Online shop
Encyclopedia
Online shopping is the process whereby consumers directly buy goods or services from a seller in real-time, without an intermediary service, over the Internet
. It is a form of electronic commerce
. An online shop, eshop, e-store, Internet shop, webshop, webstore
, online store, or virtual store evokes the physical analogy of buying product
s or services at a bricks-and-mortar retailer
or in a shopping centre. The process is called business-to-consumer (B2C) online shopping. When a business buys from another business it is called business-to-business (B2B) online shopping.
created the first World Wide Web server and browser. It opened for commercial use in 1991 . In 1994 other advances took place, such as online banking and the opening of an online pizza shop by Pizza Hut
. During that same year, Netscape
introduced SSL encryption of data transferred online, which has become essential for secure online shopping. Also in 1994 the German company Intershop
introduced its first online shopping system. In 1995 Amazon
launched its online shopping site, and in 1996 eBay
appeared.
or debit card
. Shopping has evolved with the growth of technology. According to research found in the Journal of Electronic Commerce, if one focuses on the demographic characteristics of the in-home shopper, in general, the higher the level of education, income, and occupation of the head of the household, the more favorable the perception of non-store shopping., Enrique.(2005) The Impact of Internet User Shopping Patterns and Demographics on Consumer Mobile Buying Behavior. Journal of Electronic Commerce Research, An influential factor in consumer attitude towards non-store shopping is exposure to technology, since it has been demonstrated that increased exposure to technology increases the probability of developing favorable attitudes towards new shopping channels.
Once a particular product has been found on the web site of the seller, most online retailers use shopping cart software
to allow the consumer to accumulate multiple items and to adjust quantities, by analogy with filling a physical shopping cart or basket in a conventional store. A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information is collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this information only needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete. Less sophisticated stores may rely on consumers to phone or e-mail their orders (though credit card numbers are not accepted by e-mail, for security reasons).
to make payments, however some systems enable users to create accounts and pay by alternative means, such as:
Some sites will not accept international credit cards, some require both the purchaser's billing address and shipping address to be in the same country in which site does its business, and still other sites allow customers from anywhere to send gifts anywhere. The financial part of a transaction might be processed in real time (for example, letting the consumer know their credit card was declined before they log off), or might be done later as part of the fulfillment process.
Two major sub-dimensions have been identified for information load: complexity and novelty. Complexity refers to the number of different elements or features of a site, which can be the result of increased information diversity. Novelty involves the unexpected, suppressing, new, or unfamiliar aspects of the site. A research by Huang (2000) showed that the novelty dimension kept consumers exploring the shopping sites, whereas the complexity dimension has the potential to induce impulse purchases.
is not just in having a good looking website
that could be listed in a lot of search engines or the art behind the site. It also is not only just about disseminating information, because it is also about building relationships and making money. Mostly, organizations try to adopt techniques of online shopping without understanding these techniques and/or without a sound business model. Rather than supporting the organization's culture and brand name, the website should satisfy consumer's expectations. A majority of consumers choose online shopping for a faster and more efficient shopping experience. Many researchers notify that the uniqueness of the web has dissolved and the need for the design, which will be user centered, is very important. Companies should always remember that there are certain things, such as understanding the customer's wants and needs, living up to promises, never go out of style, because they give reason to come back. And the reason will stay if consumers always get what they expect. McDonaldization
theory can be used in terms of online shopping, because online shopping is becoming more and more popular and a website that wants to gain more shoppers will use four major principles of McDonaldization: efficiency, calculability, predictability and control.
Organizations, which want people to shop more online with them, should consume extensive amounts of time and money to define, design, develop, test, implement, and maintain the website. Also if a company wants their website to be popular among online shoppers it should leave the user with a positive impression about the organization, so consumers can get an impression that the company cares about them. The organization that wants to be accepted in online shopping needs to remember, that it is easier to lose a customer then to gain one. Lots of researchers state that even when a site was "top-rated", it would go nowhere if the organization failed to live up to common etiquette, such as returning e-mails in a timely fashion, notifying customers of problems, being honest, and being good stewards of the customers' data. Organizations that want to keep their customers or gain new ones should try to get rid of all mistakes and be more appealing to be more desirable for online shoppers. And this is why many designers of webshops consider research outcomes concerning consumer expectations. Research conducted by Elliot and Fowell (2000) revealed satisfactory and unsatisfactory customer experiences.
There are several techniques for the inspection of the usability
. The ones used in the research of Chen & Macredie (2005) are Heuristic evaluation, cognitive walk through and the user testing. Every technique has its own (dis-)advantages and it is therefore important to check per situation which technique is appropriate.
When the customers went to the online shop, a couple of factors determine whether they will return to the site. The most important factors are the ease of use and the presence of user-friendly features.
estimates that the United States online retail industry will be worth $279 billion in 2015.
For developing countries and low-income households in developed countries, adoption of e-commerce in place of or in addition to conventional methods is limited by a lack of affordable Internet access.
In the event of a problem with the item—it is not what the consumer ordered, or it is not what they expected—consumers are concerned with the ease with which they can return an item for the correct one or for a refund. Consumers may need to contact the retailer, visit the post office and pay return shipping, and then wait for a replacement or refund. Some online companies have more generous return policies to compensate for the traditional advantage of physical stores. For example, the online shoe retailer Zappos.com
includes labels for free return shipping, and does not charge a restocking fee, even for returns which are not the result of merchant error. (Note: In the United Kingdom, online shops are prohibited from charging a restocking fee if the consumer cancels their order in accordance with the Consumer Protection (Distance Selling) Act 2000.)
Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which product to buy.
Some stores even allow customers to comment or rate their items. There are also dedicated review site
s that host user reviews for different products. Reviews and now blogs gives customers the option of shopping cheaper org anise purchases from all over the world without having to depend on local retailers.
In a conventional retail store, clerks are generally available to answer questions. Some online stores have real-time chat features, but most rely on e-mail or phone calls to handle customer questions.
engines do exist to help consumers locate products for sale in nearby stores). Search engines, online price comparison service
s and discovery shopping
engines can be used to look up sellers of a particular product or service.
Shipping costs (if applicable) reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax
may compensate for this.
Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments bricks-and-mortar retailers order. Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently large orders.
Another major advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users' shopping experience..
Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the merchant. Identity theft
is still a concern for consumers when hackers break into a merchant's web site and steal names, addresses and credit card numbers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to require disclosure to consumers when this happens. Computer security has thus become a major concern for merchants and e-commerce service providers, who deploy countermeasures such as firewalls and anti-virus software to protect their networks.
Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the company issuing the seal. The purpose of these seals is to increase the confidence of the online shoppers; the existence of many different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent.
A number of resources offer advice on how consumers can protect themselves when using online retailer services. These include:
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems that shoppers potentially face include identity theft, faulty products, and the accumulation of spyware
. Whenever you purchase a product, you are going to be required to put in your credit card information and billing/shipping address. If the website is not secure a customers information can be accessible to anyone who knows how to obtain it. Most large online corporations are inventing new ways to make fraud
more difficult, however, the criminals are constantly responding to these developments with new ways to manipulate the system. Even though these efforts are making it easier to protect yourself online, it is a constant fight to maintain the lead. It is advisable to be aware of the most current technology and scams out there to fully protect yourself and your finances.[20].
One of the hardest areas to deal with in online shopping is the delivery of the products. Most companies offer shipping insurance in case the product is lost or damaged; however, if the buyer opts not to purchase insurance on their products, they are generally out of luck. Some shipping companies will offer refunds or compensation for the damage, but it is up to their discretion if this will happen. It is important to realize that once the product leaves the hands of the seller, they have no responsibility (provided the product is what the buyer ordered and is in the specified condition).[20].
attempts to include estimates of these additional cost, but nevertheless, the lack of general full cost disclosure remains a concern.
Many websites keep track of consumers shopping habits in order to suggest items and other websites to view. Brick-and-mortar stores also collect consumer information. Some ask for address and phone number at checkout, though consumers may refuse to provide it. Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a catalog mailing list. This information is obviously not accessible to the merchant when paying in cash.
techniques to facilitate transactions of tangible goods without maintaining real inventory.
Some non-digital products have been more successful than others for online stores. Profitable items often have a high value-to-weight ratio, they may involve embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers. Items which can fit in a standard mailbox—such as music CDs, DVDs and books—are particularly suitable for a virtual marketer.
Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets—in such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number.
Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings—most notably clothing—and products where colour integrity appears important. Nonetheless, Tesco.com
has had success delivering groceries in the UK
, albeit that many of its goods are of a generic quality, and clothing sold through the internet is big business in the U.S.
, Amazon.com
and eBay
, offer hosting services for online stores to all size retailers. These stores are presented within an integrated navigation framework. Collections of online stores are sometimes known as virtual shopping malls or online marketplace
s.
The Nielsen Company conducted a survey in March 2010 and polled more than 27,000 Internet
users in 55 markets from the Asia-Pacific, Europe, Middle East, North America and South America to look at questions such as "How do consumers shop online?", "What do they intend to buy?", "How do they use various online shopping web pages?", and the impact of social media
and other factors that come into play when consumers are trying to decide how to spend their money on which product or service.
According to that research, reviews on electronics (57%) such as DVD players, cell phones or PlayStations and so on, reviews on cars (45%), and reviews on software (37%) play an important role and have influence on consumers who tend to make purchases and buy online.
In addition to online reviews, peer recommendations on the online shopping pages or social media play a key role for online shoppers while researching future purchases of electronics, cars and travel or concert bookings. On the other hand, according to the same research, 40% of online shoppers indicate that they would not even buy electronics without consulting online reviews first.
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
. It is a form of electronic commerce
Electronic commerce
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
. An online shop, eshop, e-store, Internet shop, webshop, webstore
Webstore
A webstore is a website that sells products or services and typically has an online shopping cart associated with it. With the popularity of the Internet rapidly increasing, online shopping became advantageous for retail store owners, and many traditional “brick and mortar” stores saw value in...
, online store, or virtual store evokes the physical analogy of buying product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
s or services at a bricks-and-mortar retailer
Retailing
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
or in a shopping centre. The process is called business-to-consumer (B2C) online shopping. When a business buys from another business it is called business-to-business (B2B) online shopping.
History
In 1990 Tim Berners-LeeTim Berners-Lee
Sir Timothy John "Tim" Berners-Lee, , also known as "TimBL", is a British computer scientist, MIT professor and the inventor of the World Wide Web...
created the first World Wide Web server and browser. It opened for commercial use in 1991 . In 1994 other advances took place, such as online banking and the opening of an online pizza shop by Pizza Hut
Pizza Hut
Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo wings, breadsticks, and garlic bread....
. During that same year, Netscape
Netscape
Netscape Communications is a US computer services company, best known for Netscape Navigator, its web browser. When it was an independent company, its headquarters were in Mountain View, California...
introduced SSL encryption of data transferred online, which has become essential for secure online shopping. Also in 1994 the German company Intershop
Intershop Communications
Intershop Communications is a provider of global E-Commerce solutions to high-end large-sized companies. Intershop’s Enfinity Suite 6 is an E-Commerce Software Platform providing a single solution handling the consumer, business, partner, content, supplier and procurement channels for internet...
introduced its first online shopping system. In 1995 Amazon
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
launched its online shopping site, and in 1996 eBay
EBay
eBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...
appeared.
Customers
In recent years, online shopping has become popular. In order to shop online, you must have access to a computer as well as a credit cardCredit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
or debit card
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
. Shopping has evolved with the growth of technology. According to research found in the Journal of Electronic Commerce, if one focuses on the demographic characteristics of the in-home shopper, in general, the higher the level of education, income, and occupation of the head of the household, the more favorable the perception of non-store shopping., Enrique.(2005) The Impact of Internet User Shopping Patterns and Demographics on Consumer Mobile Buying Behavior. Journal of Electronic Commerce Research, An influential factor in consumer attitude towards non-store shopping is exposure to technology, since it has been demonstrated that increased exposure to technology increases the probability of developing favorable attitudes towards new shopping channels.
Logistics
Consumers find a product of interest by visiting the website of the retailer directly, or do a search across many different vendors using a shopping search engine.Once a particular product has been found on the web site of the seller, most online retailers use shopping cart software
Shopping cart software
Shopping cart software is software used in e-commerce to assist people making purchases online, analogous to the American English term 'shopping cart'...
to allow the consumer to accumulate multiple items and to adjust quantities, by analogy with filling a physical shopping cart or basket in a conventional store. A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information is collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this information only needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete. Less sophisticated stores may rely on consumers to phone or e-mail their orders (though credit card numbers are not accepted by e-mail, for security reasons).
Payment
Online shoppers commonly use a credit cardCredit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
to make payments, however some systems enable users to create accounts and pay by alternative means, such as:
- Billing to mobile phones and landlineLandlineA landline was originally an overland telegraph wire, as opposed to an undersea cable. Currently, landline refers to a telephone line which travels through a solid medium, either metal wire or optical fibre, as distinguished from a mobile cellular line, where transmission is via radio waves...
s - Cash on deliveryCash on deliveryCollect on delivery is a financial transaction where the payment of products and/or services received is done at the time of actual delivery rather than paid-for in advance...
(C.O.D., offered by very few online stores) - ChequeChequeA cheque is a document/instrument See the negotiable cow—itself a fictional story—for discussions of cheques written on unusual surfaces. that orders a payment of money from a bank account...
- Debit cardDebit cardA debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
- Direct debit in some countries
- Electronic moneyElectronic moneyElectronic money is money or scrip that is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems...
of various types - Gift cardGift cardA gift card is a restricted monetary equivalent or scrip that is issued byretailers or banks to be used as an alternative to a non-monetary gift....
s - Postal money orderMoney orderA money order is a payment order for a pre-specified amount of money. Because it is required that the funds be prepaid for the amount shown on it, it is a more trusted method of payment than a cheque.-History of money orders:...
- Wire transferWire transferWire transfer or credit transfer is a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office...
/delivery on payment
Some sites will not accept international credit cards, some require both the purchaser's billing address and shipping address to be in the same country in which site does its business, and still other sites allow customers from anywhere to send gifts anywhere. The financial part of a transaction might be processed in real time (for example, letting the consumer know their credit card was declined before they log off), or might be done later as part of the fulfillment process.
Product delivery
Once a payment has been accepted the goods or services can be delivered in the following ways.- Downloading: This is the method often used for digital media products such as software, music, movies, or images.
- Drop shipping: The order is passed to the manufacturer or third-party distributor, who ships the item directly to the consumer, bypassing the retailer's physical location to save time, money, and space.
- In-store pickupRetailingRetail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
: The customer orders online, finds a local store using locator software and picks the product up at the closest store. This is the method often used in the bricks and clicksBricks and clicksBricks and clicks is a business model by which a company integrates both offline and online presences, sometimes with the third extra flips...
business model. - PrintingPrintingPrinting is a process for reproducing text and image, typically with ink on paper using a printing press. It is often carried out as a large-scale industrial process, and is an essential part of publishing and transaction printing....
out, provision of a code for, or emailEmailElectronic mail, commonly known as email or e-mail, is a method of exchanging digital messages from an author to one or more recipients. Modern email operates across the Internet or other computer networks. Some early email systems required that the author and the recipient both be online at the...
ing of such items as admission ticketTicket (admission)A ticket is a voucher that indicates that one has paid for admission to an event or establishment such as a theatre, movie theater, amusement park, zoo, museum, concert, or other attraction, or permission to travel on a vehicle such as an airliner, train, bus, or boat, typically because one has...
s and scripScripScrip is an American term for any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns, military bases, ships on long...
(e.g., gift certificates and coupons). The tickets, codes, or coupons may be redeemed at the appropriate physical or online premises and their content reviewed to verify their eligility (e.g., assurances that the right of admission or use is redeemed at the correct time and place, for the correct dollar amount, and for the correct number of uses). - ShippingShippingShipping has multiple meanings. It can be a physical process of transporting commodities and merchandise goods and cargo, by land, air, and sea. It also can describe the movement of objects by ship.Land or "ground" shipping can be by train or by truck...
: The product is shipped to the customer's address or that of a customer-designated third party. - Will callWill callWill call is a North American term for a box office where patrons of entertainment venues go to pick up pre-purchased tickets for an event, such as a play or concert, either just before the event, or in advance. With the onset of the Internet and e-commerce sites, which allow customers to buy...
, COBO (in Care Of Box Office), or "at the door" pickup: The patron picks up pre-purchased tickets for an event, such as a play, sporting event, or concert, either just before the event or in advance. With the onset of the Internet and e-commerce sites, which allow customers to buy tickets online, the popularity of this service has increased.
Shopping cart systems
- Simple systems allow the offline administration of products and categories. The shop is then generated as HTML files and graphics that can be uploaded to a webspace. These systems do not use an online database.
- A high end solution can be bought or rented as a standalone program or as an addition to an enterprise resource planningEnterprise resource planningEnterprise resource planning systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application...
program. It is usually installed on the company's own webserver and may integrate into the existing supply chainSupply chainA supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
so that ordering, payment, delivery, accounting and warehousing can be automated to a large extent. - Other solutions allow the user to register and create an online shop on a portalWeb portalA web portal or links page is a web site that functions as a point of access to information in the World Wide Web. A portal presents information from diverse sources in a unified way....
that hosts multiple shops at the same time. - Open sourceOpen sourceThe term open source describes practices in production and development that promote access to the end product's source materials. Some consider open source a philosophy, others consider it a pragmatic methodology...
shopping cart packages include advanced platforms such as InterchangeInterchange (software)Interchange is a free and open source e-commerce web application server and platform written in Perl. Its primary use is building customized e-commerce and catalog solutions....
, and off the shelf solutions as AvactisAvactisAvactis is a open source ecommerce software solution .Avactis Shopping Cart has several different editions: Avactis Free, Avactis Owned, Avactis Lite, Avactis Premium, Monthly leased license and Avactis White Label edition....
, SatchmoSatchmo (online store)Satchmo is an open source online store management system using the Django web application framework. It was initially designed as a Python based project in order to avoid some of the perceived common pitfalls and shortcomings of similar PHP based projects. The Django framework was chosen as a...
, osCommerceOsCommerceosCommerce is an e-commerce and online store-management software program. It can be used on any web server that has PHP and MySQL installed. It is available as free software under the GNU General Public License.-History:...
, MagentoMagentoMagento is an open source based ecommerce web application that was launched on March 31, 2008. It was developed by Varien with help from the programmers within the open source community but is owned solely by . Magento was built using the Zend Framework...
, Zen CartZen CartZen Cart is an online store management system. It is PHP-based, using a MySQL database and HTML components. Support is provided for numerous languages and currencies, and it is freely available under the GNU General Public License....
, VirtueMartVirtueMartVirtueMart is an open source e-commerce solution designed as an extension of the Mambo or Joomla! content management systems . VirtueMart is written in PHP and requires the MySQL database environment for storage...
, Batavi and PrestaShopPrestaShopPrestaShop is an e-commerce solution which is free for the basic kernel and open source. It supports payment gateways such as Google Checkout, PayPal and Payments Pro via API. Further payment modules are offered commercially....
. - Commercial systems can also be tailored to one's needs so the shop does not have to be created from scratch. By using a pre-existing framework, software modules for various functionalities required by a web shop can be adapted and combined.
Online shopping
Like many online auction websites, many websites allow small businesses to create and maintain online shops (ecommerce online shopping carts), without the complexity that involved in purchasing and developing an expensive stand alone ecommerce software solutions.Design
Why does electronic shopping exist? For customers it is not only because of the high level of convenience, but also because of the broader selection; competitive pricing and greater access to information. For organizations it increases their customer value and the building of sustainable capabilities, next to the increased profits.Information load
Designers of online shops should consider the effects of information load. Mehrabian and Russel (1974) introduced the concept of information rate (load) as the complex spatial and temporal arrangements of stimuli within a setting. The notion of information load is directly related to concerns about whether consumers can be given too much information in virtual shopping environments. Compared with conventional retail shopping, computer shopping enriches the information environment of virtual shopping by providing additional product information, such as comparative products and services, as well as various alternatives and attributes of each alternative, etc.Two major sub-dimensions have been identified for information load: complexity and novelty. Complexity refers to the number of different elements or features of a site, which can be the result of increased information diversity. Novelty involves the unexpected, suppressing, new, or unfamiliar aspects of the site. A research by Huang (2000) showed that the novelty dimension kept consumers exploring the shopping sites, whereas the complexity dimension has the potential to induce impulse purchases.
Consumer expectations
The main idea of online shoppingShopping
Shopping is the examining of goods or services from retailers with the intent to purchase at that time. Shopping is an activity of selection and/or purchase. In some contexts it is considered a leisure activity as well as an economic one....
is not just in having a good looking website
Website
A website, also written as Web site, web site, or simply site, is a collection of related web pages containing images, videos or other digital assets. A website is hosted on at least one web server, accessible via a network such as the Internet or a private local area network through an Internet...
that could be listed in a lot of search engines or the art behind the site. It also is not only just about disseminating information, because it is also about building relationships and making money. Mostly, organizations try to adopt techniques of online shopping without understanding these techniques and/or without a sound business model. Rather than supporting the organization's culture and brand name, the website should satisfy consumer's expectations. A majority of consumers choose online shopping for a faster and more efficient shopping experience. Many researchers notify that the uniqueness of the web has dissolved and the need for the design, which will be user centered, is very important. Companies should always remember that there are certain things, such as understanding the customer's wants and needs, living up to promises, never go out of style, because they give reason to come back. And the reason will stay if consumers always get what they expect. McDonaldization
McDonaldization
McDonaldization is a term used by sociologist George Ritzer in his book The McDonaldization of Society . He explains it occurs when a culture possesses the characteristics of a fast-food restaurant. McDonaldization is a reconceptualization of rationalization, or moving from traditional to rational...
theory can be used in terms of online shopping, because online shopping is becoming more and more popular and a website that wants to gain more shoppers will use four major principles of McDonaldization: efficiency, calculability, predictability and control.
Organizations, which want people to shop more online with them, should consume extensive amounts of time and money to define, design, develop, test, implement, and maintain the website. Also if a company wants their website to be popular among online shoppers it should leave the user with a positive impression about the organization, so consumers can get an impression that the company cares about them. The organization that wants to be accepted in online shopping needs to remember, that it is easier to lose a customer then to gain one. Lots of researchers state that even when a site was "top-rated", it would go nowhere if the organization failed to live up to common etiquette, such as returning e-mails in a timely fashion, notifying customers of problems, being honest, and being good stewards of the customers' data. Organizations that want to keep their customers or gain new ones should try to get rid of all mistakes and be more appealing to be more desirable for online shoppers. And this is why many designers of webshops consider research outcomes concerning consumer expectations. Research conducted by Elliot and Fowell (2000) revealed satisfactory and unsatisfactory customer experiences.
User interface
It is important to take the country and customers into account. For example, in Japan privacy is very important and emotional involvement is more important on a pension's site than on a shopping site. Next to that, there is a difference in experience: experienced users focus more on the variables that directly influence the task, while novice users are focusing more on understanding the information.There are several techniques for the inspection of the usability
Usability
Usability is the ease of use and learnability of a human-made object. The object of use can be a software application, website, book, tool, machine, process, or anything a human interacts with. A usability study may be conducted as a primary job function by a usability analyst or as a secondary job...
. The ones used in the research of Chen & Macredie (2005) are Heuristic evaluation, cognitive walk through and the user testing. Every technique has its own (dis-)advantages and it is therefore important to check per situation which technique is appropriate.
When the customers went to the online shop, a couple of factors determine whether they will return to the site. The most important factors are the ease of use and the presence of user-friendly features.
Market share
E-commerce B2C product sales totaled $142.5 billion, representing about 8% of retail product sales in the United States. The $26 billion worth of clothes sold online represented about 13% of the domestic market, and with 72% of women looking online for apparel, it has become one of the most popular cross-shopping categories. Forrester ResearchForrester Research
Forrester Research is an independent technology and market research company that provides its clients with advice about technology's impact on business and consumers. Forrester Research has five research centers in the US: Cambridge, Massachusetts; New York, New York; San Francisco, California;...
estimates that the United States online retail industry will be worth $279 billion in 2015.
For developing countries and low-income households in developed countries, adoption of e-commerce in place of or in addition to conventional methods is limited by a lack of affordable Internet access.
Convenience
Online stores are usually available 24 hours a day, and many consumers have Internet access both at work and at home. Other establishments such as internet cafes and schools provide access as well. A visit to a conventional retail store requires travel and must take place during business hours.In the event of a problem with the item—it is not what the consumer ordered, or it is not what they expected—consumers are concerned with the ease with which they can return an item for the correct one or for a refund. Consumers may need to contact the retailer, visit the post office and pay return shipping, and then wait for a replacement or refund. Some online companies have more generous return policies to compensate for the traditional advantage of physical stores. For example, the online shoe retailer Zappos.com
Zappos.com
Zappos.com is an online shoe and apparel shop currently based in Henderson, Nevada.In July 2009, the company announced it would be acquired by Amazon.com in an all-stock deal worth about $1.2 billion. Since its founding in 1999, Zappos has grown to be the largest online shoe store.-Inception:Zappos...
includes labels for free return shipping, and does not charge a restocking fee, even for returns which are not the result of merchant error. (Note: In the United Kingdom, online shops are prohibited from charging a restocking fee if the consumer cancels their order in accordance with the Consumer Protection (Distance Selling) Act 2000.)
Information and reviews
Online stores must describe products for sale with text, photos, and multimedia files, whereas in a physical retail store, the actual product and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other experimentation).Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which product to buy.
Some stores even allow customers to comment or rate their items. There are also dedicated review site
Review site
A review site is a website on which reviews can be posted about people, businesses, products, or services. These sites may use Web 2.0 techniques to gather reviews from site users or may employ professional writers to author reviews on the topic of concern for the site...
s that host user reviews for different products. Reviews and now blogs gives customers the option of shopping cheaper org anise purchases from all over the world without having to depend on local retailers.
In a conventional retail store, clerks are generally available to answer questions. Some online stores have real-time chat features, but most rely on e-mail or phone calls to handle customer questions.
Price and selection
One advantage of shopping online is being able to quickly seek out deals for items or services with many different vendors (though some local searchLocal search (Internet)
Local search is the use of specialized Internet search engines that allow users to submit geographically constrained searches against a structured database of local business listings...
engines do exist to help consumers locate products for sale in nearby stores). Search engines, online price comparison service
Price comparison service
On the internet, a price comparison service allows individuals to see different lists of prices for specific products. Most price comparison services do not sell products themselves, but source prices from retailers from whom users can buy...
s and discovery shopping
Discovery shopping
Discovery shopping is a type of online shopping that emphasizes the browsing aspects of the shopping experience. Discovery shopping search offers shoppers guided queries for more personalized results...
engines can be used to look up sellers of a particular product or service.
Shipping costs (if applicable) reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax
Sales tax
A sales tax is a tax, usually paid by the consumer at the point of purchase, itemized separately from the base price, for certain goods and services. The tax amount is usually calculated by applying a percentage rate to the taxable price of a sale....
may compensate for this.
Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments bricks-and-mortar retailers order. Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently large orders.
Another major advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users' shopping experience..
Fraud and security concerns
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud on the part of the merchant than in a physical store. Merchants also risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the online purchase. With a warehouse instead of a retail storefront, merchants face less risk from physical theft.Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the merchant. Identity theft
Identity theft
Identity theft is a form of stealing another person's identity in which someone pretends to be someone else by assuming that person's identity, typically in order to access resources or obtain credit and other benefits in that person's name...
is still a concern for consumers when hackers break into a merchant's web site and steal names, addresses and credit card numbers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to require disclosure to consumers when this happens. Computer security has thus become a major concern for merchants and e-commerce service providers, who deploy countermeasures such as firewalls and anti-virus software to protect their networks.
Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the company issuing the seal. The purpose of these seals is to increase the confidence of the online shoppers; the existence of many different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent.
A number of resources offer advice on how consumers can protect themselves when using online retailer services. These include:
- Sticking with known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there is comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry oversight programs such as trust mark or trust seal.
- Before buying from a new company, evaluate the website by considering issues such as: the professionalism and user-friendliness of the site; whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and handling charges.
- Ensuring that the retailer has an acceptable privacy policy posted. For example note if the retailer does not explicitly state that it will not share private information with others without consent.
- Ensuring that the vendor address is protected with SSL (see above) when entering credit card information. If it does the address on the credit card information entry screen will start with "HTTPS".
- Using strong passwords, without personal information. Another option is a "pass phrase," which might be something along the lines: "I shop 4 good a buy!!" These are difficult to hack, and provides a variety of upper, lower, and special characters and could be site specific and easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems that shoppers potentially face include identity theft, faulty products, and the accumulation of spyware
Spyware
Spyware is a type of malware that can be installed on computers, and which collects small pieces of information about users without their knowledge. The presence of spyware is typically hidden from the user, and can be difficult to detect. Typically, spyware is secretly installed on the user's...
. Whenever you purchase a product, you are going to be required to put in your credit card information and billing/shipping address. If the website is not secure a customers information can be accessible to anyone who knows how to obtain it. Most large online corporations are inventing new ways to make fraud
Internet fraud
Internet fraud refers to the use of Internet services to present fraudulent solicitations to prospective victims, to conduct fraudulent transactions, or to transmit the proceeds of fraud to financial institutions or to others connected with the scheme....
more difficult, however, the criminals are constantly responding to these developments with new ways to manipulate the system. Even though these efforts are making it easier to protect yourself online, it is a constant fight to maintain the lead. It is advisable to be aware of the most current technology and scams out there to fully protect yourself and your finances.[20].
One of the hardest areas to deal with in online shopping is the delivery of the products. Most companies offer shipping insurance in case the product is lost or damaged; however, if the buyer opts not to purchase insurance on their products, they are generally out of luck. Some shipping companies will offer refunds or compensation for the damage, but it is up to their discretion if this will happen. It is important to realize that once the product leaves the hands of the seller, they have no responsibility (provided the product is what the buyer ordered and is in the specified condition).[20].
Lack of full cost disclosure
The lack of full disclosure with regards to the total cost of purchase is one of the concerns of online shopping. While it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front as additional fees such as shipping are often not be visible until the final step in the checkout process. The problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not include additional fees that must be paid upon delivery such as duties and brokerage. Some services such as the Canadian based WishabiWishabi
Wishabi is a Canadian online shopping platform that is owned and maintained by the Wishabi corporation. Wishabi's mission is "to give Canadians the best tools to make informed shopping decisions"....
attempts to include estimates of these additional cost, but nevertheless, the lack of general full cost disclosure remains a concern.
Privacy
Privacy of personal information is a significant issue for some consumers. Different legal jurisdictions have different laws concerning consumer privacy, and different levels of enforcement. Many consumers wish to avoid spam and telemarketing which could result from supplying contact information to an online merchant. In response, many merchants promise not to use consumer information for these purposes, or provide a mechanism to opt-out of such contacts.Many websites keep track of consumers shopping habits in order to suggest items and other websites to view. Brick-and-mortar stores also collect consumer information. Some ask for address and phone number at checkout, though consumers may refuse to provide it. Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a catalog mailing list. This information is obviously not accessible to the merchant when paying in cash.
Hands-on Inspection
Typically, only simple pictures and or descriptions of the item are all a customer can rely on when shopping on online stores. If the customer does not have prior exposure to the item's handling qualities, they will not have a full understanding of the item they are buying. However, Written and Video Reviews are readily available from consumers who have purchased similar items in the past. These can be helpful for prospective customers, but these reviews can be sometimes subjective and based on personal preferences that may not reflect end-user satisfaction once the item has been received.Product suitability
Many successful purely virtual companies deal with digital products, (including information storage, retrieval, and modification), music, movies, office supplies, education, communication, software, photography, and financial transactions. Other successful marketers use Drop shipping or affiliate marketingAffiliate marketing
Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's own marketing efforts...
techniques to facilitate transactions of tangible goods without maintaining real inventory.
Some non-digital products have been more successful than others for online stores. Profitable items often have a high value-to-weight ratio, they may involve embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers. Items which can fit in a standard mailbox—such as music CDs, DVDs and books—are particularly suitable for a virtual marketer.
Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets—in such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number.
Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings—most notably clothing—and products where colour integrity appears important. Nonetheless, Tesco.com
Tesco
Tesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues and the second-largest measured by profits...
has had success delivering groceries in the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, albeit that many of its goods are of a generic quality, and clothing sold through the internet is big business in the U.S.
Aggregation
High-volume websites, such as Yahoo!Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
, Amazon.com
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
and eBay
EBay
eBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...
, offer hosting services for online stores to all size retailers. These stores are presented within an integrated navigation framework. Collections of online stores are sometimes known as virtual shopping malls or online marketplace
Online marketplace
Online marketplace refers to a type of ecommerce site where product and inventory information is provided by multiple third parties, whereas transactions are processes by the marketplace operator. Online marketplaces have become a driver of new business for online merchants that leverage them as...
s.
Impact of reviews on consumer behaviour
One of the great benefits of online shopping is the ability to read others' reviews, which could be from experts or simply fellow shoppers on one product and service.The Nielsen Company conducted a survey in March 2010 and polled more than 27,000 Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
users in 55 markets from the Asia-Pacific, Europe, Middle East, North America and South America to look at questions such as "How do consumers shop online?", "What do they intend to buy?", "How do they use various online shopping web pages?", and the impact of social media
Social media
The term Social Media refers to the use of web-based and mobile technologies to turn communication into an interactive dialogue. Andreas Kaplan and Michael Haenlein define social media as "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0,...
and other factors that come into play when consumers are trying to decide how to spend their money on which product or service.
According to that research, reviews on electronics (57%) such as DVD players, cell phones or PlayStations and so on, reviews on cars (45%), and reviews on software (37%) play an important role and have influence on consumers who tend to make purchases and buy online.
In addition to online reviews, peer recommendations on the online shopping pages or social media play a key role for online shoppers while researching future purchases of electronics, cars and travel or concert bookings. On the other hand, according to the same research, 40% of online shoppers indicate that they would not even buy electronics without consulting online reviews first.
See also
- Bricks and clicks business model
- Electronic businessElectronic businessElectronic business, commonly referred to as "eBusiness" or "e-business", or an internet business, may be defined as the application of information and communication technologies in support of all the activities of business...
- Electronic commerceElectronic commerceElectronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
- Direct importsDirect importsDirect Imports are products imported directly into a country and not through the manufacturer's authorized agent/distributor. Since there is no factory-authorized middleman involved in the import of these products, the added costs are lower and the customer pays less...
- List of online stores
- List of free and open source eCommerce software
- Online auction business modelOnline auction business modelThe online auction business model is one in which participants bid for products and services over the Internet. The functionality of buying and selling in an auction format is made possible through auction software which regulates the various processes involved.Several types of online auctions are...
- Online music storeOnline music storeAn online music store is an online business which sells audio files, usually music, on a per-song and/or subscription basis. It may be differentiated from music streaming services in that the music store offers the actual music file, while streaming services offer partial or full listening without...
- Online pharmacyOnline pharmacyOnline pharmacies, Internet pharmacies, or Mail Order Pharmacies are pharmacies that operate over the Internet and send the orders to customers.Online or internet pharmacies might include:...
- Online shopping rewardsOnline shopping rewardsOnline shopping rewards portals are a relatively new type of loyalty program.The advent of online shopping has resulted in the rapid development of a large number of rewards programs that offer incentives for shopping...
- Open catalogueOpen catalogueOpen catalogue is an open content catalogue or free content catalogue, i.e., a structured database with information about products or other stored items in a standardized format...
- Retail therapyRetail therapyRetail therapy is shopping with the primary purpose of improving the buyer's mood or disposition. Often seen in people during periods of depression or transition, it is normally a short-lived habit...