The internet has completely revolutionized the way people shop. While people may spend the same amount of time shopping today as they did 10 years ago, Americans are doing more of their shopping online, according to Federal Reserve Bank data for ecommerce sales. In fact, online sales accounted for around 16% of total sales in 2024, compared to around 6% in 2014. What hasn’t changed is our desire to save money while we shop. Luckily, there are more ways to save money while shopping than ever….Continue reading….
By: Matt Miczulski and Kristy Snyder
Source: FinanceBuzz
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As the revenues from online sales continued to grow significantly researchers identified different types of online shoppers, Rohm & Swaninathan identified four categories and named them “convenience shoppers, variety seekers, balanced buyers, and store-oriented shoppers”. They focused on shopping motivations and found that the variety of products available and the perceived convenience of the buying online experience were significant motivating factors.
This was different for offline shoppers, who were more motivated by time saving and recreational motives. English entrepreneur Michael Aldrich was a pioneer of online shopping in 1979. His system connected a modified domestic TV to a real-time transaction processing computer via a domestic telephone line. He believed that videotex, the modified domestic TV technology with a simple menu-driven human–computer interface, was a ‘new, universally applicable, participative communication medium — the first since the invention of the telephone.’
This enabled ‘closed’ corporate information systems to be opened to ‘outside’ correspondents not just for transaction processing but also for e-messaging and information retrieval and dissemination, later known as e-business. His definition of the new mass communications medium as ‘participative’ [interactive, many-to-many] was fundamentally different from the traditional definitions of mass communication and mass media and a precursor to the social networking on the Internet 25 years later.
In March 1980 he launched Redifon’s Office Revolution, which allowed consumers, customers, agents, distributors, suppliers and service companies to be connected online to the corporate systems and allow business transactions to be completed electronically in real-time. During the 1980s he designed, manufactured, sold, installed, maintained and supported many online shopping systems, using videotex technology. These systems which also provided voice response and handprint processing pre-date the Internet and the World Wide Web, the IBM PC, and Microsoft MS-DOS, and were installed mainly in the UK by large corporations.
The first World Wide Web server and browser, created by Tim Berners-Lee in 1989, opened for commercial use in 1991. Thereafter, subsequent technological innovations emerged in 1994: online banking, the opening of an online pizza shop by Pizza Hut, Netscape’s SSL v2 encryption standard for secure data transfer, and Intershop’s first online shopping system. The first secure retail transaction over the Web was either by NetMarket or Internet Shopping Network in 1994.
Immediately after, Amazon.com launched its online shopping site in 1995 and eBay was also introduced in 1995. Alibaba’s sites Taobao and Tmall were launched in 2003 and 2008, respectively. Retailers are increasingly selling goods and services prior to availability through “pretail” for testing, building, and managing demand. Statistics show that in 2012, Asia-Pacific increased their international sales over 30% giving them over $433 billion in revenue. That is a $69 billion difference between the U.S. revenue of $364.66 billion.
It is estimated that Asia-Pacific will increase by another 30% in the year 2013 putting them ahead by more than one-third of all global e-commerce sales. The largest online shopping day in the world is Singles Day, with sales just in Alibaba’s sites at US$9.3 billion in 2014. In 2018, 9.8% of all retail sales in the United States were made online. In 2019, that figure was 2.8% in Canada. In the United Kingdom, online sales peaked at 37.8% of all retail sales in January 2021, and were at 26.3% in January 2024.
Online customers must have access to the Internet and a valid method of payment in order to complete a transaction. Generally, higher levels of education and personal income correspond to more favorable perceptions of shopping online. Increased exposure to technology also increases the probability of developing favorable attitudes towards new shopping channels. In addition, age is also a significant factor that affects online shopping. People feel that privacy and security factors have an even more significant impact on attitudes toward online shopping than product factors.
Shoppers of different age groups have different perceptions of the risk factors of online shopping. The marketing around the digital environment, customer’s buying behaviour may not be influenced and controlled by the brand and firm, when they make a buying decision that might concern the interactions with search engine, recommendations, online reviews and other information. In modern shopping environments, people are more likely to use their mobile phones, computers, tablets and other digital devices to gather information.
In an online shopping environment, interactive decision may have an influence on aid customer decision making, through online product reviews and user-generated content, typically provided through software from companies like Bazaarvoice and Trustpilot, or via social media. This content, which can include text or video-based reviews, customer photos, and feedback, is often displayed alongside products being sold on websites like Amazon, Target, and most other digital storefronts.
Subsequently, risk and trust would also are two important factors affecting people’s’ behavior in digital environments. Customers consider to switch between e-channels, because they are mainly influence by the comparison with offline shopping, involving growth of security, financial and performance-risks In other words, a customer shopping online that they may receive more risk than people shopping in stores. There are three factors may influence people to do the buying decision, firstly, people cannot examine whether the product satisfy their needs and wants before they receive it. Secondly, customer may concern at after-sale services.
Finally, customer may afraid that they cannot fully understand the language used in e-sales. Based on those factors customer perceive risk may as a significantly reason influence the online purchasing behaviour. Online retailers has place much emphasis on customer trust aspect, trust is another way driving customer’s behaviour in digital environment, which can depend on customer’s attitude and expectation. Indeed, the company’s products design or ideas can not met customer’s expectations.
Customer’s purchase intention based on rational expectations, and additionally impacts on emotional trust. Moreover, those exp ectations can be also establish on the product information and revision from others.In several studies, perceived value, shopping style, and brand trust are the main factors that affect online consumers’ decisions. The perceived value means that people can compare the products and prices online, bringing them the perceived value of getting more benefits online than in an offline store.
The comfortable environment that online shopping brings to customers can make consumers get more perceived value. In the end, E-commerce behavior is still mostly influenced by families that are receptive to new technologies, and to a lesser extent by efficiency concerns. One of the great benefits of online shopping is the ability to read product reviews, written either by experts or fellow online shoppers. 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 the research, reviews on electronics (57%) such as DVD players, cellphones, or PlayStations, and so on, reviews on cars (45%), and reviews on software (37%) play an important role in influencing consumers who tend to make purchases online. Furthermore, 40% of online shoppers indicate that they would not even buy electronics without consulting online reviews first.
In addition to online reviews, peer recommendations on online shopping pages or social media websites play a key role for online shoppers when they are researching future purchases. 90% of all purchases made are influenced by social media.
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