Online shoppers have the propensity to be loyal to the store more than the brand. Nielsen (2008) determined that 60 percent of regular online shoppers vouched for their loyalty to a certain site on the basis of their previous experience. This proves online shoppers is a unique market that is worth studying because once you capture them, they stay.
Most studies on the attitude of consumer in making an online purchase is in the context of the cultural, social and psychological attitude of the consumer towards the technology. The nature of the platform lends credence to the approach of the research. However, an important aspect is left out in this assessment, the conceptual framework by which consumer buying behaviour lies. This is the basic process that most, if not all, consumers about to make a purchase go through.
General Online Shopping Trend
We must first understand the factors that affect the buying decision of online consumers. We can divide the influences to three categories: psychological, digital culture, and Economics
Nielsen (2008) determined that more than 85% of the world’s online population has made a purchase online and the heaviest online shoppers come from South Korea with 99% of their total population already into online shopping while another Asian country, Philippines, is on the other end of the rope with low online shopping habit. Only 45% of their digital population have purchased online.
Statistics like this make Asia a difficult continent to analyse but not surprising. Even its economy is so diverse. It has the most progressive Asian countries like Japan, China, and South Korea and some of the poorest, Philippines, India, and Vietnam. Although not directly proportional, the economy by way of the country’s Gross Domestic Product indicates the strength of the internet usage based on the figures on Nation Master and Digital Media Across Asia.
South Korea is one of the most advanced in economy and technology in Asia which developed their positive and trusting attitude towards the internet including online shopping (Oh, Kim, Shim, Park, & Jung 2009). Their comfort level and trust level on the online world has meld with the physical world that they almost don’t make any distinction. This allowed makes them become more concerned about factors that other countries may consider minor like the playfulness of the site. Online shopping in this country almost no different from shopping in a physical store
On other Asian countries, however, like Japan, youth has become more selective in their relationship. Their deep understanding of the internet and what it can do makes them segregate who or what they will trust (Matsuda 2000). They use mobile for their intimate relationships, computer for acquaintances (Ishii, 2004). They do not shun online shopping but they are careful, trusting only those sites known for legitimacy.
Clearly personal disposition influences online shopping decision which includes what to buy, where to buy, and how much to spend. Bellman, Lohse and Johnson (1999) said that people who are more immersed online tend to be more comfortable to do activities involving money online. This was affirmed by a study by Bhatnagar, Misra and Rao (2000) who enumerated that level of importance of the different factors affecting someone’s online shopping habits. First, the younger the person is, the greater the tendency to purchase online. Next, they will first check the reputation of the site and the quality of the site. If it provides rich customer experience, it signals that the people behind it are professionals, therefore, more trustworthy.
Jarvenpaa, Tractinsky, and Vitale (2000) accounted for the store size as a big contributor on whether online shoppers will trust a specific online shop or not. The bigger the size, the bigger the company, that’s the perception. For these heavy online shoppers, the most important factor on whether they will purchase from a site or not is the convenience of the experience (Li, 1999).
The security remains to be the biggest hindrance on potential online shoppers (Han, 2001) and can only be taken out of the equation once the site has established a good amount of reputation and when the shopper herself or himself gained some experience on online shopping (Ratchford et al. 2001; Senecal 2000; Sukpanich and Chen 1999; Ha et al. 2001).
The lack of physical contact makes online shops selling tangible items a unique business form. Much of their success will how they will be able to establish their reputation and gain customer (Chen & Dhillon, 2003). Almost immediately, an online shop must work on its legitimacy not only to deliver the items they promised but also the their capacity to make secure credit card transaction. HongKong residents, although heavy internet users, are very concerned about being hacked. They also don’t consider seals as an assurance that transactions done on that site is secure (Greenberg, Wing, & Liu, 2008).
Online shoppers would usually test a site buy buying a small items and using other means of payment like paypal. Through this transaction, they are able to gauge if the level of consumer service is what they expect it to be (Alam, Bakar, Ismail, & Ahsan, 2008). During the first transaction, four elements will play an important role: website design, reliability, customer service and security/privacy (Shergill and Chen 2005). The rationale is that the owners of the site should have been able to create a design that will make the shopping experience smooth from aesthetics down to fulfilment.
Website design is where a virtual model first serves a purpose. It is supposed look interesting and attract customer to stay. Once there, Ranganthan and Ganapathy (2002) identified four things that should be well integrated to a web site: information must be easy to find and access, form must be pleasing to the eyes and guide the consumer on where to look and where to go, security transaction and an assurance that the personal information will never be given to other companies.
All of these will make a consumer decide whether or not he or she will trust the person (Gefen, 2002; Jarvenpaa et al., 1999, 2000; Koufaris and Hampton-Sosa, 2004; Koufaris and Hampton-Sosa, 2002).
There are also small details that must be looked at like Bhatnagar et al (2000) claim that sites must provide ways on how to assure the consumer that transactions are secure like an actual warm body that may be reached when needed instead of automated machines or email messages. Having a warm body on the other and of the screen not only makes the site look big professional, it also allows the business to establish a personal relationship with the consumer.
The most obvious influence is the customer’s purchasing power. Without it, no transaction will even be entertained. It should be noted, though, that most of the time, discounts are expected from online purchase because of the well-developed knowledge that online shops don’t spend for much in maintaining a physical shop. Some of the most purchased items online are electronics (30%), home improvement (20%), kitchen (12%), furniture (12%), outdoor equipment (8%), and laundry (7%), including washing machines and dryers (Rodriguez 2009).
Website design is a huge influence on a person’s online shopping habit because it serves as a sign that the owners of the site are professionals. The company name and reviews also play a big part.
However, potential consumers will still test the site by making small purchases using non-credit card payment option just to test if the site is trustworthy. By making the first purchase, consumer will be able to determine if the site gives optimal consumer experience, if it is secure, and if the end product is at par with their expectations.
Other aesthetic enhancement such as 24/7 customer service and great visuals are not tools to gain the consumer’s trust but can be a tool gain the attention of the consumer, contribute to the credibility of the site, and if done right, an actual guide that will make the use of the site easier.