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4 International Journal of E-Business Research, 4(3), 4-, July-September 2008
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               This paper appears in the publication, International Journal of E-Business Research, Volume 4, Issue 3
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                  e-Consumer behaviour:
  Past, Present and future Trajectories of an
          evolving retail revolution
                               M. Bourlakis, Brunel University, United Kingdom
                          S. Papagiannidis, Newcastle University, United Kingdom

                               Helen Fox, Newcastle University, United Kingdom


abstraCt
Several measurement scales have been designed by both practitioners and researchers to evaluate per-
Shopping online has emerged as one of the most popular Internet applications, providing a plethora of
purchasing opportunities for consumers and sales challenges for retailers. The aim of this paper is to shed
further light on the past and present status of the e-consumer phenomenon, by looking into online shopping
behaviour and by examining the major reasons for being motivated or being de-motivated from buying
online, focusing on the trust element. Building on that analysis, the possible future status of e-consumer
behaviour is presented via an examination of ubiquitous retailing, which denotes the next stage of that
retail revolution.

Keywords:          e-consumer; e-retail, internet shopping; retail revolution.




iNtroDUCtioN                                                        ing findings from the literature followed by
Shopping online has emerged as one of the                           a subsequent discussion on the present status
most popular Internet applications. Initially,                      of the phenomenon. The last sections provide
the selling focus was on durable, non-food                          our views on the future state of e-consumer
items such as books, but nowadays almost                            behaviour, by presenting ubiquitous retailing as
any product can be traded on-line. It is not                        a possible evolution of retailing, before drawing
surprising then that the major retailers have                       relevant conclusions.
capitalised on that selling format. For ex-
ample, in the U.K., Tesco was the first grocery                     iNterNet CoNsUMer
retailer to launch this facility in 1996.
                                                                    sHoppiNG: past statUs
     The paper examines the past, present and
                                                                    Rowley (1998) states that the Internet shopping
future status of e-consumer behaviour and aims
                                                                    experience has become a challenge for Internet
to shed further light on that phenomenon. The
                                                                    retailers that need to ensure success at each
next section analyses the past status of the
                                                                    stage (Figure 1).
e-consumer behaviour concept by discuss-


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      For the first two stages, the website can be                   titudes and behaviour. In a similar vein, Girard
adapted for each different consumer, allowing                        et al. (2003) illustrated how shopping orienta-
them to have their own home page for specific                        tion and demographics have differential roles
needs and wants. Their shopping habits can be                        to play, based on the type of product purchased
recorded, which helps in making the selection                        on the Internet. They also believe that gender,
and ordering a quicker experience. For the In-                       education, and household income revealed
ternet medium to be attractive to retailers, there                   strong influences on preferences for shopping
are a number of issues associated with delivery,                     online whilst convenience is another key reason
distribution, and relationships in the supply                        for purchasing online (Mayer, 2002; Phau and
chain that will need to be pre-considered.                           Poon, 2000; Poon, 2000; Seybold, 2002; Shim
      Focusing on the demographic element of                         et al., 2001; Teo, 2002; Thomas, 2003). A useful
the E-consumer, Mintel (2000, 2003) reports                          categorisation of the key influential factors for
that the UK Internet user is predominately male,                     Internet shopping is developed by Shim et al.
aged 20 – 30 and has an AB socio-economic                            (2001) including transaction services (related to
background. Gender is believed to influence                          security, product guarantees, safety, privacy, and
the extent and pattern of participation in web                       service), convenience (which relates to overall
activities and Rodger and Harris (2003) found                        speed of Internet shopping and freedom from
that women were less emotionally satisfied                           hassles), sensory experiences (which includes
with Internet shopping than men. Specifically,                       the social, personalising, and recreational expe-
females expressed lower emotional gratification                      riences of shopping) and merchandise (product
with Internet shopping and are more sceptical                        information, comparative shopping opportuni-
of online shopping than males, perhaps because                       ties, and variety of merchandise choice). The
that emotional bond with the retailer is not                         attitude toward Internet shopping encompasses
evident in a virtual environment (Rodger and                         specific attributes related to transaction services
Harris, 2003). Men reported greater trust in                         (Shim et al., 2001).
Internet shopping, and perceived the Internet                              Similarly, there have been many stud-
as a more convenient shopping outlet than did                        ies indicating reasons for abstaining from
women. Overall, emotion and trust are the two                        the Internet. Anon [A] (2002) states that, in
critical determinants of consumer shopping at-                       principle, web retailing is not a cheap option,



Figure 1. The stages of the Internet shopping experience (Source: Rowley 1998)


                                    Browsing and Product Identification

                                                                 ↓
                                               Selection and Ordering

                                                                 ↓
                                                Security and Payment

                                                                 ↓
                                                           Delivery


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International Journal of E-Business Research, 4(3), 4-, July-September 2008


compared to traditional retailing as the cost of                    Internet shopping and identify specific ‘trust
packaging, distribution, stock management, and                      building’ constructs. These include the follow-
record keeping is likely to be higher for distance                  ing: trustworthiness of the Internet merchant
selling compared to traditional retailing. Anon                     (ability, integrity, benevolence), trustworthiness
[B] (2002) cites security problems, the lack of                     of the Internet shopping medium (technical
trust in Internet retailers, the lack of Internet                   competence, reliability, medium understanding)
knowledge and finally, the long delivery time                       and other contextual factors (effectiveness of 3rd
for goods. Jones and Vijayasarathy (1998)                           party certification and effectiveness of security
suggest that individuals have unfavourable                          infrastructure). They also elucidate on the key
perceptions of Internet shopping security as                        parameters that may affect consumer trust in
they are wary of giving credit card details over                    Internet shopping, including credit card loss
the Internet and Rowley (1996, 1998) argues                         assurance policies, product warranty policies,
that businesses should provide alternative ar-                      policy on returned merchandise, availability
rangements. For example, consumers should be                        of escrow service, ability to schedule human
able to make arrangements using phone, fax,                         customer service sessions and, ability of user-
or post, should use tokens on different sites,                      friendly, reliable, efficient storefront interfaces
should apply encryption for their credit card                       with animated characteristics (Lee and Turban,
numbers and should use electronic cash by                           2001). Rowley (1998) also states that to attract
withdrawing ‘digital money’ from an Internet                        the Internet shopper, the Internet retailer needs to
bank and stored on the hard disk.                                   focus on the speed of transaction, convenience,
     Focusing on the ‘risk’ element, Forsythe                       selection, and price. Online shopping offers
and Shi (2003) analyse the types of perceived                       retailers the opportunity to gain new customers
risk and demographics on online shopping                            notwithstanding the given opportunities to im-
behaviour that contains six types of perceived                      prove customer loyalty (Roberts et al., 2003).
risk. These are the financial risk, the product                           To conclude, there is a range of factors that
performance risk, the financial risk, the social                    affect e-consumer shopping either positively (mo-
risk, the psychological risk, the physical risk,                    tivating factors) or negatively (inhibiting factors)
and time / convenience risk (Forsythe and Shi,                      and subsequently, they can motivate or de-motivate
2003). Product performance risk is defined                          shoppers. Table 1 synthesises the previous discus-
as the loss incurred when a brand or product                        sion providing a literature review thematic chart
does not perform as expected. Financial risk                        for the motivating and inhibiting consumer-related
is defined as a net loss of money to a customer.                    factors during online shopping plus possible areas
Psychological risk may refer to disappoint-                         for further improvement.
ment, frustration, and shame experience if
one’s personal information is disclosed. Time                       fUrtHer CoMMeNts oN tHe
/ convenience risk may refer to the loss of time
and inconvenience incurred due to difficulty of                     preseNt statUs
navigation and / or submitting orders, finding                      The previous analysis examined academic
appropriate web sites, or delays receiving prod-                    material published till 2004 and hence it will
ucts. Social risk involves fears of isolation from                  be worth considering whether any progress
people and not receiving the pleasure whilst                        has been made on the issues raised in Table 1.
shopping. Physical risk involves not being able                     Aiming to address this point, the current sec-
to use the senses, such as touch and smell.                         tion analyses relevant material published in
     In order to alleviate these risks, trust is                    professional associations’ magazines, govern-
required. This becomes a prerequisite for foster-                   ment reports and practitioners’ journals from
ing and nurturing online shopping relationships.                    2005 onwards.
Aiming for that, Lee and Turban (2001) propose                           Specifically, there are still security con-
a model for developing consumer trust during                        cerns relating to Internet transactions amongst



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is prohibited.
International Journal of E-Business Research, 4(3), 4-, July-September 2008 


consumers and in 2006 it was estimated that                         weighting in consumer decisions about online
almost $2 billion would be lost (Finextra, 2006)                    shopping” (Brown et al., 2007, p. vi). Also, of-
in existing and potential e-commerce sales. That                    fering customer incentives can only strengthen
survey, executed by Gartner with 5000 online                        that relationship with consumers. Under social
US adults, found that almost half of these (46%)                    embedding strategies, online firms capitalise on
had concerns about theft of information and                         their positive recommendations and positive
Internet data breaches. Similarly, the research                     word-of-mouth communications from friends
indicated that 70% of the surveyed online con-                      and family members and these firms could
sumers do not trust unknown companies and                           also use the Internet to disseminate reputation
delete suspicious emails from unrecognised                          information, as is the case with the major online
sources (Finextra, 2006). Another survey echoed                     retailer, Amazon, with its affiliate programme
the above and illustrated further how online                        (Riegelberger, 2006). Lastly, institutional em-
consumers were concerned about cyber crime                          bedding strategies include the development of
and are still concerned about online privacy                        trust programmes via the use of industry asso-
and security (NewsBlaze, 2007). Unavoidably,                        ciations and regulatory programmes. However,
these concerns lead to changes in online behav-                     Riegelberger (2006) argues that using trust as a
iour with online consumers preferring to shop                       differentiation point by online firms will soon
from recognised retailers which have already                        erode as online consumer expectations are on
worked on how to increase online consumer                           the increase and will soon become a ‘must do’
confidence.                                                         tool. An example of such an increase in online
     Therefore, it can be reasonably suggested                      expectations is apparent when online consumers
that trust is still of pivotal importance (and a                    engage in online window shopping. Based on
prerequisite) as it has always been for online                      a survey carried out by Scan-Alert examining
transactions. However, the most success-                            the behaviour of more than 7 million online
ful online firms, including retail firms, have                      shoppers, it was found that the average online
made the trust element the key differentiator                       consumer requires over 19 hours to make their
for their online strategies compared to other                       first purchase on a website following a first visit
online firms, which continued with the same                         (Leonard, 2005). That increased length of time
online customer practices and subsequently,                         indicates that current Internet shopping involves
have achieved mediocre results (Riegelberger,                       consumers spending a considerable amount of
2006). For example, the successful online firms                     time cross-checking and comparing websites
have developed detailed online trust-building                       or a ‘catalog of catalogs’ before making a final
strategies (see also Lee and Turban, 2001) with                     decision (ScanAlert, 2005). It also illustrates
their customers including a range of ‘embed-                        how online retailing is an ultra competitive
ding’ strategies such as temporal embedding,                        business and far more competitive than the
social embedding and institutional embedding                        traditional / physical retailing (Leonard, 2005).
ones. Firstly, temporal embedding implies de-                       Nevertheless, there is little evidence that price
veloping a strong relationship with a customer                      is the principal criterion of online shopping.
by signalling the firm’s long-term plans, goals                     However, providing to the consumer the ability
and investments or even by being attached to                        to check prices online and get the best possible
a well-established brand. It is not surprising                      price is, and will always be, a very attractive
then that many successful online retailers                          selling point (Brown et al., 2007).
are the ones which also enjoy a traditional /                             Brown et al. (2007) examined the demo-
physical retail presence and hence, are able                        graphic element of the E-consumer and reported
to transfer their positive brand image from                         that differences between demographic groups
physical retailing to online retailing. This can                    in the UK are gradually decreasing. This was
be partially explained by the fact that an estab-                   explained by the fact that specific consumer
lished, trusted brand does “carry considerable                      groups are catching up, including older people


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Table 1. The E-Consumer: A literature review thematic chart
   Central Theme                                Year                                 Major Findings
                             Author(s)
                          Girard et al.        2003       -    Shopping orientation and demographics have
   Motivating fac-                                             differential roles to play, based on the type of product
   tors for online                                             purchased on the Internet
      shopping                                            -    Convenience and recreational shoppers were the
                                                              dominant orientations that influence consumers’
                                                              preferences for shopping online, and this influence varied
                                                               with the product types
                                                          -    Gender, education, and household income revealed strong
                                                               influence on preferences for shopping online
                          Lee, Turban          2001       -    The parameters that may affect consumer trust in Internet
                                                               shopping include: 1) credit card loss assurance policies,
                                                               2) product warranty policies, 3) policy on returned
                                                               merchandise, 4) availability of escrow service, 5) ability
                                                               to schedule customer service sessions, 6) ability of user-
                                                               friendly storefront interfaces with animated characteristics
                          Morganosky,          2000       -    The majority cited convenience and time saving as their
                          Cude                                 primary motivation for buying groceries online
                                                          -    Shopping online appears to be the most advanced leading
                                                               edge technology in grocery shopping
                                                          -    Online grocery shoppers seem to recognise and value
                                                               differences between the online grocery shopping experience
                                                               and the in-store shopping experience
                          Phau, Poon           2000       -    Online marketing should be perceived as having five
                                                               components:
                                                               1) promotions, 2) one-to-one contact, 3) closing, 4)
                                                               transaction, 5) fulfilment
                                                          -    Internet shopping is generally still unfamiliar to most
                                                               Internet users
                                                          -    Expensive goods, such as automobiles, jewellery and stereo
                                                               systems are not ready for web selling. The monetary risks
                                                               involved in buying these products are too great. These
                                                               products also require more than visual inspection
                                                          -    People shop online mainly because of convenience
                          Poon                 2000       -    Industry sector dimension, actual experience of competitive
                                                               advantage, and quality information support are key to
                                                               Internet commerce benefit
                                                          -    For those retailers who have been online for about 2 years,
                                                               there is evidence that Internet commerce has been providing
                                                               benefit to its adopters
                          Rodgers,             2003       -    Emotion, trust, and convenience are three critical
                          Harris                               determinants of people’s shopping attitudes and behaviour
                                                          -    Females express lower emotional gratification with
                                                               e-shopping because of their inclination toward left-
                                                               hemisphere processing
                                                          -    Men reported greater trust in Internet shopping, and
                                                               perceived the Internet as a more convenient shopping outlet
                                                               than did women

                                                                                                 continued on following page




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International Journal of E-Business Research, 4(3), 4-, July-September 2008 9


Table 1. continued
                          Anon [B]             2002       -    The main concern for not purchasing online is security
      Inhibiting                                          -    Another reason for not purchasing online is that people
  factors for online                                           believe it is more enjoyable and easier to buy goods and
    shopping and                                               services in a store
   other concerns                                         -    Books, followed by Music (CDs) are the most popular
                                                               products purchased online
                          Forsythe, Shi        2003       -    Internet represents a fundamentally different environment
                                                               for retailing from traditional retailing media
                                                          -    Internet browsers appear to be much more concerned than
                                                               shoppers with the risk associated with Internet shopping.
                                                               Risk perception was much greater among browsers than
                                                               those who shop on the Internet
                          Koyuncu,             2004       -    Individuals are inclined to increase their shopping from
                          Bhattacharya                         the Internet since online shopping provides better prices,
                                                               and allows individuals to shop more quickly than other
                                                               shopping alternatives
                                                          -    Individuals tend to shop less from the Internet because
                                                               online shopping requires longer delivery time for items
                                                               bought online, and payment involves risk
                          Rowley               1998       -    The major problems with Internet shopping are transaction
                                                               problems / concerns, lack of credit card security, difficulty
                                                               in locating products / services, poor product quality /
                                                               insufficient information, technical problems in software /
                                                               slow interface
                                                          -    For Internet retailing to be attractive to retailers, there are
                                                               a number of issues associated with delivery, distribution,
                                                               and relationships in the supply chain that will need to be
                                                               satisfactorily resolved
                          Teo                  2002       -    Main deterrents to purchasing online have been customers’
                                                               preference to examine products, the need to possess a credit
                                                               card, and security concerns
                                                                                                continued on following page


and lower socioeconomic groups. In addition,                        that further developments will emerge from
Brown et al. (2007) noted that, although online                     these initiatives notwithstanding the rapidly
shopping is increasing its popularity to both men                   evolving and dynamic field we are dealing
and women, the purchasing behaviour between                         with. The next part provides a synopsis of these
them does vary.                                                     possible future developments and scenarios by
     Following the previous discussion, we can                      making the appropriate interconnections with
conclude that some progress has been made;                          the previous discussion.
however, there is still a long way to go with
a plethora of issues being unresolved. One of                       a fUtUristiC sCeNario:
these is the further enhancement of trust and
reduction of risk during online shopping. Apart                     WHeN is MY friDGe fiNallY
from the industry, the latter has also attracted                    GoiNG to orDer MilK?
the attention of research funding bodies as wit-                    Jones and Wijayasarathy (1998) suggest that
nessed by, inter alia, the considerable funding                     electronic shopping has the potential to radi-
given by the Data Information Fusion Defence                        cally alter the structure of shopping behaviour.
Technology Centre to De Montfort University                         Also, Forsythe and Shi (2003) believe that the
in the UK (Net4now, 2007). It is anticipated                        Internet represents a fundamentally different
                                                                    environment for retailing from traditional


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0 International Journal of E-Business Research, 4(3), 4-, July-September 2008


Table 1. continued
                           Anon [A]            2002
                                                          -    Retailers need to address some of the concerns about credit
      Areas for
                                                               card security, since most online sales will involve credit
  improvement for
                                                               card payments
   online shopping
                                                          -    If you are trying to sell a product that is obtainable readily
                                                               from the local supermarket or high street, you are less likely
                                                               to succeed than if you are selling something rare, different,
                                                               or unusual
                                                          -    Web retailing is not a cheap option, compared to traditional
                                                               retailing. The cost of packaging, distribution, stock
                                                               management, and record keeping are likely to be higher for
                                                               distance selling compared to traditional retailing
                           Fram, Grady         1997
                                                          -    To improve shopping, respondents of this survey most often
                                                               asked for easier processes for locating products / services,
                                                               along with improved visuals / graphics
                                                          -    Women (in sample) find little difference between the quality
                                                               of goods found in local stores / catalogues and those sold on
                                                               the net
                           Jones, Wi-          1998
                                                          -    Electronic shopping has the potential to radically alter the
                           jayasarathy
                                                               structure of consumer in-home shopping behaviour
                                                          -    Security is an issue; channels may not be secure, and credit
                                                               card numbers might be intercepted and then misused
                           Mayer               2002
                                                          -    Consumers cite fear that credit card details will be stolen
                                                          -    Although certain things have improved, e.g. delivery, there
                                                               is still substantial room for improvement
                                                          -    Key information is often lacking, e.g. failure to disclose
                                                               whether a product is in stock
                                                          -    Returning goods and getting a refund was often problematic
                                               1996
                                                          -    Supermarkets are now using the Internet because ‘that’s
                           Raphel
                                                               where the customers are’
                                                          -    Customers are cautious about using the Internet for
                                                               shopping. They are concerned about security
                           Roberts et al.      2003
                                                          -    Significant number of people will stick to conventional
                                                               supermarkets for grocery shopping because of the nature of
                                                               social contacts and the need to touch and feel the products
                                                          -    Main driving force for groceries online is convenience and
                                                               time saving, but consumers are sensitive to product prices,
                                                               delivery charges, and Internet access costs
                                                          -    Deepest concern with Internet shopping is security
                           Rowley              1996
                                                          -    The Internet is useful tool for marketing (depending upon
                                                               the audience that you try to reach), but is far less effective
                                                               in generating sales
                                                          -    Security is a major issue with four methods overcoming
                                                               this; prior arrangements, tokens, encryption, and electronic
                                                               cash
                                                          -    The future of successful e-tailing will be about
                                                               rediscovering the fundamental principles of why people
                                                               really buy
                           Vijayasarathy       2003
                                                          -    There is a need to profile the online shopper using more
                                                               sophisticated psychographic measures such as shopping
                                                               orientations, rather than relying solely on demographics
                                                          -    Results suggest that shopper segments (community, home,
                                                               and apathetic) derived from shopping orientations differ
                                                               when online




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retailing media. However, any radical transfor-                     marketing, micro payments and location based
mations would have required new approaches                          services are among the first applications to reach
to consumer behaviour and attitude and one                          such devices, allowing the consumer to interact
could argue that improvements and electronic                        with near-by points of sales. For example, a
evolutions of existing shopping mechanisms                          consumer can buy refreshments from a vending
are not enough. For example, Fletcher (1999)                        machine and pay using his mobile phone or get
believes that grocery home shopping will never                      the latest offers from nearby shops.
be more than a niche market (only 4% of all                               In scenarios like the above, the customer
food shopping is done from home). This argu-                        is still largely in charge of the transaction and
ment finds support from Roberts et al. (2003),                      purchasing decision. In the future, this may
who suggest that a significant number of people                     change, as pervasive computing gradually finds
will stick to conventional supermarkets for                         its way in the environment and a wider-range of
grocery shopping, because of the nature of                          purchasing opportunities become a reality. At
social contacts and the need to touch and feel                      that point, rule-based purchasing may become
the products. Although it is difficult, especially                  an attractive proposition for consumers, who
when taking into consideration the fluid nature                     could program the points-of-sale to automate
of the networked environment, to predict what                       purchasing based on certain conditions (e.g. the
may happen in the future, one could draw                            chandelier would order light bulbs only when a
suggestions from one aspect of the evolution                        third of them were burnt out). Grocery shopping
of computing, that of ubiquitous computing.                         is ideal for this kind of purchasing. Most items
Ubiquitous computing encourages the seamless                        can be restocked with minimum associate risk:
integration of technology in the environment,                       not much is lost if you end up ordering a bit
allowing users to interact with it naturally.                       more milk and bread than you needed.
      Ubiquitous retailing could be an application                        When it comes to trust, it is difficult to
of such an approach to interacting with tech-                       hypothesise whether ubiquitous retailing will
nology. The pervasive nature of the interaction                     increase or decrease customers’ trust when
allows users to radically alter the mechanisms of                   shopping online, as this will depend on how
ordering goods. As everything could potentially                     each consumer uses the technology. The time
be transformed into a point of sale, the consumer                   and convenience elements of buying online
would be constantly surrounded by spending                          may be further enhanced, as customers will
opportunities that are accessible without having                    have a plethora of opportunities within their
to visit a web site, login, add the products to the                 environment to complete purchases, without
shopping cart and then checkout. Established                        being confined within the narrow boundaries
relationships, coupled with semi-automated                          of desktop computers. In addition, although
ordering mechanisms, could significantly alter                      browser security may not be an issue any more
the shopping experience. The convenience fac-                       (as there will be no browsers as we know them
tor could be easily further strengthened, if one                    today), security and privacy implications may be
allows the environment itself to assume some                        even more complicated. If securing one channel
control of the shopping. If a light bulb is burnt                   is as difficult as it has been, one can only start
out, then the chandelier could order one by                         to imagine the implications of securing and
itself. To some extent, we are already looking                      monitoring so many points of sale!
at this phenomenon: mobile commerce and                                   Such automated purchasing, based on rules,
location-based services.                                            will have a number of significant implications
      Mobile phones and other mobile devices                        for both the consumers and the retailers. Goods
like PDAs have gradually become powerful                            may be classified as commodity items whose
enough to provide an additional online conduit,                     purchasing could be delegated to the technol-
which has only recently started to look attrac-                     ogy and items that the consumer feels require
tive for wider commercial applications. Mobile                      personal attention when purchasing. For the


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2 International Journal of E-Business Research, 4(3), 4-, July-September 2008


first type of items impulse buying may suddenly                     up being the best profiling method ever! Data
become a thing of the past, as the consumer does                    mining techniques could potentially generate
not need to worry about having enough milk in                       very detailed customer profiles. In order to
the fridge again. Which products end-up in these                    take advantage of these, retailers would need to
two categories will depend on the consumer and                      rethink their customer relationship management
his special needs and requirements. This will                       strategies and how they market their products
probably result in consumers being positioned                       to the consumer. Whether convenience justifies
between the two emerging extremes: those who                        such extreme profiling, at least with today’s
would not mind automating as many of their                          standards, and whether balance between pri-
purchases as possible and those who would                           vacy and ease of purchasing can be achieved,
prefer the ‘traditional shopping’ and engage                        is something still to be seen. Considering that
in every step. There have been signs of such                        via the use of these techniques the retailer is
patterns already. For example, Seybold (2002)                       gaining consumers’ trust we recommend that
suggests that during shopping, consumers are                        retailers should formulate customer relation-
disappointed to lose the opportunity to touch                       ship management programs building on this
and feel the products and to make ‘impulse                          emerging relationship with consumers. Based
buys’. These customers would probably not                           on the arguments posed in this paper, we also
allow all their shopping to be automated, even                      propose a conceptual framework that depicts
if it were very convenient.                                         the retail revolution in online retailing, where
      From the retailers’ point of view, ubiqui-                    trust enjoys a different status depending on the
tous retailing may spark a chain reaction of                        stage of that revolution (see Figure 2).
changes, as they will not get to engage with                              Apart from the above, traditional order-
the customer in the same way. If the retailer’s                     ing processes will also be significantly affected.
role becomes that of a supplier automatically                       Issues like the ease of navigation of a web site
filling the consumer’s shopping basket and                          will not be featuring in the lists of consumer con-
delivering the goods, when is the retailer go-                      cerns, simply because there will be no need to
ing to build a relationship with the customer?                      visit a web site to order. Ubiquitous retailing, by
The answer may be that pervasive retailing                          definition, will aim to seamlessly integrate the
and especially automated shopping will end                          point of sale with the environment; ease of use



Figure 2. Trust and online retail revolution


                                                                                                 Future
                     Past Online                         Current Online                          Ubiquitous
                     Retailing                           Retailing                               Retailing



                  1990                     2000                                  2010                       2020



                                                                                               Consumer trust
                                                         Consumer trust                        forms the basis
                   Consumer trust
                                                         becomes a                             of a customer
                   is a prerequisite
                                                         differentiator                        relationship
                                                                                               programme




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International Journal of E-Business Research, 4(3), 4-, July-September 2008 3


will have to be an intrinsic characteristic of the                  by one retailer. In the second, and perhaps
new systems. The specialisation of point of sales                   more interesting scenario, a number of pre-
to perform well-defined purchasing would also                       defined retailers get to fulfil the order, based
allow for speedier transactions, enhancing the                      on their offered price. As the cart will be auto-
convenience factor. In fact, transacting models                     matically processed by the customer’s purchas-
themselves may be significantly affected. Instead                   ing agent, the best price will be selected among
of performing one-off transactions for many                         the prices offered by the different retailers, which
items, goods may be purchased one at a time or                      could spark ‘price wars’ among them! In such a
placed on temporary shopping carts, either on the                   networked environment, in which transactions
consumer’s or the retailer’s side. A balance will                   will be performed by automated agents, fine tun-
then be required between the processing-periods                     ing these agents would have a significant impact
of such carts (Figure 3), which could be time-                      on retailers’ adopted strategies.
based (e.g. once a day), cost-based (e.g. when the                        Finally, pervasive and ubiquitous shopping
items’ total cost reaches a predefined amount) or                   could help convergence in online shopping.
urgency-based (e.g. I need a light bulb now!). An                   Traditionally customers usually order products
example of such an approach can be seen in the                      that are of low to medium value, e.g. books
‘Intelligent shelves’ case (Metro, 2006), which                     or DVDs, but not very expensive items e.g. a
guarantees that customers no longer face empty                      house. They would not buy few low value items
shelves. The products placed in the system are                      (e.g. a few pieces of fruit or a box of washing
equipped with Smart Chips that contain informa-                     powder) from the online supermarket either,
tion relevant to the product itself or its logistic                 as it is easier to buy these from a nearby store
processes. A RFID reader integrated into the                        and any potential saving will be lost in the now
shelf automatically recognizes when an item is                      relatively high delivery cost, compared to the
removed by reading the product information.                         product’s cost. Automated purchasing could
Should stocks diminish, the system can take the                     result in economies of scale, extending the
necessary action.                                                   cost boundaries within which online retailing
      Shopping carts may be ‘retailer-based’ or                     currently operates, and reduce the impact that
‘market-based’ (Figure 3). In the first scenario                    the distance from the nearest store may have
the customer and the automated agents place                         on the decision to buy online.
the items in one cart that is to be undertaken



Figure 3. Ubiquitous retailing transaction modes



         Personal goods               Manual decision                                                  Retailer-based



                                                                    Transaction

                                         Time-based

            Commodity                     Cost-based                                                   Market-based

                                       Urgency-based




Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global
is prohibited.
4 International Journal of E-Business Research, 4(3), 4-, July-September 2008


CoNClUsioN                                                          refereNCes
The current paper has suggested a concep-
                                                                    Anon [A] (2002). Converting Web users to Web
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revolution in connection with consumer
trust and e-consumer behaviour. Whether                             Anon [B] (2002). Internet users weigh in worldwide:
these changes justify a claim that there has                        a new report finds that even though more Internet
been a radical transformation in retailing                          users plan to buy online this year, security is the
                                                                    highest concern for Web shoppers worldwide. Direct
or that these changes were just the natural
                                                                    Marketing 65(6), 28–36.
evolution of retailing, due to technological
advances, is something that can be debated.                         Brown, D., Oleksik, G.,  Bisdee, D. (2007). Con-
Either way, online retailing is here to stay;                       sumer attitudes review, Internet shopping – Annexe
although difficult to predict with what form                        E. Prepared for the Office of Fair Trading, Crown
and shape. The last section presented a                             Copyright.
potentially revolutionary scenario, that of                         Finextra (2006). Security fears scare off US custom-
ubiquitous retailing, signs of which we are                         ers from online banking, shopping. Retrieved July
already manifesting themselves through                              17, 2007, from: http://www.finextra.com/fullstory.
mobile commerce.                                                    asp?id=16204
     The authors consider this revolution                           Fletcher, W. (1999). Buying the groceries via home shop-
to be very useful to business managers and                          ping is not a fresh concept. Marketing (May), 16–17.
other stakeholders such as consumer bodies
and associations. For example, retail manag-                        Forsythe, S.M.,  Shi, B. (2003). Consumer patron-
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to confirm / disconfirm our findings, including                     on on-line shopping. Journal of Socio-Economics
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managers and consumers. The recommended
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another investigation.                                              ment, it’s comparison shopping. Retrieved July 17,
                                                                    2007, from Internet Retailer Web site: http://www.
                                                                    internetretailer.com.



Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global
is prohibited.
International Journal of E-Business Research, 4(3), 4-, July-September 2008 


Mayer, R.N. (2002). Shopping from a list: inter-                    Roberts, M. Xu, M.X.,  Mettos, N. (2003). In-
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consultancy-press-releases.asp?id=1492.




Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global
is prohibited.
International Journal of E-Business Research, 4(3), 4-, July-September 2008


Michael Bourlakis is currently a senior lecturer at Brunel University (UK). Michael has more than 10 years
experience dealing with marketing, distribution channels and supply chain management. Michael gradu-
ated in business administration at the Athens University of Economics and Business (Greece) and obtained
both his MBA and PhD degrees from the University of Edinburgh (UK). Michael worked as a research
associate at the Management Centre, University of Leicester (UK) and at the Oxford Institute of Retail
Management, Templeton College, University of Oxford (UK) and as a lecturer at Newcastle University. He
has published in various logistics, supply chain management and marketing journals.

Savvas Papagiannidis graduated from the physics department of the University of Newcastle upon Tyne.
Upon completion of his PhD he joined the eBusiness Group at the business school in the same University.
Savvas has started a number of eBusiness ventures and also worked as a freelance Internet developer. His
research interests include management of Internet and emerging technologies, high-technology related
entrepreneurship and e-business models.

Helen Fox has graduated from the School of Agriculture, Food and Rural Development at Newcastle
University.




Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global
is prohibited.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

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Bourlakis, 2008 et al e-consumer behavior

  • 1. IGI PUBLISHING ITJ4279 4 International Journal of E-Business Research, 4(3), 4-, July-September 2008 701 E. Chocolate Avenue, Suite 200, Hershey PA 17033-1240, USA Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.igi-global.com This paper appears in the publication, International Journal of E-Business Research, Volume 4, Issue 3 edited by In Lee © 2008, IGI Global e-Consumer behaviour: Past, Present and future Trajectories of an evolving retail revolution M. Bourlakis, Brunel University, United Kingdom S. Papagiannidis, Newcastle University, United Kingdom Helen Fox, Newcastle University, United Kingdom abstraCt Several measurement scales have been designed by both practitioners and researchers to evaluate per- Shopping online has emerged as one of the most popular Internet applications, providing a plethora of purchasing opportunities for consumers and sales challenges for retailers. The aim of this paper is to shed further light on the past and present status of the e-consumer phenomenon, by looking into online shopping behaviour and by examining the major reasons for being motivated or being de-motivated from buying online, focusing on the trust element. Building on that analysis, the possible future status of e-consumer behaviour is presented via an examination of ubiquitous retailing, which denotes the next stage of that retail revolution. Keywords: e-consumer; e-retail, internet shopping; retail revolution. iNtroDUCtioN ing findings from the literature followed by Shopping online has emerged as one of the a subsequent discussion on the present status most popular Internet applications. Initially, of the phenomenon. The last sections provide the selling focus was on durable, non-food our views on the future state of e-consumer items such as books, but nowadays almost behaviour, by presenting ubiquitous retailing as any product can be traded on-line. It is not a possible evolution of retailing, before drawing surprising then that the major retailers have relevant conclusions. capitalised on that selling format. For ex- ample, in the U.K., Tesco was the first grocery iNterNet CoNsUMer retailer to launch this facility in 1996. sHoppiNG: past statUs The paper examines the past, present and Rowley (1998) states that the Internet shopping future status of e-consumer behaviour and aims experience has become a challenge for Internet to shed further light on that phenomenon. The retailers that need to ensure success at each next section analyses the past status of the stage (Figure 1). e-consumer behaviour concept by discuss- Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 2. International Journal of E-Business Research, 4(3), 4-, July-September 2008 For the first two stages, the website can be titudes and behaviour. In a similar vein, Girard adapted for each different consumer, allowing et al. (2003) illustrated how shopping orienta- them to have their own home page for specific tion and demographics have differential roles needs and wants. Their shopping habits can be to play, based on the type of product purchased recorded, which helps in making the selection on the Internet. They also believe that gender, and ordering a quicker experience. For the In- education, and household income revealed ternet medium to be attractive to retailers, there strong influences on preferences for shopping are a number of issues associated with delivery, online whilst convenience is another key reason distribution, and relationships in the supply for purchasing online (Mayer, 2002; Phau and chain that will need to be pre-considered. Poon, 2000; Poon, 2000; Seybold, 2002; Shim Focusing on the demographic element of et al., 2001; Teo, 2002; Thomas, 2003). A useful the E-consumer, Mintel (2000, 2003) reports categorisation of the key influential factors for that the UK Internet user is predominately male, Internet shopping is developed by Shim et al. aged 20 – 30 and has an AB socio-economic (2001) including transaction services (related to background. Gender is believed to influence security, product guarantees, safety, privacy, and the extent and pattern of participation in web service), convenience (which relates to overall activities and Rodger and Harris (2003) found speed of Internet shopping and freedom from that women were less emotionally satisfied hassles), sensory experiences (which includes with Internet shopping than men. Specifically, the social, personalising, and recreational expe- females expressed lower emotional gratification riences of shopping) and merchandise (product with Internet shopping and are more sceptical information, comparative shopping opportuni- of online shopping than males, perhaps because ties, and variety of merchandise choice). The that emotional bond with the retailer is not attitude toward Internet shopping encompasses evident in a virtual environment (Rodger and specific attributes related to transaction services Harris, 2003). Men reported greater trust in (Shim et al., 2001). Internet shopping, and perceived the Internet Similarly, there have been many stud- as a more convenient shopping outlet than did ies indicating reasons for abstaining from women. Overall, emotion and trust are the two the Internet. Anon [A] (2002) states that, in critical determinants of consumer shopping at- principle, web retailing is not a cheap option, Figure 1. The stages of the Internet shopping experience (Source: Rowley 1998) Browsing and Product Identification ↓ Selection and Ordering ↓ Security and Payment ↓ Delivery Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 3. International Journal of E-Business Research, 4(3), 4-, July-September 2008 compared to traditional retailing as the cost of Internet shopping and identify specific ‘trust packaging, distribution, stock management, and building’ constructs. These include the follow- record keeping is likely to be higher for distance ing: trustworthiness of the Internet merchant selling compared to traditional retailing. Anon (ability, integrity, benevolence), trustworthiness [B] (2002) cites security problems, the lack of of the Internet shopping medium (technical trust in Internet retailers, the lack of Internet competence, reliability, medium understanding) knowledge and finally, the long delivery time and other contextual factors (effectiveness of 3rd for goods. Jones and Vijayasarathy (1998) party certification and effectiveness of security suggest that individuals have unfavourable infrastructure). They also elucidate on the key perceptions of Internet shopping security as parameters that may affect consumer trust in they are wary of giving credit card details over Internet shopping, including credit card loss the Internet and Rowley (1996, 1998) argues assurance policies, product warranty policies, that businesses should provide alternative ar- policy on returned merchandise, availability rangements. For example, consumers should be of escrow service, ability to schedule human able to make arrangements using phone, fax, customer service sessions and, ability of user- or post, should use tokens on different sites, friendly, reliable, efficient storefront interfaces should apply encryption for their credit card with animated characteristics (Lee and Turban, numbers and should use electronic cash by 2001). Rowley (1998) also states that to attract withdrawing ‘digital money’ from an Internet the Internet shopper, the Internet retailer needs to bank and stored on the hard disk. focus on the speed of transaction, convenience, Focusing on the ‘risk’ element, Forsythe selection, and price. Online shopping offers and Shi (2003) analyse the types of perceived retailers the opportunity to gain new customers risk and demographics on online shopping notwithstanding the given opportunities to im- behaviour that contains six types of perceived prove customer loyalty (Roberts et al., 2003). risk. These are the financial risk, the product To conclude, there is a range of factors that performance risk, the financial risk, the social affect e-consumer shopping either positively (mo- risk, the psychological risk, the physical risk, tivating factors) or negatively (inhibiting factors) and time / convenience risk (Forsythe and Shi, and subsequently, they can motivate or de-motivate 2003). Product performance risk is defined shoppers. Table 1 synthesises the previous discus- as the loss incurred when a brand or product sion providing a literature review thematic chart does not perform as expected. Financial risk for the motivating and inhibiting consumer-related is defined as a net loss of money to a customer. factors during online shopping plus possible areas Psychological risk may refer to disappoint- for further improvement. ment, frustration, and shame experience if one’s personal information is disclosed. Time fUrtHer CoMMeNts oN tHe / convenience risk may refer to the loss of time and inconvenience incurred due to difficulty of preseNt statUs navigation and / or submitting orders, finding The previous analysis examined academic appropriate web sites, or delays receiving prod- material published till 2004 and hence it will ucts. Social risk involves fears of isolation from be worth considering whether any progress people and not receiving the pleasure whilst has been made on the issues raised in Table 1. shopping. Physical risk involves not being able Aiming to address this point, the current sec- to use the senses, such as touch and smell. tion analyses relevant material published in In order to alleviate these risks, trust is professional associations’ magazines, govern- required. This becomes a prerequisite for foster- ment reports and practitioners’ journals from ing and nurturing online shopping relationships. 2005 onwards. Aiming for that, Lee and Turban (2001) propose Specifically, there are still security con- a model for developing consumer trust during cerns relating to Internet transactions amongst Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 4. International Journal of E-Business Research, 4(3), 4-, July-September 2008 consumers and in 2006 it was estimated that weighting in consumer decisions about online almost $2 billion would be lost (Finextra, 2006) shopping” (Brown et al., 2007, p. vi). Also, of- in existing and potential e-commerce sales. That fering customer incentives can only strengthen survey, executed by Gartner with 5000 online that relationship with consumers. Under social US adults, found that almost half of these (46%) embedding strategies, online firms capitalise on had concerns about theft of information and their positive recommendations and positive Internet data breaches. Similarly, the research word-of-mouth communications from friends indicated that 70% of the surveyed online con- and family members and these firms could sumers do not trust unknown companies and also use the Internet to disseminate reputation delete suspicious emails from unrecognised information, as is the case with the major online sources (Finextra, 2006). Another survey echoed retailer, Amazon, with its affiliate programme the above and illustrated further how online (Riegelberger, 2006). Lastly, institutional em- consumers were concerned about cyber crime bedding strategies include the development of and are still concerned about online privacy trust programmes via the use of industry asso- and security (NewsBlaze, 2007). Unavoidably, ciations and regulatory programmes. However, these concerns lead to changes in online behav- Riegelberger (2006) argues that using trust as a iour with online consumers preferring to shop differentiation point by online firms will soon from recognised retailers which have already erode as online consumer expectations are on worked on how to increase online consumer the increase and will soon become a ‘must do’ confidence. tool. An example of such an increase in online Therefore, it can be reasonably suggested expectations is apparent when online consumers that trust is still of pivotal importance (and a engage in online window shopping. Based on prerequisite) as it has always been for online a survey carried out by Scan-Alert examining transactions. However, the most success- the behaviour of more than 7 million online ful online firms, including retail firms, have shoppers, it was found that the average online made the trust element the key differentiator consumer requires over 19 hours to make their for their online strategies compared to other first purchase on a website following a first visit online firms, which continued with the same (Leonard, 2005). That increased length of time online customer practices and subsequently, indicates that current Internet shopping involves have achieved mediocre results (Riegelberger, consumers spending a considerable amount of 2006). For example, the successful online firms time cross-checking and comparing websites have developed detailed online trust-building or a ‘catalog of catalogs’ before making a final strategies (see also Lee and Turban, 2001) with decision (ScanAlert, 2005). It also illustrates their customers including a range of ‘embed- how online retailing is an ultra competitive ding’ strategies such as temporal embedding, business and far more competitive than the social embedding and institutional embedding traditional / physical retailing (Leonard, 2005). ones. Firstly, temporal embedding implies de- Nevertheless, there is little evidence that price veloping a strong relationship with a customer is the principal criterion of online shopping. by signalling the firm’s long-term plans, goals However, providing to the consumer the ability and investments or even by being attached to to check prices online and get the best possible a well-established brand. It is not surprising price is, and will always be, a very attractive then that many successful online retailers selling point (Brown et al., 2007). are the ones which also enjoy a traditional / Brown et al. (2007) examined the demo- physical retail presence and hence, are able graphic element of the E-consumer and reported to transfer their positive brand image from that differences between demographic groups physical retailing to online retailing. This can in the UK are gradually decreasing. This was be partially explained by the fact that an estab- explained by the fact that specific consumer lished, trusted brand does “carry considerable groups are catching up, including older people Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 5. 8 International Journal of E-Business Research, 4(3), 4-, July-September 2008 Table 1. The E-Consumer: A literature review thematic chart Central Theme Year Major Findings Author(s) Girard et al. 2003 - Shopping orientation and demographics have Motivating fac- differential roles to play, based on the type of product tors for online purchased on the Internet shopping - Convenience and recreational shoppers were the dominant orientations that influence consumers’ preferences for shopping online, and this influence varied with the product types - Gender, education, and household income revealed strong influence on preferences for shopping online Lee, Turban 2001 - The parameters that may affect consumer trust in Internet shopping include: 1) credit card loss assurance policies, 2) product warranty policies, 3) policy on returned merchandise, 4) availability of escrow service, 5) ability to schedule customer service sessions, 6) ability of user- friendly storefront interfaces with animated characteristics Morganosky, 2000 - The majority cited convenience and time saving as their Cude primary motivation for buying groceries online - Shopping online appears to be the most advanced leading edge technology in grocery shopping - Online grocery shoppers seem to recognise and value differences between the online grocery shopping experience and the in-store shopping experience Phau, Poon 2000 - Online marketing should be perceived as having five components: 1) promotions, 2) one-to-one contact, 3) closing, 4) transaction, 5) fulfilment - Internet shopping is generally still unfamiliar to most Internet users - Expensive goods, such as automobiles, jewellery and stereo systems are not ready for web selling. The monetary risks involved in buying these products are too great. These products also require more than visual inspection - People shop online mainly because of convenience Poon 2000 - Industry sector dimension, actual experience of competitive advantage, and quality information support are key to Internet commerce benefit - For those retailers who have been online for about 2 years, there is evidence that Internet commerce has been providing benefit to its adopters Rodgers, 2003 - Emotion, trust, and convenience are three critical Harris determinants of people’s shopping attitudes and behaviour - Females express lower emotional gratification with e-shopping because of their inclination toward left- hemisphere processing - Men reported greater trust in Internet shopping, and perceived the Internet as a more convenient shopping outlet than did women continued on following page Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 6. International Journal of E-Business Research, 4(3), 4-, July-September 2008 9 Table 1. continued Anon [B] 2002 - The main concern for not purchasing online is security Inhibiting - Another reason for not purchasing online is that people factors for online believe it is more enjoyable and easier to buy goods and shopping and services in a store other concerns - Books, followed by Music (CDs) are the most popular products purchased online Forsythe, Shi 2003 - Internet represents a fundamentally different environment for retailing from traditional retailing media - Internet browsers appear to be much more concerned than shoppers with the risk associated with Internet shopping. Risk perception was much greater among browsers than those who shop on the Internet Koyuncu, 2004 - Individuals are inclined to increase their shopping from Bhattacharya the Internet since online shopping provides better prices, and allows individuals to shop more quickly than other shopping alternatives - Individuals tend to shop less from the Internet because online shopping requires longer delivery time for items bought online, and payment involves risk Rowley 1998 - The major problems with Internet shopping are transaction problems / concerns, lack of credit card security, difficulty in locating products / services, poor product quality / insufficient information, technical problems in software / slow interface - For Internet retailing to be attractive to retailers, there are a number of issues associated with delivery, distribution, and relationships in the supply chain that will need to be satisfactorily resolved Teo 2002 - Main deterrents to purchasing online have been customers’ preference to examine products, the need to possess a credit card, and security concerns continued on following page and lower socioeconomic groups. In addition, that further developments will emerge from Brown et al. (2007) noted that, although online these initiatives notwithstanding the rapidly shopping is increasing its popularity to both men evolving and dynamic field we are dealing and women, the purchasing behaviour between with. The next part provides a synopsis of these them does vary. possible future developments and scenarios by Following the previous discussion, we can making the appropriate interconnections with conclude that some progress has been made; the previous discussion. however, there is still a long way to go with a plethora of issues being unresolved. One of a fUtUristiC sCeNario: these is the further enhancement of trust and reduction of risk during online shopping. Apart WHeN is MY friDGe fiNallY from the industry, the latter has also attracted GoiNG to orDer MilK? the attention of research funding bodies as wit- Jones and Wijayasarathy (1998) suggest that nessed by, inter alia, the considerable funding electronic shopping has the potential to radi- given by the Data Information Fusion Defence cally alter the structure of shopping behaviour. Technology Centre to De Montfort University Also, Forsythe and Shi (2003) believe that the in the UK (Net4now, 2007). It is anticipated Internet represents a fundamentally different environment for retailing from traditional Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 7. 0 International Journal of E-Business Research, 4(3), 4-, July-September 2008 Table 1. continued Anon [A] 2002 - Retailers need to address some of the concerns about credit Areas for card security, since most online sales will involve credit improvement for card payments online shopping - If you are trying to sell a product that is obtainable readily from the local supermarket or high street, you are less likely to succeed than if you are selling something rare, different, or unusual - Web retailing is not a cheap option, compared to traditional retailing. The cost of packaging, distribution, stock management, and record keeping are likely to be higher for distance selling compared to traditional retailing Fram, Grady 1997 - To improve shopping, respondents of this survey most often asked for easier processes for locating products / services, along with improved visuals / graphics - Women (in sample) find little difference between the quality of goods found in local stores / catalogues and those sold on the net Jones, Wi- 1998 - Electronic shopping has the potential to radically alter the jayasarathy structure of consumer in-home shopping behaviour - Security is an issue; channels may not be secure, and credit card numbers might be intercepted and then misused Mayer 2002 - Consumers cite fear that credit card details will be stolen - Although certain things have improved, e.g. delivery, there is still substantial room for improvement - Key information is often lacking, e.g. failure to disclose whether a product is in stock - Returning goods and getting a refund was often problematic 1996 - Supermarkets are now using the Internet because ‘that’s Raphel where the customers are’ - Customers are cautious about using the Internet for shopping. They are concerned about security Roberts et al. 2003 - Significant number of people will stick to conventional supermarkets for grocery shopping because of the nature of social contacts and the need to touch and feel the products - Main driving force for groceries online is convenience and time saving, but consumers are sensitive to product prices, delivery charges, and Internet access costs - Deepest concern with Internet shopping is security Rowley 1996 - The Internet is useful tool for marketing (depending upon the audience that you try to reach), but is far less effective in generating sales - Security is a major issue with four methods overcoming this; prior arrangements, tokens, encryption, and electronic cash - The future of successful e-tailing will be about rediscovering the fundamental principles of why people really buy Vijayasarathy 2003 - There is a need to profile the online shopper using more sophisticated psychographic measures such as shopping orientations, rather than relying solely on demographics - Results suggest that shopper segments (community, home, and apathetic) derived from shopping orientations differ when online Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 8. International Journal of E-Business Research, 4(3), 4-, July-September 2008 1 retailing media. However, any radical transfor- marketing, micro payments and location based mations would have required new approaches services are among the first applications to reach to consumer behaviour and attitude and one such devices, allowing the consumer to interact could argue that improvements and electronic with near-by points of sales. For example, a evolutions of existing shopping mechanisms consumer can buy refreshments from a vending are not enough. For example, Fletcher (1999) machine and pay using his mobile phone or get believes that grocery home shopping will never the latest offers from nearby shops. be more than a niche market (only 4% of all In scenarios like the above, the customer food shopping is done from home). This argu- is still largely in charge of the transaction and ment finds support from Roberts et al. (2003), purchasing decision. In the future, this may who suggest that a significant number of people change, as pervasive computing gradually finds will stick to conventional supermarkets for its way in the environment and a wider-range of grocery shopping, because of the nature of purchasing opportunities become a reality. At social contacts and the need to touch and feel that point, rule-based purchasing may become the products. Although it is difficult, especially an attractive proposition for consumers, who when taking into consideration the fluid nature could program the points-of-sale to automate of the networked environment, to predict what purchasing based on certain conditions (e.g. the may happen in the future, one could draw chandelier would order light bulbs only when a suggestions from one aspect of the evolution third of them were burnt out). Grocery shopping of computing, that of ubiquitous computing. is ideal for this kind of purchasing. Most items Ubiquitous computing encourages the seamless can be restocked with minimum associate risk: integration of technology in the environment, not much is lost if you end up ordering a bit allowing users to interact with it naturally. more milk and bread than you needed. Ubiquitous retailing could be an application When it comes to trust, it is difficult to of such an approach to interacting with tech- hypothesise whether ubiquitous retailing will nology. The pervasive nature of the interaction increase or decrease customers’ trust when allows users to radically alter the mechanisms of shopping online, as this will depend on how ordering goods. As everything could potentially each consumer uses the technology. The time be transformed into a point of sale, the consumer and convenience elements of buying online would be constantly surrounded by spending may be further enhanced, as customers will opportunities that are accessible without having have a plethora of opportunities within their to visit a web site, login, add the products to the environment to complete purchases, without shopping cart and then checkout. Established being confined within the narrow boundaries relationships, coupled with semi-automated of desktop computers. In addition, although ordering mechanisms, could significantly alter browser security may not be an issue any more the shopping experience. The convenience fac- (as there will be no browsers as we know them tor could be easily further strengthened, if one today), security and privacy implications may be allows the environment itself to assume some even more complicated. If securing one channel control of the shopping. If a light bulb is burnt is as difficult as it has been, one can only start out, then the chandelier could order one by to imagine the implications of securing and itself. To some extent, we are already looking monitoring so many points of sale! at this phenomenon: mobile commerce and Such automated purchasing, based on rules, location-based services. will have a number of significant implications Mobile phones and other mobile devices for both the consumers and the retailers. Goods like PDAs have gradually become powerful may be classified as commodity items whose enough to provide an additional online conduit, purchasing could be delegated to the technol- which has only recently started to look attrac- ogy and items that the consumer feels require tive for wider commercial applications. Mobile personal attention when purchasing. For the Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 9. 2 International Journal of E-Business Research, 4(3), 4-, July-September 2008 first type of items impulse buying may suddenly up being the best profiling method ever! Data become a thing of the past, as the consumer does mining techniques could potentially generate not need to worry about having enough milk in very detailed customer profiles. In order to the fridge again. Which products end-up in these take advantage of these, retailers would need to two categories will depend on the consumer and rethink their customer relationship management his special needs and requirements. This will strategies and how they market their products probably result in consumers being positioned to the consumer. Whether convenience justifies between the two emerging extremes: those who such extreme profiling, at least with today’s would not mind automating as many of their standards, and whether balance between pri- purchases as possible and those who would vacy and ease of purchasing can be achieved, prefer the ‘traditional shopping’ and engage is something still to be seen. Considering that in every step. There have been signs of such via the use of these techniques the retailer is patterns already. For example, Seybold (2002) gaining consumers’ trust we recommend that suggests that during shopping, consumers are retailers should formulate customer relation- disappointed to lose the opportunity to touch ship management programs building on this and feel the products and to make ‘impulse emerging relationship with consumers. Based buys’. These customers would probably not on the arguments posed in this paper, we also allow all their shopping to be automated, even propose a conceptual framework that depicts if it were very convenient. the retail revolution in online retailing, where From the retailers’ point of view, ubiqui- trust enjoys a different status depending on the tous retailing may spark a chain reaction of stage of that revolution (see Figure 2). changes, as they will not get to engage with Apart from the above, traditional order- the customer in the same way. If the retailer’s ing processes will also be significantly affected. role becomes that of a supplier automatically Issues like the ease of navigation of a web site filling the consumer’s shopping basket and will not be featuring in the lists of consumer con- delivering the goods, when is the retailer go- cerns, simply because there will be no need to ing to build a relationship with the customer? visit a web site to order. Ubiquitous retailing, by The answer may be that pervasive retailing definition, will aim to seamlessly integrate the and especially automated shopping will end point of sale with the environment; ease of use Figure 2. Trust and online retail revolution Future Past Online Current Online Ubiquitous Retailing Retailing Retailing 1990 2000 2010 2020 Consumer trust Consumer trust forms the basis Consumer trust becomes a of a customer is a prerequisite differentiator relationship programme Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 10. International Journal of E-Business Research, 4(3), 4-, July-September 2008 3 will have to be an intrinsic characteristic of the by one retailer. In the second, and perhaps new systems. The specialisation of point of sales more interesting scenario, a number of pre- to perform well-defined purchasing would also defined retailers get to fulfil the order, based allow for speedier transactions, enhancing the on their offered price. As the cart will be auto- convenience factor. In fact, transacting models matically processed by the customer’s purchas- themselves may be significantly affected. Instead ing agent, the best price will be selected among of performing one-off transactions for many the prices offered by the different retailers, which items, goods may be purchased one at a time or could spark ‘price wars’ among them! In such a placed on temporary shopping carts, either on the networked environment, in which transactions consumer’s or the retailer’s side. A balance will will be performed by automated agents, fine tun- then be required between the processing-periods ing these agents would have a significant impact of such carts (Figure 3), which could be time- on retailers’ adopted strategies. based (e.g. once a day), cost-based (e.g. when the Finally, pervasive and ubiquitous shopping items’ total cost reaches a predefined amount) or could help convergence in online shopping. urgency-based (e.g. I need a light bulb now!). An Traditionally customers usually order products example of such an approach can be seen in the that are of low to medium value, e.g. books ‘Intelligent shelves’ case (Metro, 2006), which or DVDs, but not very expensive items e.g. a guarantees that customers no longer face empty house. They would not buy few low value items shelves. The products placed in the system are (e.g. a few pieces of fruit or a box of washing equipped with Smart Chips that contain informa- powder) from the online supermarket either, tion relevant to the product itself or its logistic as it is easier to buy these from a nearby store processes. A RFID reader integrated into the and any potential saving will be lost in the now shelf automatically recognizes when an item is relatively high delivery cost, compared to the removed by reading the product information. product’s cost. Automated purchasing could Should stocks diminish, the system can take the result in economies of scale, extending the necessary action. cost boundaries within which online retailing Shopping carts may be ‘retailer-based’ or currently operates, and reduce the impact that ‘market-based’ (Figure 3). In the first scenario the distance from the nearest store may have the customer and the automated agents place on the decision to buy online. the items in one cart that is to be undertaken Figure 3. Ubiquitous retailing transaction modes Personal goods Manual decision Retailer-based Transaction Time-based Commodity Cost-based Market-based Urgency-based Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
  • 11. 4 International Journal of E-Business Research, 4(3), 4-, July-September 2008 CoNClUsioN refereNCes The current paper has suggested a concep- Anon [A] (2002). Converting Web users to Web tual framework illustrating an online retail shoppers. Strategic Direction 18(4) 10–12. revolution in connection with consumer trust and e-consumer behaviour. Whether Anon [B] (2002). Internet users weigh in worldwide: these changes justify a claim that there has a new report finds that even though more Internet been a radical transformation in retailing users plan to buy online this year, security is the highest concern for Web shoppers worldwide. Direct or that these changes were just the natural Marketing 65(6), 28–36. evolution of retailing, due to technological advances, is something that can be debated. Brown, D., Oleksik, G., Bisdee, D. (2007). Con- Either way, online retailing is here to stay; sumer attitudes review, Internet shopping – Annexe although difficult to predict with what form E. Prepared for the Office of Fair Trading, Crown and shape. The last section presented a Copyright. potentially revolutionary scenario, that of Finextra (2006). Security fears scare off US custom- ubiquitous retailing, signs of which we are ers from online banking, shopping. Retrieved July already manifesting themselves through 17, 2007, from: http://www.finextra.com/fullstory. mobile commerce. asp?id=16204 The authors consider this revolution Fletcher, W. (1999). Buying the groceries via home shop- to be very useful to business managers and ping is not a fresh concept. Marketing (May), 16–17. other stakeholders such as consumer bodies and associations. For example, retail manag- Forsythe, S.M., Shi, B. (2003). Consumer patron- ers should pay further attention to the trust age and risk perceptions in Internet shopping. Journal of Business Research 56, 867–875. element and should still differentiate their strategies by developing ‘trust-building’ Fram, E.H., Grady, D.B. (1997). Internet shoppers: programs with consumers. By doing so, they is there a surfer gender gap?. Direct Marketing 59 will be able to move to the next stage, which (9), 46 – 51. is the formulation of customer relationship Girard, T. Korgaonkar, P. , Silverblatt, R. (2003). management programmes, which were found Relationship of type of product, shopping orientations to be very appropriate for future ubiquitous and demographics with preference for shopping on retailing. Consumer bodies and associations the Internet. Journal of Business and Psychology should also take into consideration the pro- 18(1), 101–120. posed arguments, especially the one related to Jones, J.M., Vijayasaratgy L.R. (1998). Internet the future state of the revolution. We believe consumer catalog shopping: findings from an explor- that they will find these points extremely ben- atory study and directions for future research. Internet eficial in order to protect and guarantee the Research: Electronic Networking Applications and welfare and well-being of their members and Policy 8(4) 322 – 330. to minimise their possible exploitation. Koyuncu, C., Bhattacharya, (2004). The impacts Last but not least, further work is required of quickness, price, payment risk, and delivery issues to confirm / disconfirm our findings, including on on-line shopping. Journal of Socio-Economics further empirical research work with retail 33(2), 241-251. managers and consumers. The recommended revolutionary process in connection with the Lee, M.K.O., Turban, E. (2001). A trust model for trust element requires further attention whilst consumer Internet shopping. International Journal of Electronic Commerce 6(1), 75–91. the possible application of this revolution to other online firms, not just retailers, could form Leonard, K. (2005) .It’s not shopping cart abandon- another investigation. ment, it’s comparison shopping. Retrieved July 17, 2007, from Internet Retailer Web site: http://www. internetretailer.com. Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
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  • 13. International Journal of E-Business Research, 4(3), 4-, July-September 2008 Michael Bourlakis is currently a senior lecturer at Brunel University (UK). Michael has more than 10 years experience dealing with marketing, distribution channels and supply chain management. Michael gradu- ated in business administration at the Athens University of Economics and Business (Greece) and obtained both his MBA and PhD degrees from the University of Edinburgh (UK). Michael worked as a research associate at the Management Centre, University of Leicester (UK) and at the Oxford Institute of Retail Management, Templeton College, University of Oxford (UK) and as a lecturer at Newcastle University. He has published in various logistics, supply chain management and marketing journals. Savvas Papagiannidis graduated from the physics department of the University of Newcastle upon Tyne. Upon completion of his PhD he joined the eBusiness Group at the business school in the same University. Savvas has started a number of eBusiness ventures and also worked as a freelance Internet developer. His research interests include management of Internet and emerging technologies, high-technology related entrepreneurship and e-business models. Helen Fox has graduated from the School of Agriculture, Food and Rural Development at Newcastle University. Copyright © 2008, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.
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