me. .3. I will recommend people around me to use social commerce.4. I am interested in social commerce products.5. I connect to social commerce sites even though I do not buy anything from them.6. I am planning to buy products from social commerce if I find them interesting. 38
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