Acquiring goods and services via the Internet
First Monday

Acquiring goods and services via the Internet: consumer shopping perceptions



Abstract
The Internet is transforming communication, collaboration, and commerce. This research focuses on the commerce function and examines the nature of Internet transactions, in terms of the consumer needs fulfilled, the Internet as a contact vehicle (in purchasing) and the Internet’s acquisition function. A questionnaire is administered to undergraduate students to capture their perceptions on the above issues.

The findings indicate that the largest number of items being purchased via the Internet is to fill love and affiliation needs, with physical needs being second. The Internet is also considered to be convenient and flexible, but less reliable and secure. Finally, the Internet is perceived to be least similar to purchasing from a store. These findings will help organizations conducting business via the Internet to better address the needs and wants of consumers, and system designers, marketers, managers, etc. can use these findings when assessing their organization’s Web transaction activity.

Contents

Introduction
Literature Review
Methodology
Results
Discussion
Conclusion

 


 

Introduction

In 2001, approximately 64 percent of the U.S. had Internet access, with 52 percent having Internet access at home (Krishnamurthy, 2003). There are 148 million Internet hosts around the world as of January 2002 and the U.S. has 33 percent of the Internet users worldwide (Krishnamurthy, 2003). With the Internet and World Wide Web (WWW) allowing organizations and individuals to buy and sell products and services online all over the world, the number of Internet users will continue to grow. Overall, traffic at transactional Web sites is growing by nearly 60 percent per year and is predicted to produce $250 billion in consumer online transactions and $5.4 trillion in business online transactions by 2006 (Laudon and Traver, 2002).

The Internet is transforming business functions. This research focuses on the commerce function, specifically electronic commerce, and examines the acquiring of products and services via the Internet and WWW. More specifically, the study seeks to identify what consumer needs are being met and what perception individuals have of the Internet as a contact vehicle and of the Internet’s acquisition function. The findings of this study will allow organizations, choosing to conduct business via the Internet, to better address the needs of consumers.

 

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Literature Review

Electronic commerce is the electronic buying and selling of goods. It describes a range of market transactions that are enabled by information technology (Lederer, et al., 1997). The focus of this study is the “consumer needs” being satisfied in the electronic transaction. The study also addresses the perception of purchasing goods/services via the Internet.

Consumer Needs

Settle and Alreck (1986) identified five areas of consumer needs (i.e., Maslow’s hierarchy of human needs): (1) physical, (2) safety, (3) love and affiliation, (4) prestige and esteem, and (5) self–fulfillment. Physical needs apply to a consumer’s most basic needs. Goods that fall into this category are food, clothing, and shelter. Safety needs are a consumer’s need to be safe and secure, such as insurance, smoke detectors, and security systems. Love and affiliation needs apply to the consumer’s sense of belonging or the need of the company of others, such as perfume and cosmetics. Prestige and esteem needs are a consumer’s need for status, such as a home, jewelry, and a car. Self–fulfillment needs are self–actualization, the complete fulfillment of all basic human capacities, the enhancing of the individual, and the extending of the individual’s identity to create uniqueness. Examples of self–fulfillment goods are tanning salons, cosmetic surgery, and fitness equipment.

Many researchers and journalists have discussed the rise in consumer consumption via the Internet, yet they do not identify what products and services are being acquired and/or define what is considered “an Internet purchase.” Are individuals simply researching products/services for purchases to be made from another outlet or are they actually acquiring the products/services via the Internet? What consumer needs are being satisfied over the Internet, separating acquired products/services and researched products/services?

Twice as many people have visited e–commerce sites than have actually made purchases from sites (i.e., they are doing research) (Tweney, 1999). Bellman, et al. (1999) found that purchases online depend on whether users like to be online and the time they have to buy items elsewhere. The most important predictor of online buying behavior is “looking for product information” on the Internet (Bellman, et al., 1999). People turn to the Internet to search for product information and, in turn, buy goods and services. They decide to shop online based on the amount of time they have (Bhatnagar, et al., 2000). People with activities that consume their time have less time to search for and buy goods/services in the traditional way. Therefore, the number of months on the Internet, hours online per week, etc. spent searching for product information online predicts buying or not buying goods/services (Bellman, et al., 1999).

Gender is also an issue when satisfying consumer needs via the Internet. Women are the primary shoppers in America (Verdisco, 1999) and the fastest growing demographic on the Internet (Tambini, 1999). Women are turning to the Internet in order to save time, yet men continue to buy more online than women (Tweney, 1999). Many studies have focused on gender as a determinant of online shopping (Bellman, et al., 1999; Chiger, 2001; d’Astous, 2000), but does gender determine the number of goods/services that are researched/purchased?

Research Question 1:

1A — What needs are consumers attempting to satisfy over the Internet: Physical, safety, love and affiliation, prestige and esteem, and/or self–fulfillment? (i.e., what goods/services are being researched and/or purchased over the Internet?)

1B — Does the number of items researched/purchased depend on the time spent on the Internet by the individual?

1C — Does the gender of the individual determine the number of goods or services researched/purchased?

Contact Vehicles

There are many vehicles that can be used to acquire products/services in a marketplace. The Internet has become one of these vehicles. If individuals are using the Internet to acquire products/services, what do the individuals consider the Internet vehicle to be most similar to? The vehicles are primarily in the form of a “contact,” such as the mail, phone, a store, Internet, and Web television. These are the ways in which the products/services are acquired. A mail contact is the equivalent to mailing in an order that could have been found in a catalog, on television, etc. A phone contact is the ordering of a product via the voice phone system. A store contact is the ordering/purchasing of a product or service from a physical store. An Internet contact is the acquiring of a product/service via the order from the World Wide Web. Finally, a Web television contact is the use of Web–based television to order products/services.

Each individual will have a preference as to his/her preferred purchasing outlet and perceptions about that outlet’s similarity to purchasing online. Predicting shopping behavior is generally measured by past behavior (Bellman, et al., 1999). Therefore, do individual perceptions of the Internet change as more hours are spent on the Internet?

Research Question 2:

2A — Do individuals perceive the acquiring of goods/services via the Internet to be more like acquiring goods/services by mail, phone, store, or Web television?

2B — Do individuals’ perceptions of acquiring goods/services via the Internet depend on the number of hours spent on the Internet?

Function

Keeney (1999) discusses the value of Internet commerce to the customer. He identified the fundamental objectives of Internet commerce, which include convenience, flexibility, reliability, and security. Knowing what consumer needs are being satisfied over the Internet, how do these same individuals regard Internet purchasing? Convenience and flexibility allow for the maximum convenience and flexibility when purchasing. This can be the result of minimal shopping effort and/or personal hassle, after–sales quality service and easy return policy, or possibly minimal cost and time when purchasing (Keeney, 1999). Convenience is a major reason consumers shop at Internet stores (Bellman, et al., 1999; Bhatnagar, et al., 2000). Reliability and security allow for the maximum shopping enjoyment, knowing that the purchase transaction is secure. This can be the result of minimal product purchase risk and general safety when purchasing, minimal fear of receiving a poor product, and maximum customer confidence in the purchasing process (Keeney, 1999).

The Internet allowing for convenience versus the individual’s perception of convenience of the Internet are two totally different ball games. First, how do individuals perceive the Internet? Second, does making a purchase via the Internet affect one’s perceptions? Finally, can one’s preferred purchasing outlet dictate his/her perceptions of the Internet?

Research Question 3:

3A — Do individuals perceive the acquiring of goods/services via the Internet to be convenient, flexible, reliable, and secure?

3B — Do individuals who have made a purchase via the Internet perceive the Internet as a purchasing vehicle differently than individuals who have never made a purchase via the Internet?

3C — Do individuals’ preferred purchasing outlets affect their perceptions of the Internet as a purchasing vehicle?

 

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Methodology

Sample

For this study a sample of undergraduate students from a university in the midwestern United States is used. Specifically, a questionnaire is administered to students enrolled in an undergraduate information systems course, which is required of all business majors. This group is considered to represent the views and perceptions of the largest percentage of Internet users, the 18 to 34 age group, fitting most undergraduate students.

Instrument

A 16–item questionnaire was developed to collect data with regard to the three research questions: The consumer needs being satisfied over the Internet, the contact vehicle perceptions, and the Internet’s acquisition function perceptions. In addition, six demographic items were captured to aid in the analysis.

 

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Results

Respondents

Two hundred and nine usable responses were collected from the undergraduate students. Of those respondents, 76.6 percent were between the ages of 19 and 24 and 17.2 percent between the ages of 25 and 34; 44.5 percent were male and 55.5 percent female; 83.7 percent were single; and, 88.5 percent had no children. The respondents were found to spend between 0.2 and 98 hours on the Internet per week, with the average being 14.55 hours.

Findings

Of the respondents, 81.3 percent had Internet access at home, while only 18.7 percent did not. Of those respondents, 78.5 percent had both e–mail and Web browsing capabilities. These numbers have increased significantly since the Komp and Walstrom (1998–1999) study, which indicated that only 53 percent of their respondents had Internet access at home and 42 percent had e–mail and Web browsing.

Seventy percent of the respondents have purchased a good/service from the Internet, and the preferred purchasing outlet for the respondents is a store (86 percent). Only 10.6 percent of the respondents prefer the Internet, 2.4 percent a catalog, one percent the phone, and zero percent the television.

Research Question 1: Consumer Needs

What needs are consumers attempting to satisfy over the Internet: Physical, safety, love and affiliation, prestige and esteem, and/or self–fulfillment? Table 1 identifies the items that respondents have purchased and researched over the Internet. On average, respondents purchased between two and three different items (2.25) over the Internet. Excluding respondents who had never made a purchase over the Internet, the number increases to between three and four different items (3.22). The largest number of respondents has purchased (and researched) books/magazines, airline tickets/reservations, CDs, and clothing over the Internet. Airline tickets/reservations, computer equipment, books, clothing, and software were sited by Infoworld (Battey, 2000) as being part of the top ten e–commerce items for summer 2000 which is consistent with the present study; DeCovny (1998) sites books, music, and CDs as hot Internet items; and Bhatnagar, et al. (2000) found Web services, music, and CDs to be purchased extensively. Although insurance shopping is increasing (25 percent of households with Internet access have purchased insurance online (MacSweeney, 2000)), this study’s respondents did not indicate as much. However, many of the respondents are researching insurance online.

 

Table 1: Internet purchasing and researching habits.
ItemPurchased
(n=199)
Researched
(n=208)
Books/Magazines71149
Airline Tickets/Reservations62153
CDs59140
Clothing57140
 
Software3384
Computer/Computer Equipment27102
Flowers2165
Sporting Goods1777
Toys1753
 
Cosmetic/Personal Care Products1446
Medication/Vitamins1052
Food756
Jewelry635
Car3128
 
Fitness Equipment325
Insurance237
Home046
Security System09
Other39123

 

Table 2 assesses the needs being fulfilled most frequently given the item purchased or researched. Those items most frequently purchased (and researched, with the exception of a car) represent love and affiliation fulfillment. Airline tickets/reservations, books/magazines, and CDs satisfy love and affiliation needs because they apply to the consumer’s need to belong. Clothing is a basic, physical need, but it also can be used for love and affiliation. Therefore, the respondents fulfilled (purchased) love/affiliation needs the most, followed by physical needs. The Internet was not used frequently to satisfy prestige/esteem, self–fulfillment and/or safety needs. It has been found that the likelihood of purchasing via the Internet decreases with increases in product risk (Bhatnagar, et al., 2000). Therefore, products with greater technical complexity, higher ego–related needs, perceived higher price, and greater need for “touch–and–feel” would have a decreased likelihood of being purchased via the Internet.

 

Table 2: Internet fulfilled need assessment.
 ActivityConsumer Need
ItemPurchased ResearchedPhysicalSafetyLove/AffliliationPrestige/EsteemSelf–Fulfillment
Books/Magazines71149  X  
Airline
Tickets/Reservations
62153  X  
CDs59140  X  
Clothing57140 X X  
Software3384  X  
Computer/Computer
Equipment
27102  X  
Flowers2165  X  
Sporting Goods1777   XX
Toys1753  X  
Cosmetic/Personal
Care Products
1446  X X
Medication/Vitamins1052 X   
Food756X    
Jewelry63   X 
Car3128   X 
Fitness Equipment325    X
Insurance237 X   
Home046X  X 
Security System09 X    

 

Does the number of items researched/purchased depend on the time spent on the Internet by the individual? Table 3 identifies the significant differences between those individuals who spend “X” hours per week on the Internet on the number of different goods/services they have researched or purchased. Individuals who spend eight or more but less than 15 hours per week on the Internet research and purchase more items than those who spend less than four hours per week and those who spend four or more but less than eight hours per week. Individuals who spend 15 hours per week or more on the Internet research and purchase more items than those who spend less than four hours per week, those who spend four or more but less than eight hours per week, and those who spend eight or more but less than 15 hours per week. Of significant importance is the fact that when the hours spent on the Internet being compared is small (less than four and four or more but less than eight), there is no significant difference between the number of researched or purchased goods/services. As the respondents spent more time on the Internet, they were found to research and purchase more items, but if they spent fewer hours, there was no difference in the number of items researched and/or purchased. As consumers become more knowledgeable about Internet purchasing and their Internet experience increases, their perception of risk decreases and they purchase and research more (Bhatnagar, et al., 2000).

Does the gender of the individual determine the number of goods or services researched/purchased? Table 4 shows the significant gender differences for the number of items researched or purchased. Men research and purchase more goods/services over the Internet than women. This could be given the nature of the goods/services purchased. Traditionally, men buy hardware, software, and electronics (i.e., love/affiliation needs), where as women buy food, beverages, and clothing (i.e., physical needs) (Bhatnagar, et al., 2000).

 

Table 3: Items researched and purchased by time spent on the Internet.
Notes: *P<0.10, **P<0.05, ***P<0.01
Mean scores represent the average number of items researched or purchased.
Question:Time in hours per week
Number of items: n=51
<4
n=47
≥4
and
<8
P–value n=51
<4
n=55
≥8
and
<15
P–value n=51
<4
n=56
≥15
P–value n=47
≥4
and
<8
n=55
≥8
and
<15
P–value n=47
≥4
and
<8
n=56
≥15
P–value n=55
≥8
and
<15
n=56
≥15
P–value
Researched 6.165.83 .54106.167.69 .0185**6.169.09.0002***5.837.69.0028***5.839.09.0000***7.699.09.0811*
Purchased 1.681.45.52881.682.41.0674* 1.683.28.0012***1.452.41.0174**1.453.28.0004***2.413.28.0876*

 

 

Table 4: Items researched and purchased by gender.
Notes: *P<0.10, **P<0.05, ***P<0.01
Mean scores represent the average number of items researched or purchased.
Question:
Number of items:
Male
n=93
Female
n=116
P–value
Researched8.196.53.0014***
Purchased2.731.86.0082***

 

Research Question 2: Contact Vehicle

Do individuals perceive the acquiring of goods/services via the Internet to be more like acquiring goods/services by mail, phone, store, or Web television? Table 5 shows that the respondents consider purchasing over the Internet to be most like purchasing using Web television. The respondents also consider purchasing over the Internet to be similar to purchasing using the phone and the mail service, but they consider purchasing over the Internet to be least similar to purchasing from a store.

 

Table 5: Internet purchasing perceptions as a contact vehicle.
Internet Purchasing PerceptionsMeanStandard Deviation
Acquiring goods/services over the Internet is similar to acquiring goods/services using Web television.5.001.47
Acquiring goods/services over the Internet is similar to acquiring goods/services using the phone.4.901.55
Acquiring goods/services over the Internet is similar to acquiring goods/services using the mail service.4.851.64
Acquiring goods/services over the Internet is similar to acquiring goods/services from a store..3.21 1.85

 

Do individuals’ perceptions of acquiring goods/services via the Internet depend on the number of hours spent on the Internet? Table 6 displays the significant differences between individuals who spend “X” hours per week on the Internet on his/her purchasing perceptions. This table shows that individuals who spend around the average (14.55) number of hours per week on the Internet perceive the Internet to be more similar to purchasing from a store than do those who spend less than the average. Specifically, individuals who spend 15 or more hours per week on the Internet perceive the Internet to be more similar to purchasing from a store than do individuals who spend less than four hours per week and those who spend four or more but less than eight hours per week. Also, individuals who spend eight or more but less than 15 hours per week on the Internet perceive the Internet to be more similar to purchasing from a store than do individuals who spend less than four hours per week.

 

Table 6: Internet purchasing perceptions by time spent on the Internet.
Notes: *P<0.10, **P<0.05, ***P<0.01
Mean scores represent the average measured on a seven–point self–anchoring scale (interval scale 1–7; 1=Strongly Disagree and 7=Strongly Agree)
Question:Time in hours per week
Acquiring goods/services over
the Internet is similar to
acquiring goods/services:
n=51
<4
n=47
≥4
and
<8
P–value n=51
<4
n=55
≥8
and
<15
P–value n=51
<4
n=55
≥15
P–value n=47
≥4
and
<8
n=53
≥8
and
<15
P–value n=47
≥4
and
<8
n=55
≥15
P–value n=53
≥8
and
<15
n=55
≥15
P–value
Using the mail service4.904.96.86544.905.00.74244.904.56.32194.965.00.88954.964.56.26405.004.56.1774
Using the phone5.105.00.75085.104.69.19955.104.85.42225.004.69.31095.004.85.61684.694.85.5765
From a store2.603.09.1409 2.603.28.0466** 2.603.79.0009*** 3.093.28.59073.093.79.0640* 3.283.79.1853
Using Web television4.865.25.21444.865.00.64614.864.92.83145.255.00.43365.254.92.30355.004.92.8033

 

Research Question 3: Function

Do individuals perceive the acquiring of goods/services via the Internet to be convenient, flexible, reliable, and secure? Table 7 shows that the respondents consider the Internet to be more convenient and flexible than the phone, a store, the mail service, or Web television, but less reliable and secure than the phone, a store, and the mail service.

 

Table 7: Internet function perceptions.
Purchasing outlet perceptionsMeanStandard
Deviation
Convenience  
Using the Internet to acquire goods/services is convenient.6.111.10
Using the phone to acquire goods/services is convenient.5.501.35
Using a store to acquire goods/services is convenient.4.881.50
Using Web television to acquire goods/services is convenient.4.801.52
Using the mail service to acquire goods/services is convenient.4.721.59
Flexibility 
Using the Internet to acquire goods/services is flexible.5.631.28
Using a store to acquire goods/services is flexible.5.371.46
Using the phone to acquire goods/services is flexible.5.081.42
Using Web television to acquire goods/services is flexible.4.481.44
Using the mail service to acquire goods/services is flexible.4.341.51
Reliability 
Using a store to acquire goods/services is reliable.5.371.46
Using the phone to acquire goods/services is reliable.5.081.42
Using the mail service to acquire goods/services is reliable.4.811.32
Using the Internet to acquire goods/services is reliable.4.691.26
Using Web television to acquire goods/services is reliable.4.091.32
Security 
Using a store to acquire goods/services is secure.6.460.85
Using the mail service to acquire goods/services is secure.4.751.36
Using the phone to acquire goods/services is secure.4.451.52
Using the Internet to acquire goods/services is secure.4.181.50
Using Web television to acquire goods/services is secure.3.881.36

 

The respondents were also asked about their purchasing concerns over the Internet. The most indicated reason/concern for not purchasing via the Internet was security of credit card numbers, which is consistent with their perceptions of the reliability and security of the Internet as a purchasing vehicle. Table 8 summarizes the respondents’ purchasing concerns over the Internet. Only six respondents had no concerns when considering making a purchase via the Internet. These findings are consistent with many studies that have indicated credit card security, buying without touching or feeling the item, being unable to return the item, and privacy (security) of personal information as still being concerns for Internet consumers (Bellman, et al., 1999; Bhatnagar, 2000; Direct Marketing, 2001; Lach, 2000). Any uncertainty regarding the online purchasing process will impact the consumer’s risk beliefs (Bhatnagar, et al., 2000).

 

Table 8: Internet purchasing perceptions.
Purchasing ConcernUsers
(n=209)
Security of credit card numbers169
Security of personal information155
Having your name sold to other companies141
 
Receiving bad products108
Losing your money80
Reliability74
 
Timeliness55
Flexibility20
Inconvenience18
 
Other19
No Concerns6

 

Do individuals who have made a purchase via the Internet perceive the Internet as a purchasing vehicle differently than individuals who have never made a purchase via the Internet? Table 9 presents the significant differences between individuals who have and have not purchased goods/services over the Internet. Individuals who have made a purchase over the Internet perceive the Internet to be more convenient, flexible, reliable and secure, Web television to be more secure, and the phone to be more secure than individuals who have not made a purchase over the Internet. Individuals who have not made a purchase over the Internet perceive the mail service to be more convenient and a store to be more convenient and flexible than individuals who have made a purchase over the Internet.

Do individuals’ preferred purchasing outlets affect their perceptions of the Internet as a purchasing vehicle? Table 10 details the significant differences between individuals who prefer purchasing from a store and individuals who prefer another purchasing outlet. Individuals who prefer a purchasing outlet other than a store perceive the Internet to be more convenient, flexible, reliable and secure and Web television to be more reliable and secure than individuals who prefer purchasing from a store. Individuals who prefer purchasing from a store perceive a store to be more convenient, flexible, and secure than individuals who prefer another purchasing outlet.

 

Table 9: Internet function perceptions based on Internet purchasing.
Notes: *P<0.10, **P<0.05, ***P<0.01
Mean scores represent the average measured on a seven–point self–anchoring scale (interval scale 1–7;
1=Strongly Disagree and 7=Strongly Agree)
 Internet purchase
QuestionHave
purchased

n=139
Have not
purchased

n=59
P–value
Internet 
Using the Internet to acquire goods/services is convenient.6.265.80.0066***
Using the Internet to acquire goods/services is flexible.5.785.36.0299**
Using the Internet to acquire goods/services is reliable.4.964.17.0000***
Using the Internet to acquire goods/services is secure.4.603.41.0000***
Mail service 
Using the mail service to acquire goods/services is convenient.4.545.10.0241**
Using the mail service to acquire goods/services is flexible.4.274.46 .4329
Using the mail service to acquire goods/services is reliable.4.754.92 .4276
Using the mail service to acquire goods/services is secure.4.854.54 .1509
Phone 
Using the phone to acquire goods/services is convenient.5.475.47.9866
Using the phone to acquire goods/services is flexible.5.025.14.6071
Using the phone to acquire goods/services is reliable.4.984.78.4588
Using the phone to acquire goods/services is secure.4.584.17.0793*
Store 
Using a store to acquire goods/services is convenient.4.755.14.0909*
Using a store to acquire goods/services is flexible.5.225.64 .0682*
Using a store to acquire goods/services is reliable.6.376.47.4582
Using a store to acquire goods/services is secure.6.506.49.9459
Web television 
Using Web television to acquire goods/services is convenient.4.884.66.3890
Using Web television to acquire goods/services is flexible.4.494.47 .9347
Using Web television to acquire goods/services is reliable.4.124.04.6981
Using Web television to acquire goods/services is secure. 4.093.58 .0243**

 

 

Table 10: Internet function perceptions based on preferred outlet.
Notes: *P<0.10, **P<0.05, ***P<0.01
Mean scores represent the average measured on a seven–point self–anchoring scale (interval scale 1–7;
1=Strongly Disagree and 7=Strongly Agree)
 Preferred outlet
QuestionStore
n=177
Other
n=29
P–value
Internet 
Using the Internet to acquire goods/services is convenient.6.036.55.0193**
Using the Internet to acquire goods/services is flexible.5.506.41.0003***
Using the Internet to acquire goods/services is reliable.4.575.31.0030***
Using the Internet to acquire goods/services is secure.4.034.93.0026***
Mail service 
Using the mail service to acquire goods/services is convenient.4.744.70.9221
Using the mail service to acquire goods/services is flexible.4.364.37.9631
Using the mail service to acquire goods/services is reliable.4.775.19.1256
Using the mail service to acquire goods/services is secure.4.705.15.1113
Phone 
Using the phone to acquire goods/services is convenient.5.555.25.2705
Using the phone to acquire goods/services is flexible.5.124.89.4306
Using the phone to acquire goods/services is reliable.4.885.11.4173
Using the phone to acquire goods/services is secure.4.434.57.6440
Store 
Using a store to acquire goods/services is convenient.5.014.04.0014***
Using a store to acquire goods/services is flexible.5.474.75.0147**
Using a store to acquire goods/services is reliable.6.436.21.2437
Using a store to acquire goods/services is secure.6.516.14.0338**
Web television 
Using Web television to acquire goods/services is convenient.4.765.05.4091
Using Web television to acquire goods/services is flexible.4.464.68.4978
Using Web television to acquire goods/services is reliable.3.974.82.0047***
Using Web television to acquire goods/services is secure.3.764.68.0027***

 

 

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Discussion

Purchasing goods/services via the Internet is becoming more commonplace. Seventy percent of the respondents have purchased at least one item via the Internet, with the majority of purchases related to the love and affiliation need. Currently, individuals are focused less on physical, basic human needs and safety needs and more on their need for a sense of belonging. Consumers hold strong prior beliefs about what prices should be in categories for which they have limited knowledge (Shirai and Meyer, 1997). Consumers are more knowledgeable about love/affiliation items as compared to prestige/esteem and/or self–fulfillment items, and therefore are more willing to make purchases in the love/affiliation group via the Internet. Prestige and esteem needs and self–fulfillment needs represent more risky, expensive items and therefore are least likely to be purchased over the Internet. Physical needs, such as food, are also considered high risk because of an individual’s need to touch–and–feel (Bhatnagar, et al., 2000). Prestige and esteem needs and self–fulfillment needs are researched frequently via the Internet however because time spent researching the best shopping deals depends on individual need and cost structure (Vakratsas, 1998).

It also appears that physical needs are beginning to be met using the Internet, but currently individuals are inclined to purchase these items using a different medium. This may be a result of the gender that purchases less from the Internet — female. Physical needs such as grocery items are primarily purchased using a shopping list (Block and Morwitz, 1999). Therefore, shopping lists serve as an external memory storage device for grocery purchasing. Web sites are beginning to incorporate list–making capabilities, but consumers are more comfortable with their traditional paper–and–pencil purchasing lists.

As more hours are spent on the Internet, individuals do begin to purchase and research more goods/services. It is presumed that as the number of Internet users increases and the number of Internet users who have purchased from the Internet increases, more Internet purchases will be made.

Individuals perceive purchasing over the Internet to be least like purchasing from a store. This seems to be the nature of store purchasing, touch–and–feel contact as opposed to video enhanced pictures of products (on the Internet). However, depending on the number of hours spent on the Internet per week, individuals who spent more hours perceived the Internet to be more like purchasing from a store. This is the result of time on the Internet and possibly the increased number of purchases made by those individuals who spend more time on the Internet. Therefore, one would anticipate that as individuals spend more time on the Internet and become more comfortable with purchasing using that medium, the Internet will be perceived to be more like a store.

Respondents reported that they perceive the Internet to be the most convenient and flexible of all purchasing vehicles, but a store to be the most reliable and secure. This indicates that individuals can see the inherit benefits of Internet transactions, but they still have concerns (and often the risk outweighs the benefits (Bhatnagar, et al., 2000)). This is especially apparent since only six of the 209 respondents had no concerns with Internet purchasing, yet 70 percent of those respondents had made a purchase over the Internet. Inevitably, individuals who have purchased goods/services over the Internet perceive the Internet to be more convenient, flexible, reliable, and secure than individuals who have not made a purchase. This finding leads one to believe again that the use of the purchasing vehicle leads to improved perceptions of it as a purchasing medium. Also, individuals who prefer purchasing from an outlet other than a store perceive the Internet to be more convenient, flexible, reliable, and secure. Again, becoming comfortable with the outlet leads to improved perceptions. Therefore, as the Internet evolves and more individuals make purchases, perceptions will also improve as they have for other outlets (i.e., telephone shopping; Bhatnagar, et al., 2000).

A comparison of this study’s sample was made with the findings of a study by Bellman, et al. (1999). Based on this comparison, findings from this study may be slightly more advanced than the overall population because this study found more respondents who had actually purchased goods and services over the Internet than Bellman, et al.. However, given our later study time period (2000–2001), there would be an expected increase in Internet users (Laudon and Traver, 2002) since Bellman, et al.. Table 11 summarizes the chi–square test results.

 

Table 11: Chi–square goodness of fit test.
 This studyBellman, et al. (1999)Expected(Observed2/Expected)
Have purchased via the Internet13957%113171
Have not purchased via the Internet5943%8541
Total198100% 198212
-198=14

 

There are a few limitations to this study. First, the generalizability of the sample cannot be made across all demographic groups. This study does focus on the age group of the largest number of Internet users, but it does not represent all age groups or other demographic groups. Second, with the changing nature and fast pace of the Internet, many of the presented findings may adjust monthly, weekly, or even daily. It would be impossible to present Internet shopping behavior that is not already “out–of–date.” Finally, the classification of goods/services into the consumer needs’ categories could, and probably does, depend on the individual (refer to Table 2). The Table is meant to help clarify in which category most purchased or researched goods/services would fall (i.e., love and affiliation category) and is not meant to represent the views of the respondents as to which category they would place the item.

 

++++++++++

Conclusion

Purchasing over the Internet is becoming more common. In general, the largest number of items being purchased via the Internet is to fill love and affiliation needs with physical needs/items also being purchased frequently. The Internet is considered to be more convenient and flexible but less reliable and secure. Finally, the Internet is perceived to be least similar to purchasing from a store.

Overall, it appears that more consumers are beginning to make purchases over the Internet. However, the consumer concerns when purchasing over the Internet must be alleviated so that consumers will continue to make purchases using this medium and become more comfortable with the reliability and security of Internet transactions. Also, if “touch–and–feel” can be incorporated or design changed so that consumers feel more like they are shopping in a store, then Internet purchases should increase. More attention must be given to Web page design and functionality, specifically focusing on meeting the wants of consumers. For those categories of products that are not currently purchased or are purchased less than desired by an organization, organizations must not only dedicate time to improving Web design but also to targeting representative groups for the products. For example, women have been shown to purchase less frequently than men from the Internet and to be the primary purchasers of physical items from stores. Therefore, if an organization wishes to improve its online grocery sales, it must not only target women but also give them a reason to purchase online in the first place. Over time, these targeted individuals should become more comfortable with Internet purchasing and begin purchasing more from that medium.

Future research should seek to further explore the changing dynamics of the Internet as more individuals begin surfing and purchasing on the Web. Specifically, individuals should be asked to classify goods/services into the consumer needs’; categories in order to capture consumer perceptions of the need(s) they are fulfilling. A more in–depth analysis should be done on Internet demographics versus non–Internet demographics. Age, income, and education, as well as gender, should be considered when determining why individuals do or do not purchase goods and/or services online (Bellman, et al., 1999; Chiger, 2001; d’Astous, 2000). Finally, consumer attraction to Web sites should be assessed. Prior to a purchase, why does a consumer visit a Web site (i.e., brand; advertising; etc.)? What design or navigational issues should be addressed based on product, consumer gender, etc.? End of article

 

About the author

Lori N.K. Leonard is an Assistant Professor of Management Information Systems at the University of Tulsa. Dr. Leonard received her Ph.D. from the University of Arkansas and is an active member of the Decision Sciences Institute and the Association for Information Systems. Her research interests include electronic commerce, electronic data interchange, ethics in computing, simulation, and data warehousing. Her publications have appeared in Journal of Computer Information Systems, Information & Management, Journal of the Association for Information Systems, Journal of Organizational Computing and Electronic Commerce, as well as in other journals, and the proceedings of various conferences.
E–mail: lori-leonard [at] utulsa [dot] edu

 

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Editorial history

Paper received 27 March 2003; accepted 27 October 2003.


Copyright © 2003, First Monday.

Copyright © 2003, Lori N.K. Leonard.

Acquiring goods and services via the Internet: Consumer shopping perceptions
by Lori N.K. Leonard.
First Monday, Volume 8, Number 11 - 3 November 2003
http://www.firstmonday.dk/ojs/index.php/fm/article/view/1098/1018





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