The factors that influence e-consumers´ behavior while making an online transaction (página 2)

            Su et al. (2008) mentioned that apart from the absence of the ambience of a physical shop (such as temperature, lighting, and business equipment), the online retail environment also lacks person-to-person contact (pg. 360). Like traditional customers, e-consumers also feel the necessity of receiving high quality on their physical products and a personalized customer service online. According to Liao and Cheung, behavioral and attitudinal variables affect e-shopping. Internet experience and frequency of Internet use have a positive effect on buying online (qtd. in Farag et al., 2006, pg. 45). Farag (2006) maintains that a positive attitude towards e-shopping, such as the perceived quality of vendors on the Internet, also stimulates the use of the Internet for shopping purposes (pg. 45). So far, we have gathered from the e-commerce literature that the buying behavior and attitude of an e-customer may be negatively affected for reasons like lack of person-to-person contact, impersonalized customer service, low-quality on physical products purchased, and a poor perception of the e-sellers" Web site.

            Besides outcome quality and customer service, Su et al. (2008), found that process controllability, ease of use, information quality, and Web site design play an indispensable role to the provision of high-quality in e-commerce. However, Zeithml et al. (2002) concluded through extensive theoretical and empirical work that there has been a shifting of online customers. Although Web presence and low price were posited as the drivers of success in the early days of e-commerce, these features no longer guarantee success after years of development in this form of commerce (qtd. in Su et al., 2008, pg. 371). In summary, E-commerce services are facing many difficulties when trying to deliver quality signals to customers. For example, they have to start focusing more on delivering efficiently products and services, guarantee the quality of the goods, offer consumer service online but also offline (e.g., after-sales service, commitment, response to complaints), and invest in better and safer online transactions.

            One of the main challenges that e-sellers face is to provide trust to e-consumers. They need to help customers to safely engage in e-transactions over the internet and encourage trustworthy behavior among them. For this reason, some Web companies or e-marketplaces have been investing and refining reputation systems. Gavish and Tucci (2008) concluded that a reputation system help e-buyers to judge unknown and mysterious online customers, and then avoid or reduce internet auction fraud; for example, a recent study by Gregg and Scott (2008) has shown that reputation systems serve an important function in today"s online world. They can allow buyers to assess the trustworthiness of unknown online auction sellers and can be used by sellers to improve their customer service.

            The types of fraud a buyer can encounter when making a purchase at an online auction include: sniping (Holahan, 2008), non-delivery, misrepresentation, black market goods, fee stacking, triangulation, and shill bidding (Gregg and Scott, 2008, pg. 70).  Precisely, this kind of scams, plus some others like pishing, changing seller ID, location, and terms of contract after purchase (Gavish and Tushi, 2008, pg. 92) are the type of actions that are making e-buyers to run away from this market. In fact, a study sponsored by the U.S. FBI and U.S. National White Collar Crime Center showed that the online fraud has grown from around 20,000 in 2000 to around 200,000 in 2007, which represents a compound annual growth rate of 39% (qtd. in Gavish and Tucci, 2008). Basically, all the scams mentioned above undermine the expectations of e-consumers, and also destabilize the foundations of trust that customers have built online. Gregg and Scott (2008) reached the conclusion that information sharing, use of legitimate escrow services, develop of insurance policies, more control over the Web sites, and encourage visitors to protect themselves will help everybody to have an advantage over the electronic thieves.

            While gathering information for this review, it was found that several articles offer similar actions to increase consumers" perception about trust. For example, perceived usefulness, perceived ease-of-use, perceived security, perceived privacy, company competency, reputation, and willingness to customize are seeing by customers as fundamental when buying online (Kim and Ahn, 2006; Chen and Barnes, 2007; and Schlosser et al., 2006). It is also important to mention that several studies have been conducted to analyze the effect that privacy and security statements have over the customers" trusting beliefs; however, evidence on the effectiveness of such statements is contradictory. Whereas Palmer et al. (2000) argues that such statements help instill consumer confidence in e-commerce sites, others like Montoya-Weiss et al. (2003) and Sultan et al. (2002) suggest that they are not necessarily the most important predictor of online trust (qtd. in Schlosser et al., 2006, pg. 133).

            Another theoretical and empirical perspective regarding consumers" tendencies was presented by Hanton (2008). Specifically, he shows a push of internet consumers toward the Long Tail and market fragmentation. This push has likely been caused by the following factors: market saturation, the move to mainstream, improved education, and Web innovation (Hanton, 2008, pg.2). Again, as we have mentioned before, e-customers have been looking for more personalized and customized products and services. In other words, e-sellers must empower customers through a better listening of complaints and a better customer service; if not, e-buyers will keep moving forward to a more personalized and fragmented market. One thing is certain, if e-sellers do not invest more in taking care of the customers, e-consumers will keep moving toward niche markets or physical markets. In fact, Mandel (2008) maintains "The way America measures Web Commerce may be painting an overly rosy picture of the economy…U.S. e-consumers might be spending less than the numbers show" (pg. 28).

            Based on the analyzed literature, there are some points I believe need to be investigated in a deeper way. First of all, the fact that younger people (primarily buyers in their twenties and thirties) are the main internet users and a very savvy cluster, tell us that we need to better investigate their purchase behavior; managers who see them as group to be targeted, need to examine what are the steps to follow in order to keep them loyal to the brand. Younger consumers online is a very hard group to keep track of and maintain happy.

            Also, a subject worth of study is the Web site investment. Web site design plays such an important role in online purchase intentions. Instead of serving a purely aesthetic function, it signals that a firm"s ability can be trusted, which we found to be the most significant driver of searchers" online purchase intentions (Schlosser et al, 2006, pg. 144). However, this investment represents extra money, time, resources, and effort. Therefore, I suggest to investigate how much of the Web site budget is selected to improve things such as the order fulfillment department, privacy and security concerns, encryption of the page, and the firewall structure. In short, I believe some online companies may be spending a lot of money to just make-up the main page -elements that do not represent more security and trust to the e-consumer- instead of investing more for the benefit of the consumer.

This research also shows that many customers know about the danger of auctions and online transactions; however, they are willing to take the risk to save a few dollars. This topic is something that is worth study. Also, I think that little research has been conducted regarding the behavior adopted by e-customers after being cheated or swindled. Specifically, these subjects should be investigated because some e-buyers are "supporting" swindlers over the internet. What I mean, is that these customers are very prone to be victims of scams but they accept it, and they end up encouraging more and more people to use the Web as a scam tool. Finally, during this research it was found several theoretical and empirical studies about fraud and consumer behavior before being swindled; nevertheless, very few articles about consumer behavior and expectations after being swindled were found. We need to explore the ways that e-consumers are taking after the scam, and the mechanisms to be implemented in order to bring them back.

Management Question

How e-consumers perceive Quality and Trust when purchasing online?

Research Question

What factors of trust are modified on an e-consumer after being swindled online?

Hypotheses

H1: The decreasing number of online transactions is positively related to swindling experiences.

H2: Buying after a swindling experience is positively related to the brand name of the Web site.

H3: Repeating an e-transaction after a swindling experience is positively related to Web site design and investment.

H4: Privacy and security statements are positively related to swindling experiences.

H5: There are differences between the perception of trust and the socio-demographic factors.

Methodology

Target Population

Active online buyers who have been victims of any kind of internet fraud.

Sampling Frame

The sample group will be composed of active online buyers who use internet to make transactions. The participants will be chosen from an e-mail address list that will be acquired through a marketing internet company. This list must be updated and guarantee no duplicate emails. The cost of this list oscillates between US $40 and US $50.

Participants will be asked to fill-in a survey which defines if they met the selection criteria. The selected participants will be active online buyers with more than one year" internet shopping experience and have been victim of internet fraud. The surveys will be administered to the addresses in the database; this is done with the aim of selecting the target population that meets the criteria until achieve the required sample size.

·         Minimum Sample Size

p = in this sample, 0.28 represents the estimated proportion of e-consumers who have changed their habits of online shopping due to internet frauds.

q = on the other hand, 0.72 stands for the estimated proportion of e-buyers, who did not change their online buying habits after being victims of at least one fraud.

Z = the study wishes to have a 95 percent confident level.

E = the allowance for sampling error is not greater than 2.0 percentage points.

·         Sampling Technique

A Simple Random Sampling will be used to collect the data. This sampling technique is appropriate because it increases representativeness and ensures that each element in the population will have an equal chance of being included in the sample. Likewise, it requires minimum advance knowledge of the population and is less expensive than the stratified technique.

·         Primary Survey Method

E-mail survey sent through electronic method. The primary survey method will be a structured questionnaire that consists of a set of closed ended-questions, such as multiple choice, scales, and some dichotomous questions.

This method is appropriate for this study because is quick, inexpensive, flexible, efficient, and accurate. However, some of these e-mail surveys could not be responded because e-buyers may confuse it with spam e-mail. The reason of using closed-ended questions is because they take less time from the , the participant and the researcher; so they are a less expensive survey method. Generally, the response rate is higher with surveys that use closed-ended questions than with those that use open-ended questions.

Moreover, they are easier to analyze and can be more specific; thus they are more likely to communicate similar meanings. Unlike closed-ended questions, open ended-ones allow respondents to use their own words, but it is difficult to compare the meanings of the responses and coding the information.

Online Trust and Internet Fraud Questionnaire

This survey has been prepared with the aim of measuring the impact that internet fraud has over the perception of trust online. Please provide us the following information on your opinions concerning this topic. Your opinions and position concerning internet swindling are very important to us.  The information is completely anonymous and confidential, so please Do Not write your name on the questionnaire. Remember, there is no right or wrong answer.

If you have ever been a victim of online fraud, please answer the following questionnaire:

1.   Are you:      [1] Male            [2] Female

2.                  Are you:            [1] Single          [2] Married

3.   Date of Birth:   __________________                                  (Month / Day / Year)

4.    Are you:                 [1] American Indian

                                    [2] Asian or Pacific Islander

                                    [3] Black, African American

                                    [4] Hispanic, Latino

                                    [5] White, Caucasian

                                    [6] Other    __________________

                                                          (Please Specify)

5.    Nationality: (i.e.: United States, Brazil, Japan, etc.) ________________________

6.    Approximately, how many times have you been a victim of online fraud?  _____                                   

7.                  Please mark the type(s) of fraud have you been victim of: 

                                                                              ___ Non-delivery

                                                                              ___ Misrepresentation

                                                                              ___ Black-market goods

                                                                              ___ Hidden charges to the item

                                                                              ___ Stolen credit card information

                                                                              ___ Other, ________________________                                                                                                         Please specify

8.   Have you bought anything online after the swindling experience? If yes, go to question 10.

       [1] No    [2] Yes

9.   What is the main reason?

       [1] There is a feeling it will happen again.      [2] I prefer in-store shopping now.

       [3] Internet skills are not good enough                       [4] Other: __________________________                                                                                                                  Please specify

10.  One of the major reasons for the current lack of trust online is the inability of the e-        companies to develop a strong and secure environment?

       [1] Strongly Agree

       [2] Agree

       [3] No Opinion

       [4] Disagree

       [5] Strongly Disagree

11.  Indicate your attitude regarding the presence of a privacy and security statement before           buying online?

         Good:       [1]       [2]      [3]       [4]       [5]       [6]       [7]       : Bad   Important:       [1]       [2]      [3]       [4]       [5]       [6]       [7]       : Unimportant Acceptable:       [1]       [2]      [3]       [4]       [5]       [6]       [7]       : Unacceptable

12.  When is time to evaluate the Privacy and Security Statement online, I normally assess?

        [  ]  I do not evaluate this item         [  ]  I make sure there is a VeriSign Secured TM  logo in the Website         [  ]  I do not buy unless the Website uses PayPal TM  to make its transactions         [  ]  I need to see both of them (VeriSign Secured TM & PayPal TM)         [  ]  I look for different security patterns, _________________________________________                                                                                             Please Specify

13.  Did the brand name influence me to buy again after the fraud?

        [1] No   [2] Yes

14.  One of the major reasons for the current lack of trust online is the inability of the e-        companies to deliver a recognizable and trustworthy name, logo, slogan, and design scheme?

       [1] Strongly Agree

       [2] Agree

       [3] No Opinion

       [4] Disagree

       [5] Strongly Disagree            

15.  When engaging in an online transaction, what is your #1 issue in the decision to buy?

       [  ]  Brand name                                          [  ]  Website design & investment

       [  ]  Company size                          [  ]  All of them

       [  ]  Other, Please specify: ________________________________     

Preference Related Issues

Please indicate your agreement with each of the following statements by checking the category that best describes your feeling in the space provided.

25.   Rank the following four reasons for selecting a Web site to make a purchase from 1-4 with             1 being the most important and 4 being least important. Mark only item as 1, one item as           two, etc.

[   ] Web site design and investment                                [   ] Strong privacy and security statements                                 

[   ] Company size & Brand recognition                [   ] Customer service online/offline

Thank you for taking the time and effort to complete this questionnaire

Conclusions

1. The results obtained from this study will allow further optimization of privacy and security statements. Therefore, Web pages and e-vendors will take into consideration the perception of swindled e-customers to their own benefit.

2. In case the results show a positive relation between trust and Website design/investment, this study will help e-sellers to improve the online marketing strategies used to attract and keep customers loyal to the brand.

3. The results will help determine if an online recognizable Website, or a well-known brand name, is sufficient enough to motivate and influence e-customers who have been victims of fraud.

4. In the case the results show a positive relation between swindling and a decrease in demand for e-transactions, this study will definitely help e-companies to realize the harm that swindlers are doing to their businesses. Likewise, the presence of a positive relation will motivate e-vendors to plan better strategies to attack swindlers and to recover the trust of conned consumers.

Limitations

1.       One of the limitations I may find is that I could not reach the minimum sample size; or, on the other hand, reach it but with several defective samples that may not work at all.

2.       A lack of visual interaction between the interviewer and participant may cause an information bias. Because the size of the sample, I will not be available to help participants to solve specific questions in the questionnaire and that may cause the information bias to happen.

3.       Usually, the voluntary survey cooperation is low; therefore, it may be a problem for my study if some participants expect to receive a gift or stimulus in exchange for the information required. In fact, the delivery of the stimulus would be very expensive because the geographic position of the participants is very widespread.

4.       Another limitation I may find is the lack of computers with high-speed connections or software; therefore, the participants may get tired of answering or loading the information to e-mailing back, and they would stop answering it.

References

Farag, Sendy, Kevin Krizek, and Martin Dijst (2006), "E-Shopping and its Relationship with In-store             Shopping: Empirical Evidence from the Netherlands and the USA," Transport reviews,             26, (1), 43-61.

Gavish, Bezalel, and Tucci, Christohper L. (2008), "Reducing Internet Auction Fraud",               International Journal of Electronic Commerce, 51, (5), 89-97.

Gregg, Dawn G. and Scott, Judy E (2008), "A Typology of Complaints About eBay Sellers,"               International Journal of Electronic Commerce, Communications of the ACM, 51, 4, 69-74.

Hanton, Jamie (2008, June). "The Hyper-Personalized Business Model Trend." Retrieved July 7,                2008, from http://www.ecommercetimes.com/story/trends/63526.html  

Holahan, Katherine (2008), "eBay Auctions: Going, Going…" Business Week Magazine, June                    30, 52-53.

Kim, Myoung-Soo, and Ahn, Jae-Hyeon (2006), "Comparison of Trust Sources of an Online Market-               Maker in the E-marketplace: buyer"s and seller"s perspectives." Journal of Computer               Information Systems, 47, (1), 84-94.

Mandel, Michael (2008), "How Strong Is the U.S. Consumer?" BusinessWeek Magazine, July 14               &21, 28.

Schlosser, Ann E., White, Tiffany B., and Lloyd, Susan M. (2006), "Converting Web Site Visitors               into Buyers: How Web Site Investment Increases Consumer Trusting Beliefs and Online               Purchase Intentions," American Marketing Association, 70, 133-148.

Su Quinn, Li Zhao, and Ting Cheng (2008), "Conceptualizing Consumer"s Perceptions of             E-commerce Quality" International Journal of Retail and Distribution Management,                 36, (5), 360-374.

Yu-Hui Chen, and Stuart Barnes (2007), "Initial Trust and Online Buyer Behavior", Industrial              Management and Data Systems, 107, (1), 21-36.

Author

Andres Correa-Cortes

United States

2008