Illusion of safety: How consumers underestimate manipulation and deception in online (vs. offline) shopping contexts

Online commerce changes how consumers shop for products and services—while also giving firms more control over consumers' shopping experience, more access to their information, and leading more firms to use these platforms to their financial advantage. In this research, I examine consumer perceptions of firms when they shop for products and services online (vs. offline), to determine whether consumers feel firms might use certain kinds of manipulative and deceptive tactics against consumers. Results show consumers believe firms are less likely to use manipulative and deceptive practices to increase consumer spending, when they shop online (vs. offline) for products and services. These findings remain consistent despite key individual differences (in ethnicity, gender, age, and time spent online). This research also demonstrates how certain cues can make consumers more (vs. less) suspicious of firms when they shop online and discusses the implications these findings have for consumer financial welfare.     

Competing Online: Studying Consumer Choice Drivers for Online Financial Services

ABSTRACT

Given the rapid increase in the consumer use of online services and the increase in competition between firms that compete online, firms are faced with a crucial challenge. Having invested significant resources in transitioning consumers from using offline services to using online services, they now need to understand what drives consumers to choose between competing online services. Our study seeks an exploratory answer to the above challenge. Specifically, we consider, “what role do factors that drive consumers into using online services play in assisting firms better compete in the online space?” This paper explores the above question by quantifying the value that consumers of an online financial service place on having access to in-depth product information, an affordable online service, an easy to use online service, access to offline capabilities, and available marketing promotions. The results reported in this paper are based on a web-based discrete choice experiment in which 2,209 consumers were asked to compare various online financial service offerings, differing from each other in terms of the relative availability of our critical factors. The results demonstrate that consumer preferences (relative utilities) for various factors of an online financial service are different. Our results enable practicing managers to understand the factors that drive consumer choice when faced with competing online services. We believe that these results have both managerial and research implications for design, management and operations strategy formulation for online services.     

Integrated consumer shopping decision model: A Japanese online supermarket context

Abstract

Online shopping is not a new marketing channel but has been growing tremendously throughout Japan. The rapid growth of Internet technology has enabled the Japanese to break away from their conservative culture and embark on different shopping experiences by shopping online. With the growing importance of online reviews to promote one’s business, Japanese online supermarkets are looking for ways to increase consumer-generated content. The purpose of this study is to investigate Japanese repeat online consumers and the antecedents that encourage them to review their shopping experiences, including the supermarket website they used and product availability in the online supermarket. It was found that online supermarkets must focus on establishing confidence with their repeat online consumers if they desire to increase the electronic word of mouth (e-WOM) of their online supermarket. Implications are discussed in relation to online supermarkets and repeat consumers’ intentions to review their online shopping experiences.     

Measuring the impact of online reviews on consumer purchase decisions – A scale development study

Consumers' exposure to online reviews influences their online retail shopping behavior. They search for reviews while evaluating products for purchase decisions. Past studies have indicated that online reviews affect the credibility and trust of the sellers and the products they sell on online platforms. Keeping this in view, the current paper aims to develop and validate a scale to understand the impact of online reviews on consumer purchase decisions. Data were collected from 431 young online shoppers for this research. The initial exploratory factor analysis (EFA) results helped identify four factors, viz. source credibility, volume, language and comprehension, and relevance which constitute the scale. The scale was validated by confirmatory factor analysis (CFA). The study's findings fill the gap of having a standardized scale that online retailers can use as indicators to assist consumers in their online decision-making. The discussions and implications support consumers' susceptibility to online reviews, an essential source for product and brand information in facilitating online consumers' purchase decisions.     

Customer Satisfaction with Consumption Systems

ABSTRACT

Purpose: This research examines how satisfaction toward a product and its associated services offered together by a single provider jointly affects behavioral intentions toward the provider.

Design/methodology/approach: In this study, empirical tests were conducted using longitudinal data spanning 5 years from a multinational company that offers both products and associated services as part of a consumption system to their customers.

Findings: Results show a joint congruent effect of product and services satisfaction on behavioral intentions is linear and positive. It appears that offering great service cannot compensate for less-than-adequate satisfaction toward the product. The results further highlight decreasing customer sensitivity to improvements in both sources of satisfaction and imply that focusing on too high levels of one type of satisfaction for their customers can actually be counterproductive for firms.

Research Limitations: Our model was tested using the data obtained from a single firm. Future research could test this model with data from multiple firms in various different industries and establish broader generalizability to the findings.

Practical Implications: Findings provide managers with insights on how to allocate resources across product and service spaces and to manage product and services revenues over time. Results also indicate that customer behavioral intention ratings are more weighted on product quality over the service received by them. However, mere improvements in the product cannot provide the highest desired results and therefore quality improvements in the product need to be complemented by improvements in service quality.

Originality/Value: There is a rapid emergence of the phenomenon of manufacturers providing both products and services as an integrated consumption system to their customers. While the provision of both product and service subsystems by the same firm leads to certain synergies, there are obvious costs to the development of new service capabilities and coordination with existing product capabilities. Our research intends to address this issue.     

On manufacturers complementing the traditional retail channel with a direct online channel

With the explosion of the Internet and the reach that it affords, many manufacturers have complemented their existing retail channels with an online channel, which allows them to sell directly to their consumers. Interestingly, there is a significant variation within product categories in manufacturer's use of the Internet as a direct distribution channel. The main objective of this study is to examine the strategic forces that may influence the manufacturer's decision to complement the retail channel with a direct online channel. In particular, we are interested in answering the following questions:

1. Why is it that in some markets only a few firms find it optimal to complement their retail channels with a direct Internet channel while other firms do not?
2. What strategic role (if any), does the direct Internet channel serve and how do market characteristics impact this role?

To address these issues we develop a model with a single strategic manufacturer serving a market through a single strategic retailer. In addition to the focal manufacturer's product the retailer carries products of competing manufacturers. Consumers in this market are one of two types. They are either brand loyal or store loyal. The retailer sets the retail price and the level of retail support, which impact the demand for the manufacturer's product. The retailer's decisions in turn depend on the wholesale price as well as the Internet price of the product if the manufacturer decides to complement the retail channel with an online channel. Our analysis reveals that the optimality of complementing the retail channel with an online channel and the role served by the latter depends critically upon the level of support that the retailer allocates to the manufacturer's product in the absence of the online channel. The level of support allocated by the retailer, in the absence of the online channel, depends upon the retail margins on the manufacturer's product relative to that on rival products in the product category. When the size of the brand loyal segment is small relative to the size of the store loyal segment then in the absence of the online channel, the manufacturer can lower wholesale price and enhance retail support, especially when the retail margins on the rival products are low. In contrast, when the size of the loyal segment is large and the retail margins on rival products are high the manufacturer will find it more profitable to charge a high wholesale price even if that induces the retailer to extend low levels of support. If the manufacturer decides to complement the retail channel with an online channel, some consumers who would have purchased from the retailer might prefer to purchase online. Our analysis reveals that when consumers' sensitivity to price differences across the competing channels exceeds a certain threshold it is not optimal for the manufacturer to complement the retail channel with an online channel. However, this price sensitivity threshold itself depends upon product/market characteristics, suggesting that manufacturers seeking to complement their retail channels with an online channel should look beyond the nature of threat the online channel poses to the retail channel in devising their optimal distribution strategies. When the retail margins on rival products are sufficiently small, complementing the retail channel with an online channel when optimal allows the manufacturer to price discriminate and enhance profits. In contrast when retail margins on rival products are sufficiently high, complementing the retail channel with an online channel serves to enhance retail support. We also identify market conditions under which profits of both the manufacturer and the retailer are greater with the online channel than that without it. This is particularly interesting since the online channel competes with the retail channel.     

Do Product and Consumer Characteristics Affect the Relationship Between Online Experience and Customer Satisfaction?

ABSTRACT

This study utilizes a survey to understand how relevant product and consumer characteristics affect the relationship between online experience and satisfaction. Results indicate that Web shoppers' satisfaction is strongly affected by a superior online experience if they have no prior experience with the purchased brand, they are purchasing a high priced product, and their general attitudes toward online shopping are not very favorable. Further, the relationship between online experience and satisfaction was found to be stronger for females as compared to males.     

The investigation on dimensions of e-satisfaction for online shoes retailing

Purpose—Online retailing has become a standard component in companies' multi-channel structure. This trend also involves an increasing number of experience attribute dominated products, which traditionally rely on brick-and-mortar retailers. These manufacturers have started to open their own online retail stores. This study identifies the key determinants of e-satisfaction at different stages of shoes online shopping process.Design/methodology/approach—We collect consumers' reviews about their online shopping experiences from online review websites. We use both qualitative and quantitative approaches to analyze the dataset, and investigate the complete process of consumers' e-tailing experiences.Findings—this research identifies the two key factors driving e-satisfaction of purchasing experience attribute dominated products online: product selection and customer service. In particular, our findings show that product selection is critical for e-satisfaction in the pre-purchase stage, and that customer service is more important in the post-purchase stage. Lastly, the study finds that manufacturers' websites often receive more negative reviews because of their poor service recovery strategies in the post-purchase period.Research limitations/implications—This study emphasizes the importance of adopting a dynamic approach by considering various stages of the consumer's online shopping experience. This study focuses on one specific experience good; the shoe industry.Practical implications—The results of this study are invaluable to firms interested in providing experience attribute dominated products online. Our findings indicate that product selection and especially post-purchase service are critical for a successful e-tailing.Originality/value—This paper emphasizes the importance of taking a dynamic view to investigate consumer's e-tailing experience. We adopt both qualitative and quantitative approaches in our study.     

What determines firms’ intention to postpone product differentiation?

Abstract

In present-day Japan, more firms are beginning to apply postponed product differentiation in favor of providing mass-customized products. Mass customization can lead to competitive advantages in satisfying consumers’ individual needs. We propose a causal model to describe why and how Japanese distributors decide to postpone product differentiation and supply mass-customized products. The model was empirically tested by structural equation modeling with a dataset from Japanese automobile dealers, who have employed highly advanced mass customization systems and are world leaders in this practice. The results show that two environmental factors, uncertainty and innovation, affect firms’ expectations of their customers’ intentions to purchase mass-customized products and, in turn, firms’ decisions regarding postponing product differentiation in favor of mass customization. Mass customization has a high potential for growth in the future due to increasing levels of uncertainty and evolving forms of innovation.     

Consumer Shopping Styles and Online Shopping: An Empirical Study of Indian Consumers

ABSTRACT

The generalizability and applicability of the Consumer Shopping Inventory (CSI) scale on Indian sample in predicting online shopping behavior was examined. CSI scale has been adapted by researchers to validate its applicability in different countries. Results revealed new factors and different segments of consumers were identified by factor analysis. The findings posit that the original U.S. eight-factor model could not be confirmed completely on Indian sample. However, the study found support for five factors: quality-conscious shopper, fashion-conscious shopper, uninterested shopper, impulsive shopper, and brand-conscious shopper. Online shopping behavior was categorized under convenience, information availability, and cost factors. Demographic factors do not influence consumers' decision to shop online. Consumers shopping online frequently and Impulsive shoppers are likely to look at convenience factor of online shopping. Information availability was important for fashion-conscious shoppers, consumers frequently shopping online, and impulsive shoppers. Brand-conscious shoppers and quality-conscious shoppers were not likely to purchase online.     

Marketing compatible, yet differentiated, products : In search of competitive equilibria when network externalities are at work

Many goods are characterized by the fact that their utility increases with the number of consumers who buy them. It is the case for computers or communication networks, for example. Such goods are said to be subject to network externalities. We study those externalities in the context of a product differentiation model where product characteristics (or the image of the firm) are taken into account.We consider a market where two firms sell differentiated products and we study an equilibrium where the firms are competing in quantities (Cournot model) as well as in quality (two-stage game). We show how the degree of differentiation between the firms (or their products) and the compatibility decision are affected by the externality effect.     

Using Groupon for health and wellness businesses

Social merchants are small business owners and entrepreneurs who adopt social shopping as a new sales channel. They employ social shopping intermediaries, such as Groupon and LivingSocial, to promote their products or services to price-sensitive customers at large discounts. The success of social merchants depends in part on the reputation they gain at merchant review sites (e.g., Yelp, TripAdvisor, Angie's List), via which consumers post online product and merchant reviews. An analysis of social shopping provides insight regarding how social shopping works and what merchants must be aware of if they utilize social shopping intermediaries. This article shares these insights in the context of a set of health and wellness merchants that were studied for five years. Specifically, this article discusses how their Groupon daily deals affect merchant reviews, and how surviving vs. failed social merchants differ in terms of their review scores and number of reviews. Finally, this article provides recommendations about merchant review management to health and wellness merchants.     

Online service personalization for apparel shopping

This study explores the dynamics of online service personalization in the online apparel retailing context, with regard to customers’ actual online shopping activities. From an empirical study of American Internet shoppers (n=204), three types of widely-used online service personalization, that is (i) offer, (ii) recognition, and (iii) personal advice, were identified. Moreover, grounded by the Theory of Reasoned Action [Fishbein, M., Ajzen, I., 1975. Belief, Attitudes, Intention, Behavior: An Introduction to Theory and Research. Addison-Wesley, Reading, MA], relationships between customers’ online service personalization attitudes and their online shopping activities—regarding apparel items—have been investigated. Findings of this study empirically present the dynamics of online service personalization in the context of online apparel retailing. Also, the results show that customer online shopping experiences may impact on their online service personalization attitudes. Theoretical and managerial implications are also discussed regarding online service management. Based on the results, Internet-based apparel retailers may benefit from developing various types of personalization services by enhancing shopping intentions of their customers, in particular, of those who are loyal to the retailers.     

Conflicting attitudes and scepticism towards online shopping: the role of experience

Researchers typically study how levels of risk perception about online shopping affect whether and how consumers use the channel to buy products. In this paper, we propose to study how different types of attitudes towards online shopping are formed when consumers consider both the benefit and the risk of using the Internet to do their shopping. We consider the possibility that general types of attitudes are formed when consumers' perception of the risk and the benefit of using online shopping conflict. We pay particular attention to the concept of online shopping scepticism where consumers may fully realize the benefit of using the Internet to do their shopping, but also express a certain level of concern about the risk of using that channel. In the risk literature, researchers have shown that experience and increased exposure to a particular technology usually involves the accumulation of more and better knowledge that in turn may lead to a reduction in the perception of the risks involved. In this research, we also explore the role of experience in the context of consumers' intention to use online shopping. More specifically, we postulate that online shopping experience has a direct effect as well as an indirect effect on the intention to use online shopping. Experience with online shopping directly increases the consumer's intention to use the Internet to buy products but it also reduces the degree of scepticism and risk aversion, and that in turn, also increases the intention to use online shopping.     

Shopping East and Shopping West—Chinese Consumer Behavior in Two Worlds

ABSTRACT

In today's China, consumers not only have the chance to sample products and services from around the world, but to experience cultural influences from a vast range of countries. In particular, Western products and services—and cultural values—have become increasingly popular. Consumers now shift between different worlds (Chinese and Western) with seeming ease. This research identifies the factors that encourage consumers to shift between these different worlds—and values. The factors include the situation and context (of the shopping experience), peer influence and dynamics, the role of conversation at or near the time of purchase, and the nature of the product and service. The role of “time,” “chance,” and “intuition” in the shopping experience and cultural shifts are also examined. What emerges from the study is a changeable, mobile, and flexible community quite capable of shifting between different sets of values (and consumer attitudes) easily and often very quickly. For companies, the key to success (at least to some degree) is to place their goods and services in a context that helps to create a complementary, integrated, and supportive image of the world they wish to create in the minds of their Chinese consumers.     

Logistics mode strategy of firms selling fresh products on e-commerce platforms with private brand introduction

The popularity of online shopping has enticed many firms selling fresh products to establish third-party stores on e-commerce platforms. For those firms. adopting which logistics mode between platform logistics and third-party logistics (TPL) for their third-party stores is the real decision problem. Moreover, many platforms have introduced their private brands of fresh products to occupy more make share, which will inevitably affect firms' operation strategies. To explore the optimal logistics mode strategy of firms selling fresh products on platforms and the impacts of platform private brand introduction on those firms' operation strategies, four theoretical models are constructed. Main results show that regardless of whether platforms have introduced their private brands of fresh products or not, the optimal logistics mode strategy depends on the sizes of the platform logistics cost and the service level difference between platform logistics and TPL. Furthermore, introducing platform private brands of fresh products will increase firms' willingness to adopt TPL for their third-party stores on platforms. These main results are robust considering the existence of fresh product supplier and different consumer's sensitivity to freshness-keeping efforts.     

消费者对网上购物的风险认知及影响因素

风险认知是影响消费者网上购物的重要因素。网上购物的风险,主要包括财务风险、性能风险、身体风险、时间风险、隐私风险、心理风险和社会风险等维度。影响消费者网上购物风险认知的因素,主要有网络使用经验、网上购物经历、产品知识、创新性等。采取一些适当的措施,可以有效地降低网上购物的风险认知。     

Retailers and Consumers: The Pass‐through of Import Price Changes

In this paper, we estimate pass‐through rates of import price changes to retail prices across retailers and consumers for apparel purchases in Germany for the period of 2000–07. We find that high‐price retailers do not pass through changes in the import price. Pass‐through rates for low‐price retailers are 53 per cent within three months. Consequently, pass‐through rates for low‐income households are 58 per cent, significantly larger than those for high‐income households. We then present one possible explanation for these observations in a theoretical model with endogenous vertical product differentiation due to bundling an ex ante homogeneous import goods with services. Following an import price change, retailers who sell a cheaper unbundled product change prices to a greater extent than retailers who sell a higher‐priced bundle of product and service.     

Mobile shopping intensity: Consumer demographics and motivations

PurposeTo investigate how consumer demographics and motivations may influence their mobile shopping intensity.Design/methodology/approachAn online survey was developed to collect data using SurveyMonkey's online shopper panel. The final sample consisted of 937 mobile shoppers. Linear regression analysis was performed to test the hypotheses.FindingsConsumers' education and income levels significantly increase their number of mobile purchases, their frequency of purchases, and the amount of money spent on mobile purchases. Males have been found to spend more on mobile shopping than females, while younger people made more mobile purchases than older people. This study also identifies six types of motivations that drive consumers’ mobile shopping intensity, including convenience seeking, bargain hunting, enjoyment seeking, perceived usefulness, ease of use, and innovativeness.Research limitations/implicationsFuture research may examine additional motivational measures and situational factors and conduct cross-cultural studies.Practical implicationsFindings from this study can help businesses develop their mobile shopping strategies.Originality/valueThis is the first study to investigate how consumer demographics and motivations may influence their mobile shopping intensity.     

Differentiation,labor market and globalization

We consider two countries with initially one firm in each country and the possibility for each firm to invest in the other country or commercialize its products, and for workers to immigrate (Common Labor Market; CLM). Interestingly, when firms compete on the product market with no competition on the labor market (Goods’ Mobility; GM), they do not differentiate their qualities. However, when competition is introduced in both markets (Foreign Investment; FI) firms differentiate their products. We compare the globalization scenarii and prove that they improve the global social welfare relative to autarky and that a cooperative choice by countries of a globalization scenario would lead to GM.