Internet proliferation in today’s time has led to a boost in online shopping. Social media acts as a promotional and advertising hub for e-commerce retailers which are the primary drivers of online consumer behaviour (Farooqi, 2017). It creates an impetus to understand online consumer behaviour towards shopping for sustaining online businesses and increasing the chances of profit and success in the long run (Elkhani and Bakri, 2012). This article reviews the most critical and relevant factors in today’s competitive business scenario.
Understanding the perceived risk of a prospective buyer
Perceived risk is uncertainty that online consumers face when they cannot foresee the consequences of their purchase decisions (Schiffman, Kanuk and Kumar, 2010). They affect online consumer behaviour, as people are discouraged to buy online due to the quality, health, time, delivery and after-sales risks associated with it. When it comes to online shopping, perceived risk can be of 6 types:
- Performance: It relates to the inefficiency to meet the buyer’s expectation.
- Source: It involves the risk of buying from untrustworthy websites.
- Financial: It involves the risk of losing financial information as debit and credit cards.
- Social: It relates to a reluctance to buy a certain item that might not be approved by others.
- Physical: It relates to the risk of using a product, after purchase.
- Privacy: It relates to the risk of losing personal information (Hassan, 2006).
These risks might decrease the chances of converting a prospected customer visit to a purchase transaction visit and this leads to the loss of business opportunity (Khare and Rakesh, 2011).
Offering a better user interaction
A professional, well-designed platform is integral to establish an effective online consumer behaviour (Rust and Kannan, 2003). It affects the navigation and information search on the e-commerce platform. Well-defined categories, intelligent segmentation of products, and an easy and fast checkout system help ease the process of purchase for online consumers (Kanupriya and Kaur, 2016). Having such features on an e-commerce platform increases the chances of a transaction as well as the intention to revisit.
Flexibility in price is one of the most important factors affecting online consumer behaviour. Romano and Fjermestad (2001) assert that price transparency and low online prices are the reasons for online shopping platforms gaining popularity today. Therefore e-commerce companies need to keep a focus on maintaining competitive prices. In addition to that, consumers also prefer to see good deals on their purchases, such as freebies, extended after-sales services, cash back and referral bonuses (Jain, Goswami and Bhutani, 2014).
Aichner and Colletti (2013) find easy availability and product variety to be the second most important reason for consumers preferring online shopping. Small stores may not have enough variety of products that the consumer is looking for. In order to overcome this limitation of in-store shopping, customers prefer to browse online for their needs (Khosrowpour, 2004). Thus, by working to create an impressive product portfolio, the businesses can increase the chances of greater purchases from customers and better output in terms of sales and revenue (Moshrefjavadi et al., 2012).
Quality service offering affects online consumer behaviour
The service offering is always considered an important determinant of driving online consumer behaviour. Gao (2005) states that service quality is particularly important in case of online shopping as consumers interact with a faceless, non-personal entity in the form of a virtual store. Four main factors related that impact service quality are:
- regular logistics information,
- quick resolution of complaints,
- returns redressal,
- security and privacy of customers.
Bickerton, Bickerton and Pardesi, (2000) state that every product should carry a guarantee or warranty, which has been designed keeping the customer in mind. There are three ways in which an online shopping company provides a guarantee or warranty:
- by the company that owns the platform,
- by the manufacturing company,
- or by the retailer.
Guarantee or warranty needs to be sorted out by online companies to create better trust among customers (Osman, Yin-Fah and Choo, 2010). An assured deal boosts the image of the business and attracts customers to establish good relations with the e-commerce platform.
Understanding various factors that affect online consumer behaviour can help e-commerce businesses to develop and apply promotional strategies to improve their success, performance level, as well as revenue. Moreover, by making sure the customer behaviour is positive, companies can work to improve their brand image, company profile and websites.
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- Schiffman, L., Kanuk, L. and Kumar, S. (2010) Consumer Behaviour. New Delhi: Dorling Kindersley.
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