Internal and external factors influencing online purchase decision

Online purchase decision is highly influenced by internal and external factors (Zhang et al., 2013). Internal factors reflect one’s personal traits and experiences which impact their decision-making approach towards online buying and even leads to impulsive buying. On the other hand, external factors are more controlled by the nature of the products or services, recommendation and reviews from other customers, cultural and social impact. This article illustrates both internal and external factors which highly influence the online purchase decision of the consumers.

Internal factors influencing online purchase decision

Internal factors that influence the online purchase decision of the consumers
Internal factors that influence the online purchase decision of the consumers

Ease of use

E-commerce companies provide a wide spectrum of products with multiple options keeping in mind the expectations of the consumers (Gong et al., 2013). The fact that consumers are able to have the option of selecting from a wide spectrum of products or services at the comfort of home is a huge advantage which influences the online purchase decision. Consumers also have the luxury of selecting the payment mode and in some cases, try the products before paying. For example, retail giant Amazon offers “try before you buy” option which caters to the current expectation of the consumers (Amazon, 2019). There is a growing dependency on online shopping due to the ease of use of the online medium.

Personal experience

User’s previous experience with the e-tailer also influences current purchase decision (Wu, 2013). If the consumers have a good experience with a specific e-commerce firm then it influences the online purchasing behaviour and on the contrary. The essence of the feel-good factor is required to impact online purchase decision in a positive way.

Personal traits

Personal traits reflect the attitudes, self-image and perception of the consumers. The attitude of the consumers’ outlines if the consumer believes in having the feel-good factor through brick and mortar outlets prior to purchasing. Consumers are likely to go with the current trend of the masses of buying first through e-commerce sites and then experiencing it (Chen et al., 2016). Self-image illustrates the image that the individual carries and what they think about themselves when it comes to online shopping. The perception of the consumers also holds significant value as it is going to influence their online purchasing decision. These three personal traits change according to the values of the consumer at a certain point of time.

Time management

It is one of the internal factors which influence the online purchasing decision. If the consumers face a paucity of time then they are likely to opt for online shopping for their required products or services (Gong et al., 2013). On the other hand, if they are not bound by any time constraints they might select both brick and mortar outlets and online shopping. This internal factor is highly influenced by how consumers manage their time.

External factors influencing online purchase decision

External factors that influence the online purchase decision of the consumers
External factors that influence the online purchase decision of the consumers

Service quality

A consumer is attracted towards a particular product or service on the basis of its quality and the price bracket it comes within (Malik & Guptha, 2013). The quality of the product or services is also critical for the growth and profitability of the business. If it does not meet the expected standard of the consumer then it is going to influence their online purchasing decision. On the other hand, if the quality of the product matches the consumer satisfaction level then it leads to surge in sales, revenues and market share of the firm. For example – ASOS through their quality products is ensuring to meet the standards of the consumers (Asosplc, 2019).

Easy payment options

It is one of the key external factors which has highly influenced the consumer’s online purchase decision. Payment options have been never so easy with e-commerce firms adapting different strategies regarding payment options such as cash on delivery (COD), EMI options, payment through net banking, lazy pay options etc (Wu et al., 2014).

Easy accessibility

Gone are the days when consumers had to stand in a queue in supermarkets to get their dairy products. With a few clicks, consumers are able to get a wide variety of goods and services on their doorsteps. This easy accessibility option facilitated by the majority of e-commerce firms has been a key driving factor towards online purchasing (Chocarro et al., 2013). Nowadays many companies like Warby Parker, designer glasses brand, offers consumer a set of five frames to try on before making any purchase and the firm also uses face mapping to suggest glasses that perfectly fit the face of the client (Wired, 2019).

Consumer reviews and recommendations

The reviews, ratings and recommendation of other consumers on a particular product or service also influence the buying decision (Jiménez & Mendoza, 2013). Feedbacks from other consumers help to get a general view on the quality of the products or services which impacts the decision-making process. On the other hand, reviewing thousands of comments and feedbacks take a huge amount of time and can be confusing at times. For example, ratings provided by users of Zomato on the services of a particular restaurant and influence a prospective consumer.

The positive relationship between different factors and online choice of customers

Apart from the internal and external elements identified above, there are several other factors that influence online shopping behaviour. These factors include:

  • returns policy of the service provider,
  • non-delivery of the products, 
  • cultural differences,
  • innovativeness of the firm,
  • consumer’s attitude while purchasing and,
  • perceived usefulness of the products.

As the e-commerce market evolves and consumer requirements become increasingly dynamic, this matrix undergoes a constant change. Therefore the research on internal and external factors affecting online purchasing decisions needs to be regularly updated.

References

  • Amazon, 2019. Try before you buy with Prime Wardrobe. [Online] Available at: https://www.amazon.com/primeinsider/tips/prime-wardrobe.html [Accessed 16 February 2019].
  • Asosplc, 2019. CORPORATE RESPONSIBILITY. [Online] Available at: https://www.asosplc.com/corporate-responsibility/our-customers [Accessed 16 February 2019].
  • Chen, J., Teng, L., Yu, Y., & Yu, X. 2016. The effect of online information sources on purchase intentions between consumers with high and low susceptibility to informational influence. Journal of Business Research, 69(2), pp.467-475, doi: 10.1016/j.jbusres.2015.05.003.
  • Chocarro, R., Cortiñas, M., & Villanueva, M.L. 2013. Situational variables in online versus offline channel choice. Electronic Commerce Research and Applications, 12(5), pp.347-361, doi: 10.1016/j.elerap.2013.03.004.
  • Gong, W., Stump, R.L. & Maddox, L.M.., 2013. Factors influencing consumers’ online shopping in China. Journal of Asia Business Studies, 7(3), pp.214-230, DOI: 10.1108/JABS-02-2013-0006.
  • Gong, W., Stump, R.L., & Maddox, L.M. 2013. Factors influencing consumers’ online shopping in China. Journal of Asia Business Studies, 7(3), pp.214-230, DOI: 10.1108/JABS-02-2013-0006.
  • Jiménez, F.R., & Mendoza, N.A. 2013. Too popular to ignore: The influence of online reviews on purchase intentions of search and experience products. Journal of Interactive Marketing, 27(3), pp.226-235, DOI: 10.1016/j.intmar.2013.04.004.
  • Malik, G., & Guptha, A. 2013. An empirical study on behavioral intent of consumers in online shopping. Business Perspectives and Research, 2(1), pp.13-28, doi: 10.1177/2278533720130102.
  • Wired, 2019. TRY ON YOUR NEXT PAIR OF GLASSES USING JUST YOUR IPHONE. [Online] Available at: https://www.wired.com/story/warby-parker-augmented-reality-app/ [Accessed 16 February 2019].
  • Wu, L. 2013. The antecedents of customer satisfaction and its link to complaint intentions in online shopping: An integration of justice, technology, and trust. International Journal of Information Management, 33(1), pp.166-176, DOI: 10.1016/j.ijinfomgt.2012.09.001.
  • Wu, L.Y., Chen, K.Y., Chen, P.Y. & Cheng, S.L.., 2014. Perceived value, transaction cost and repurchase-intention in online shopping: A relational exchange perspective. Journal of Business Research, 67(1), pp.2768-2776, doi: 10.1016/j.jbusres.2012.09.007.
  • Zhang, Z. et al., 2013. Factors influencing the effectiveness of online group buying in the restaurant industry. International Journal of Hospitality Management, 35(1), pp.237-245, DOI: 10.1016/j.ijhm.2013.06.012.

Jaideep Bhattacharjee

Research consultant at Project Guru
Jaideep is an engineer in marine engineering and was a part of the Mediterranean Shipping Company for a year.With expertise in the technical field, he is good with numbers and statistics and mostly uses SPSS.His expertise are in the field of marketing, human resources management, change management, strategic management and Finance. His strengths also lie in framing strong literature review and interpretation. Being an avid follower of Manchester United, he also takes interest in sports especially football, cricket and chess.

Related articles

  • Advantages of online shopping to consumers Online shopping has showcased tremendous potential and can be even thought of replacing the conventional in-store shopping completely. This has been made possible through the phenomenal breakthroughs in information and communication technologies.
  • Factors affecting online consumer behaviour towards shopping It creates an impetus to understand consumer behaviour towards online shopping for sustaining online businesses and increasing the chances of profit and success in the long run (Elkhani and Bakri, 2012).
  • Impact of demographic factors on online buying behaviour Consumer behaviour explains the attitudes, intentions and preferences of the consumer prior to their buying which has been closely monitored and exploited by the e-commerce businesses (Akkucuk & Esmaeili, 2016). Online buying behaviour is influenced by multiple factors which depend […]
  • India’s run for a digital payment and banking system This study is aimed to examine the existing digital payment system and Indian banking and opportunity for Near Field Communication (NFC) POS machines market in Uttar Pradesh, India. On the basis of the market research it can be said the digital payment system in India is in its initial […]
  • Paytm’s growth in India as a digital payment platform Paytm a digital payment platform was launched in 2010 by One97 communication. It allows to transfer money into its integrated wallet by debit card, credit card and net banking. This wallet can be further used to make payments for recharge, bill payments and shopping (Unicorn 2016).

Discuss

We are looking for candidates who have completed their master's degree or Ph.D. Click here to know more about our vacancies.