Online Shopping and its Impact On Consumer Behavior

Chapter 1

ABSTRACT
The main goal of the paper is to obtain quantitative evidence describing the actuality of internet shopping , explain the development of internet shopping and its impact on consumer behavior. The paper builds on the relevant literature and at the same time examines consumer behavior by questionnaires. Furthermore, the future development of internet shopping will be measured, and a deep comparison of consumer behavior between online shopping behaviour and traditional consumer behavior is analyzed. To reach those objectives a co-integration analysis and quantitative research methods are used to identify all aspect of the internet shopping and impact on consumer behavior. The data results obtained revealed in the paper support the research questions that including recent trends and various issues of in internet shopping, and principal factors for consumer behavior. The paper, therefore, provides information for analyzing these research questions to conclude the status of internet shopping and its impact of consumer behavior among consumers. More specifically, the empirical results suggest how the Ecommerce company make marketing strategies according the research data and analyzing results.

Introduction
The internet is being developed rapidly since last two decades, and with relevant digital economy that is driven by information technology also being developed worldwide. After a long term development of internet, which rapidly increased web users and highly speed internet connection, and some new technology also have been developed and used for web developing, those lead to firms can promote and enhance images of product and services through web site. Therefore, detailed product information and improved service attracts more and more people changed their consumer behaviour from the traditional mode to more rely on the internet shopping. On the other hand, more companies have realized that the consumer behaviour transformation is unavoidable trend, and thus change their marketing strategy. As the recent researches have indicated that, the internet shopping particularly in business to consumer (B2C) has risen and online shopping become more popular to many people. Electronic commerce has become one of the essential characteristics in the Internet era. According to UCLA Center for Communication Policy (2001), online shopping has become the third most popular Internet activity, immediately following e-mail using/instant messaging and web browsing. It is even more popular than seeking out entertainment information and news, two commonly thought of activities when considering what Internet users do when online. Of Internet users, 48.9 percent made online purchases in 2001, with three-quarters of purchasers indicating that they make 1-10 purchases per year (2001, p.38). When segmented into very versus less experienced Internet users, the very experienced users average 20 online purchases per year, as compared to four annual purchases for new users (2001, p.38). Online shopping behavior (also called online buying behavior and Internet shopping/buying behavior) refers to the process of purchasing products or services via the Internet. The process consists of five steps similar to those associated with traditional shopping behavior (Liang and Lai 2000). In the typical online shopping process, when potential consumers recognize a need for some merchandise or service, they go to the Internet and search for

need-related information. However, rather than searching actively, at times potential consumers are attracted by information about products or services associated with the felt need. They then evaluate alternatives and choose the one that best fits their criteria for meeting the felt need. Finally, a transaction is conducted and post-sales services provided. Online shopping attitude refers to consumers. psychological state in terms of making purchases on the Internet. There have been intensive studies of online shopping attitudes and behavior in recent years. Most of them have attempted to identify factors influencing or contributing to online shopping attitudes and behavior. The researchers seem to take different perspectives and focus on different factors in different ways. For example, Case, Burns, and Dick (2001, p.873) suggest that internet knowledge, income, and education level are especially powerful predictors of Internet purchases among university students. according to an online survey of 425 U.S. undergraduate and MBA students. Ho and Wu (1999) discover that there are positive relationships between online shopping behavior and five categories of factors, which include e-stores. logistical support, product characteristics, websites. Technological characteristics, information characteristics, and homepage presentation. Schubert and Selz (1999) examine the quality factors of electronic commerce sites in terms of information, agreement, and settlement phases. They also review those factors related to e-commerce community. These studies have all made important contributions to our understanding of the dynamics of online shopping field. However, there is a lack of coherent understanding of the impact of relevant factors on online attitudes and behavior and an inconsistent identification of relevant independent and dependent variables. This makes comparisons of different studies difficult, applications of research findings limited, and the prospect of synthesizing and integrating the empirical literature in this area elusive. Li & Zhang/Consumer Online Shopping Attitudes & Behavior 2002 .Eighth Americas Conference on Information Systems 509 The objective of this paper is to synthesize the representative existing literature on consumer online shopping attitudes and behavior based on an analytical literature review. In doing so, this study attempts to provide a comprehensive picture of the status of this subfield and point out limitations and areas for future research.

Statement of the Problem

Online shopping of goods, both expensive and cheap, prevalent to much larger extent in recent years due to convenience, speedy transactions, saving time, attractive sales and promotional offers, etc., Despite these motivational factors, there are various transactional and non-transactional issues involved such as internet users being uncomfortable while giving their credit card number, personal information, etc., which act as deterrents. Online shopping is new, and it is at a nascent stage, and there are no hard and fast rules to live by. Consumers are slow in interest in online shopping. However, the future for internet shopping looks bright and promising. This is especially true in the context of consumers in tier-II cities, where the internet shopping is still new, and consumers are less familiar and often more skeptical towards it. Therefore this study aims to examine the characteristics of online shopping and its impact on consumer behavior.

Aims and Objectives

It is clear from the overview of internet and internet shopping development that ecommerce is being used in many corporations due to the dramatic development of technology and competitive advantages of web selling. Moreover, the expansions of the usage by individuals also become main contributors to the development of internet shopping. Relatively few studies have investigated in the internet shopping and impact on consumer behaviour. The previous studies are more focus on the markers point of view, such as how to establish a more efficient marketing channel online rather than the traditional offline channel. Therefore, this research will combines with previous studies from literature reviews, and focus on the impact of the internet shopping on consumer behaviours to find out a comprehensive analytical framework which showing the essential ingredient of marketing and business to satisfying the consumers needs, and a deeply understanding of online consumer behaviour as a reference for any e-commerce company to make marketing strategies. By carry out this work, the following research questions will be answered: To understand the concept of Online shopping. The impacts of factor of Internet shopping influence online consumer behaviours. Comparison of Offline Consumer Behavior(Traditional Cosumer Behaviour)with Online Consumer Behaviour Through analyze data collected from the questionnaire survey to indicate the current online consumer behaviours.

HYPOTHESIS
H0 :There is no significant relationship between factors driving Online shopping and online consumers. Ho1: There is no significant difference between age and attitude towards online shopping. Ho2: There is no significant difference between income and attitude towards online shopping. Ho3: There is no significant difference between occupation and attitude towards online shopping. Ho4: There is no significant difference between pattern of online buying (types of goods) and attitude towards online shopping. Ho5: There is no significant relationship between e-commerce experience and attitude towards online shopping. Ho6: There is no significant relationship between hours spent on internet and attitude towards online shopping. Ho7: There is no significant relationship between product perception and attitude towards online shopping. Ho8: There is no significant relationship between customer service and attitude towards online shopping.

Ho9: There is no significant relationship between consumers risk and attitude towards online shopping.

Chapter II

Traditional Shopping Behaviour

To study the consumer behaviour is very complex as it is a kind of human behaviour, and human beings are always not easily studied, understood and sometimes quite ambiguities. Therefore, the complexity of consumer behaviour represents a challenge to anyone who wants research the subject including marketers. From the concept of marketing, it is based on the notion of creating satisfying relationship between sellers and buyers. In this kind of exchange process, consumer is being an important partner to make requirements, and thus it is essential for marketers who want to possess an understanding of consumer behaviour in order to make marketing strategies (Malcolm).

Definition
According to Warner, consumer behaviour defines that the study of the mental and physical activities performed by individuals or groups that result in decisions or actions associated with the purchase, use or disposal of goods and services (Malcolm). Warner emphasized the consumption related behaviours are often undertaken collectively. Forexample, some activities performed by individuals but consumed by a family or group of people, similar as organization purchasing activities usually followed by group decisions. Beside this point, the consumer behaviour is not just purchasing, but has usage and disposal the goods, this type of information always be useful for company to make marketing decisions (Malcolm).

Perspectives
Traditional consumer behaviour shopping has its own model, which the buying process starts from the problem recognition, information search, evaluation of alternatives, then purchase, and at last post-purchase behaviour (Crawford, 1997). During these serials actions, the perspectives on consumer behaviour could be divided into two parts: Macro perspective and Micro perspective. Macro perspective mainly influences by modes of thought and deploy form of enquiry. Micro perspectives mainly include the decision theories (Malcolm).

Factors
The influences on consumer behaviour are often made between external and internal factors. External factors are come from the environmental conditions, and internal factors are usually from the consumers mind. There are many factors could influence consumers behaviours. According to Warner, the external influences could divide into five sectors: Demographics, socio-economics, technology and public policy; culture; subculture; reference groups; and marketing. The internal influences are variety of psychological processes, which include attitudes, learning, perception, motivation, self image, and semiotics (Malcolm). In addition to these, Sheth (1983) also suggested that the consumers have two types of motives while shopping, which are functional and nonfunctional. The functional motives are mostly about the time, shopping place and consumers needs, which could be like one-stop shopping to save time, the environmental of shopping place such as free parking place, lower cost of products and available to choose from widely range of products. The nonfunctional motives are more related with culture or social values, such as the brand name of the store. The traditional shopping is simply about the customer to purchase their needs. This behaviour will be influenced by the sellers advertising and promotion which attracts customers goes there and purchase goods, afterwards a part of new products will be taken home and be used.

Internet Shopping
Internet shopping and traditional shopping are sharing many similarities, at the same time, it still exists some differences between them, such as the Internet shopping could provide convenience and interactive services (Jarvanpaa and Todd, 1997), and the traditional shopping could gives customers more comfortable shopping environment and good quality of products (Lee and Chung, 2000). Both aspect of shopping malls are trying to improving their services by learn commutatively from each other, such as traditional shopping malls provide more parking spaces, more counters, and closer to residential area in order to improve services in convenience; Internet shopping malls adopt virtual reality (Lee, 2001) and 3D techniques (Miller, 2000) to improve the presentation of products. In the following sections, the study would provide the nature of internet shopping at first, then the E-commerce web site will be indicated to

comprehend the essence of internet shopping, after that, online security, privacy and trust will be discussed. All of these general overviews and discussions about the internet shopping will provide a background to the study and help to building the foundation of academic researches. Moreover, there will be a summary provided in the end of this chapter.

Nature of Internet Shopping

As mentioned above, the Internet shopping is another mode of shopping and it can provide customers with new experience. Therefore, the Internet shopping has its special nature to difference with traditional shopping. According to Miller (2000), the product and services for Internet shopping could be influenced easily by their type, and he also indicated four sources that could explain the nature of Internet shopping. In this section, the nature of Internet shopping will be discussed below with three main parts: convenience, technology, and product and price.

Convenience
Internet provides a big convenience for shopper as the main reason for they shopping online has been agreed by most of researcher and customers (Wolhandler, 1999). Due to the feature of Internet, it allows customer to shopping online anytime and anywhere, which means customer can browse and shopping online 24-hours a day, 7 days a week from home or office, which attracts some time-starved shoppers come to Internet for save time to searching products in physical store. Additionally, Internet offers some good ways to save money and time. For example, shoppers do not need go out to the physical store and thus there is no transportation cost. Compare with the traditional shopping, there is no waiting line for shoppers on the Internet, and some shoppers reported that they feel pressure from the sales people sometimes, but Internet offers them more enjoyable while shopping online (Wolhandler, 1999; GVUs WWW 9th User Surveys, 1998).

Technology
The convenience based on Internet is mainly according to the technology development, and which plays a key role during the development of Internet shopping. In the last decade, organisations have realised that the

new technology could impact on Internet shopping deeply, and thus there are many important technologies like virtual reality and 3D techniques have adopted to gain big competitive advantages (Clark, 1989). Information technology has used in the form of the Internet improved better quality of product information, which help shoppers decision making (White, 1997). Through the wide range of surveys about the Internet use, the growth of Internet and the rate of growth of Internet usage have been rapid increased in the last decade. According to the BMRB International (2004) and GVUs WWW 9th User Surveys (1998), the number of Internet users in Great Britain has increased to 22.7 million among 48.4% of the adult population, and about 53% of Internet users have reported that shopping is a primary use of the Web. Moreover, a statistical report on the Internet Development inChina from CNNIC (China Internet Network Information Centre) have released in July 2006. From this report, in the aspect of Internet shopping, there are 30 million users often shopping online, and near 1/4 Internet users have online shopping experience. Both surveys shows that more and more Internet users prefer online payment while they shopping, thus the security of online payment certainly will become a significant factor to influence the Internet shopping. The provision of the security is becomes the highest or almost the highest budget in the service development of Internet retailer. As this kind of technology is quite complexity and costly for Internet retailer develop by them own, therefore, they usually ask for professional security service provider to check their E-commerce web site, and get the verify or certificates from the provider like VeriSign, in order to let shopper knows that shopping on Internet is very safely. Another Internet technology has adopted for improving the Internet environment is developing a virtual community. As Yoo W., Suh K. and Lee M. (2002) mentioned in his report, personal interactions with other customers and service providers play a very important role while shopping online. Because of the feature of Internet, customers can not check the products and service carefully, almost all of trade between sellers and buyers are through a virtual world, and people can not meet each other directly, therefore, the Internet retailers offering not just products or services but also a nice and efficient interface for interactions with customers, and which could increase the happiness of customer to shopping online and let them gain new shopping experience.

Product and Price

The Internet allows consumers to browse products or services extensively, search the newest products or services information, check and compare prices among all of the offers, and make/change orders instantly and easily. These allowable activities offer another way of convenience to consumers. For browsing the products/services, consumers only need to do is open a browser and exploring the shopping sites, which gives them more pleasure to seeking out the new information about the products and services than searching in physical stores, even some of them did not actually buying anything, but they still gain a new kind of shopping experience (Punj and Steelin, 1983). Moreover, the web based contexts can easily and flexibility show the inventory of some niche products, and thus shoppers could looking for it by search through a large scale of product database. For some products, such as books and CDs, which shoppers are already known the quality, and that means the less quality concern for shoppers purchase it from online. Therefore, if the brand name and equity of products or services have embedded in shoppers mind, that means this products or services are more amenable to web based marketing. According to the research by Bulkely and Carlton (2000), the majority of Internet shopping behaviours consist of one-time purchases, which is mainly according to consumers different shopping motivations, such as convenience. Therefore, the Ecommerce shopping websites need improve their services or reduce the cost of products in order to motivating these onetime purchase shoppers to become loyal and regular consumers. In the aspect of costs, the E-commerce shopping websites have their strength than physical store, as they can remove the middle marketers (brokers, distributors), and that the lower warehousing cost and distribution expense can be added to online retailing channels for reducing the marketing price, which could greatly attract the price-sensitive shoppers come and purchase. E-commerce Web Site According to Zwasss (1998) definition for Electronic commerce is the sharing of business information, maintaining business relationships, and conducting business transactions by means of telecommunications networks . For doing business, the Internet provides a lot of technologies to enhance the E-commerce. For example, for the aspect of the sharing of business

information, the Internet provides shared databases (such as the databases of books have been shared among all of the publishing company in the US); email, web based forum, electronic data interchange (EDI) and other software couldincrease the interactions with customers and business partners, and also conducting business transactions much easier and more efficiently. The Internet mad the world become smaller and closer, and it becomes very popular in the peoples life. From the firms view, as the Internet makes much easier to running an online business for firms, and the associated costs will be decreased in some ways, thus that strength of the Internet attracts firms to enter this new marketplace. On the other hand, actually there are some problems are exist in the international market, and some of this are not fully solved, such as the currency, taxes and tariffs. Despite those problems, the adoption of E-commerce for Business Company could gain more advantages than disadvantages. There are three components in the E-commerce processing: sellers & buyers, products & services, and E-commerce web site. Each component plays a key role in the Internet shopping. The advantages of E-commerce could be divided into four sides: cost reduction, revenue expansion, time reduction, and relationship enhancement (Swahney and Zabin, 2001). The Ecommerce can be essential complementarities for the firms as the store rents and the cost of for sales staff can be greatly reduced by transferring physical store to online, beside this big cost for traditional firm, the Internet also provides many applications (e.g. email) to reduce the costs, such as printing and mailing cost, and web based advertising can lead to small expenditure. By the reduction of costs, the firm canprovides much cheaper products and services to attract more customers, and thus it can helps firm increase the revenue expansion. For the time reduction side, as the traditional store have difficult and very costly to update the products information, but the online information is all the time updated, and the interaction between service staff and customers and instant feedback to customers could be mad possible, in other words, these activities improve the relationship with customers indirectly, and also the enhanced interfaces and operational functions. There are two types of E-commerce web sites: Business to Business Electronic Commerce (B2B) and Business to Customer Electronic Commerce (B2C). B2B is commerce where business activities between companies through web site channel. B2C is commerce where the purchase and sale transactions between the consumers and sellers (Lee H., Cho D. and Lee S.,

2002). The Internet retailers can both have B2B commerce and B2C commerce as they can use B2B commerce to link directly to their suppliers and use B2C commerce to sell products and services to individual consumer through Ecommerce web site. The B2B commerce and B2C commerce have some similarities, such as they both use electronic payment systems, and facing the lack of trustiness between both sides. Even there are some challenges exist for doing E-commerce, but it is the trend that the Ecommerce is an indispensable constitutes for firms while they are doing business.

Online Security, Privacy, Trust and Trustworthiness

Compare with the in-store shopping, the internet shopping has much higher risks during the purchasing process. As internet shopping is one of the non-store shopping formats, others such as mail order (Spence, 1970), telephone shopping (Cox and Rich, 1964), catalogue (Reynolds, 1974) and so on, which have proved by recent studies shown that consumers perceive a higher level of risk. Even though the internet provides many functional advantages, but it still have some disadvantages, such as in the sections of security, privacy, trust and trustworthiness.

Security
Due to the characteristics of internet, the information across the web could be lost or stolen quite easily, especially the customers personal information and monetary details. In B2C E-commerce area, there are many web merchants are offering third-party privacy and security protection, such as encryption and password protections. The web merchants like TRUSTe provide a third-party verification program for their customers, once a Internet retailer joining the program, there will be a seal offered by TRUSTe shows that their commitment to security. Therefore, because of the third party verification, the customers considered this seal could make them more confident to provide their information to the site. Even some websites have secured certified by professional organisation, but still have some customers lost their money through internet every year. These financial risks are mostly caused by customers themselves. The reasons could be widely, some customers have apparent sense of using credit card online in the insecurity way, such as public credit card details to unknown people or website, leave credit card in the public place where other people can easily reach, and internet shopping on the computer with virus. In the Maignan and Lukass

research (1997) shows that the financial risks have been cited as a main reason to stop internet shopping, and security has become a major concern both in online transaction relationships (Rowley, 1999). The security treats can be made through the network and data transaction, and also through unauthorized use. Thus, the Internet retailers have responsibility to keep monetary and personal details of customers safety during the process of online shopping. To improve the effectiveness of the Internet shopping environment could benefit both sellers and buyers and make much convince to the customers.

Privacy
Another type of risk that consumer will faced is psychological risk, such as disappointment and frustration of shopping online, which is mainly caused by the privacy information lost. On the Internet, the privacy information could be tracked and collected, and then it can be used to sharing with third parties, in order to send spam mails or emails. The Federal Trade Commission (FTC) has statutory authority to prohibit the web site to acquire information by unfair and deceptive trade practices (Earp and Baumer, 2001); however, it does not have ability to comprehensively control every activity among the Internet. According to Earp and Baumers research, because of the lack of legal remedies, this implies electronic customers should be aware of privacy risk and it could affect customers obstacle to shopping on the Internet. Moreover, it also leads to customers more carefully to decide what kind of information will be revealed online, and to which web site. From the survey results, most of customers willing to reveal their gender and ages, and 18% of respondents willing to provide credit card details to well-known web site while only 3% of respondents indicated willingness to provide the same information to lesser-known web sites. Moreover, web site that has privacy statement and third-party verification could reduce some customer concerns, but the evidence is not strong. Overall, customers are being very carefully to reveal their personal information since the legal environment of Internet is uncertain.

Trust and Trustworthiness

Mayer, Davis, and Schoorman (1995) defined trust as, the willingnes s of a party to be vulnerable to the actions of another party based on the

expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party (p.712) (Cheung and Lee, 2006). This definition is widely recognized and the most frequently cited (Rousseau, Sitkin, Burt, & Camerer, 1998). People purchase products and services are the most based on their level of trust in this product or services, and sellers either in the physical store or online shops. Online trust is the basic and essential element for building a relationship with customers. A present research shows that online trust is lower level than the face-to-face interactions in the physical store (Cassell and Bickmore, 2000), and the result from Cheung and Lee (2006) shows that trustworthiness of Internet merchant (perceived integrity, perceived competence, and perceived security control) and external environment (thirdparty recognition and legal framework) have considerable impact on consumer trust in Internet shopping (see figure 1). The trustworthiness of Ecommerce web site is very relying on the how much privacy security can be provided. For example, a highly technical competence can be a factor to influence the trustworthiness (Singh and Sirdeshmukh, 2000). As mentioned above that the web merchant can provide third-party verification to Ecommerce web site, and while this privacy and security strategies are used, customerswill think their E-commerce transactions through Internet are secure and thus the site is more reliable to them. Beside this point, if the Ecommerce web site can provide the information about their customer services, location of the office, contact telephone number, and a help button on the web site, customers could also increase their trustinessas they can feel that the online retailers is truly exist (Lohse and Spiller, 1998).

An Integrative Model of Consumer Trust in Internet Shopping In summary, the Internet offers a new way to do business and gives fresh shopping experience to customers. So far, there are many rules and conventions need to be improved to fit the online environment. For instance, the security must be ensured thatthe transactions on the Internet are safe; the privacy must be protected by the web sites; and the trust transference programs are needed to help engender customer trust in the Internet shopping environment. Online Consumer Behaviours As the traditional shopping behaviours are also could be transferred to internet shopping behaviour. Therefore, this chapter will pick some points of view in association with consumer behaviour that mentioned above and together with other ideas to have a deeper discussion. The current status of studies of online consumer behaviours is investigated through an analysis of existing literatures as background studies of consumer behaviours in order to understanding of the dynamic of online shopping field. After the consumer

behaviour background examined, the shopping motivation of consumers and decision making process are considered to be separate into two sections in this study.

Consumers Online Shopping Attitudes and Behaviours

Since the explosion of the World Wide Web in the 1990s, relative Electronic commerce has been developed rapidly, and it has become an essential characteristic in the Internet era. According to UCLA Centre for Communication Policy (2001), Internet shopping has become the third most popular Internet activities, immediately following email using and web surfing (Li and Zhang, 2002). Online consumer behaviour is complex and can be described as the process of purchasing products or services via the Internet, and Kardes 1995:5) suggested consumer behaviour is the study of human responses to products, services, and marketing of these products and services. As Liang and Lai (2000) indicated in their research that this process have similarities with traditional shopping behaviours. During the process of Internet shopping, the potential consumer recognized a need for products or services, and then, they use Internet for searching related information. If the information search result can meet their needs, the

potential consumers evaluate alternatives in order to choose one of the best products or services, and final purchase is made and following with postpurchase evaluation. According to Li and Zhangs (2002) taxonomy that developed based on their analysis, there are ten impacts of relevant factors on online consumer behaviours. These ten factors could be categorized into five independent variables (external environment, demographics, personal characteristics, vendor/service/product characteristics, and web site quality) and five dependent variables (attitude toward online shopping, intention to shop online, decision making, online purchasing, and consumer satisfaction). The five independent variables are identified as antecedents, which directly determine attitudes towards online shopping. In the antecedents, the vendor/service/product characteristics and web site quality are directly impact on consumer satisfaction. The figure clearly shows that the antecedents, attitude, intention, decision making, and online purchasing are series of processing stage. Consumer satisfaction is separated and occurs among at all possible stages depending on the consumers involvement during the Internet shopping process, and this two ways relationship could influence each reciprocally. There are many studies of online consumer behaviours in recent years, most of them focus on the factors influencing the online consumer behaviours, and the researchers seems to find different factors in different way. Moreover, there is a variety of studies which focus on comparisons between online and offline consumer behaviour in relation to different products has been presented. Consumer behaviour difference within online and offline shopping are mainly because of consumers attitude and interest. Consumers often use the Internet search for product information before buying from online or offline stores. According to Anfusos research (2004) , the online research drives the offline sales. The study shows that the Internet plays a role as a consumer product information utility more than its role as a direct selling medium. Consumers use online product research, and then spending in the offline. Thus, the study found that Internet influenced offline spending is now growing faster than direct online spending, in other words, consumer still prefer shopping in offline store than buying from the Internet. Compare with convenience of the Internet provided, online consumers could easily go for research products. However, for offline consumers they may go into a store simply to research products, but not over and over.

Moreover, many online visitors window shop more than impulse buy. The research shows that the internet has become a useful tool for comparison shopping and users often click around various sites to view and compare products, proceed to leave the site altogether, and then, possibly, return days later to purchase a product, or they might buy locally (Degeratu, Rangaswamy and Wu, 2000). Furthermore, online consumer might do this repeatedly, but the offline shoppers would be less likely to do research products very often. Therefore, the Internet shopping allows consumers more freedom to continuously visit and purchase products, even they leave without a purchase (Wolfinbarger and Gilly, 2001).

Shopping Motivation
It is true that the E-commerce is increasingly adopted by business organisations, and there also have many evidences to prove that the online shoppers become much more active than before. Through the E-commerce web sits provide superior products and services and interactive communication with online retailers, customers feel more about values, and thus these beneficial offers from the Internet may turn into motivation for customers active or arouse their needs. Pittman (1998) defines a motivation as the activation of internal desires, need and concerns which energize behaviour and send the organism in a particular direction aimed at satisfaction of the motivational issues that gave rise to the increased energy (Mallalieu, 2000). According to Perners research, there are several perspectives on behaviour as a way to understand what motivates the consumers: (1) the hard core behavioural perspective is based on learning theories like operant and classical conditioning; (2) the social learning perspective, which allows for vicarious learning; (3) the cognitive approach emphasizes consumer thinking rather than mere behaviour; (4) the biological approach suggests that most behaviour is determined by genetics or other biological bases; (5) the rational expectations perspective is based on an economic way of looking at the World; (6) the psychoanalytic perspective is based on the work of historical psychologists (Perner). All of the perspectives help to explain the motivation of consumers in which the customers do the shopping, and the major study in this research is related to the rational expectations perspective. In addition, through understanding of the motive for online shopping can facilitate the

comprehension of consumers attitudes, intention and consideration. Thus, the following section Decision Making Process will be discussed about the factors that impact on consumer behaviours.

Decision Making Process

Decision making process is the cognitive process leading to the selection of a series of actions among multiple alternatives. Every decision making process will have the final choice which called decision, and it can be an action or opinion. In this study, we mainly talk about the consumer decision making processes, which are the decision making processes undertaken by consumers in regard to before, during, and after the purchase of a product or service (Wikipedia, 2006). According to the Wikipedia web site (2006), there are three ways of analysing consumer buying behaviours in general. They are: l Economic models These models are largely quantitative, and they are most relying on the assumptions of rationality and close perfect knowledge. In these models, the consumer is seen to maximize their utility, and some theory such as game theory can be used in some circumstances. 2 Psychological models These models are qualitative rather than quantitative, and they concentrate on psychological and cognitive processes such as motivation and need reduction. Moreover, these models build on sociological factors like cultural influences and family influences. l Consumer behaviour models These models typically blend both economic and psychological models, and which are practical models used by marketers usually. In the recent of researches, it suggested that there is a five-stage decision making process for consumer to go through in any purchase (see the diagram below).

The consumer decision making process and its five stages. Source from: guuui.com When people buy things, they will engage in a decision making process. Thus this model is important for anyone who making marketing decisions to consider the whole buying process rather than just the purchase decision. The current research shows that one of the major problems of Ecommerce web sites is that they fail in supporting the customers in this process (Olsen, 2003). By understanding the customers needs and concerns as they process the decision making cycle, marketer can provide better products and services. The model has five stages in the whole process, but it does not means that the customers need to pass through all stages in every purchase. In some cases, the customers often skip or reverse some of the stages. For example, a customer buying a favourite food would recognise the need, so he/she can skip the information search and evaluation, and just go right to the purchase decision. Moreover, the complexity of the decision making process can rage from careful analysis (rational) to pure impulse (emotional), like the example above, the impulse buy can take place instantaneously, but the complexity purchase always take long time to analysis. Furthermore, this buying decision making process is iterative process, where people collect information from d ifferent sources and repeatedly return to re-evaluate and compare the information they have found (Olsen, 2003). According to the researches from the usability consultancy UIE, the online buying decision making process can be acts as a sieve, where customers are filtered out through the each stage of the decision making process. From the figure below, there are 17% of customers are filtered out at the information search stage. In this percentage, there are 9% of customers werent able to find the products which they were looking for, and there are

8% of customers who find the right products but gave up at the end due to lack of information to identify final purchase. For the customers who want to evaluate their product alternatives, there are 25% of customers are filtered out due to some reasons: firstly, some stopped because there is none of the products can fit their needs; secondly, it is because the information of products was not enough to tell them that products are in satisfied their need. At the purchase stage, there are 12% of customers lost due to the inconvenience or disappointed by the Ecommerce web site services. Again, there are 12% of customers have problems in the purchase evaluation stage. These customers are unhappy with the product that they purchased from online as some of them got the wrong products, some found the product was not what they expected, and extremely some customer did not receive the product at all.

Figure 4. Results from UIE. Source from: guuui.com Need Recognition The decision making process starts with need recognition. At this stage, the customer recognizes a need or responds to a marketing stimulus. Therefore, the Internet can provide huge amount of information for marketers utilize to stimulate consumer needs. For the online retailers, they have to do some researches in order to learn which customer needs and concerns they

have when making purchase decision, and that could help them to support the customers decision making process. There are many ways to understand the customer needs: one effective and economical method is to collect information from salespersons that are in contact with customers very frequently; another way is through interviews with customers and observations their shopping behaviors in order to gain information. Moreover, online retailers can use advertising online/offline and web site promotions to attract customers come and consume. Besides this, if there is email list and those customers on the list have accepted subscribe to received information of new products and related offerings, which will also be useful to trigger need recognition (Mae et al., 1999).

Information Search
When the customers recognized a need, then they have to decide what and how much information is required. If there is enough information of products or services they got recently (which mainly according to their shopping experience), and that also meets the need close to hand, then the final purchase is likely to be made. Otherwise, there is information search process starts. After the customers start looking for information, there are many ways for customers to obtain new information. According to Tutor2u web site, it suggested four different sources: Personal sources: family, friends, neighbours etc Commercial sources: advertising, salespeople, retailers, dealers, packaging, point-of-sale displays Public sources: newspapers, radio, television, consumer organisations, specialist magazines Experiential sources: handling, examining, using the product Although there are many different sources help consumer to make purchase decisions, but consumers still have to make decisions on: 1. whether they will search information through offline channels or the Internet; 2. whether they will search information through the Internet and then buy through offline channels; 3. whether they will search information through offline channels and then buy through the Internet; 4. use the Internet for both information search and product purchase (Moon, 2004).

As the Internet has one of the main competitive advantages which is the ability to collect as much products information as possible and makes all of the products can be compared among the different providers, therefore it plays a key factor to attract customers using the Internet as the first choice for information search. According to the UIE study is that the usability problems have exist in the design of the sites, such as customers could not find product and unable to process the checkouts (Olsen, 2003). Therefore, online retailers should provide detailed product information and ease use of shopping interface in order to be able to support the customers decision making process. Besides the factors from the online retailers, consumers have their own characteristics which impact on the decision making process, such as their proficiency or knowledge. The extensive research shows that customers prior knowledge and experience of using Internet can influence the information search result (Brucks, 1985). Moreover, Han (1996) also examined that the internet usage skill and familiarity with computers can affect consumer information search through the internet. With the development in information technology, more and more customers use a range of search techniques for information search. Search engine is the major and useful tool to support information search, which covers most likely the entire E-commerce web sites and produce hyperlinks to every sites which in association with products. Furthermore, some customers prefer the internal search facilities while they shopping online, which will increase the effectiveness of web site and also influence the consumers decision making process.

Evaluation of Alternatives
Once the customers obtained enough product information and then gained a number of possible alternatives, they must choose between the alternative brands, products and services in the evaluation stage. There is one important determinant of evaluation of alternatives is whether the customer perceived relevance of product, which are mainly according to the price and potential risks. The online customers not only compare product and price, but also need to consider the potential risks such as payment security. For the product and price, the online retailers need to differentiate the products that they were offering, and offer a competitive price or added other values into

products such as lower cost of delivery. However, for the less price sensitive customers who more likely to purchase good quality product if the online retailer can improve the shopping interface and provide high quality information. For the potential risks, the online retailers can build more interactions between them and customers for increasing the consumer trust, and also need to employ some security controls during the payment transactions in order to reduce the risk. Moreover, a well deigned community which allows interactions between customers by leaving comments or opinions will also helps customer evaluate their alternatives.

Purchase
At this stage, the emphasis should be on providing the secure online payment and the easies possible way for the customers to go through their orders. The recent research discovered that 2/3 of all online purchase processes are not completed at the end (Wolfmbarger and Gilly, 2001). There are many reasons for that: the first one is some required registration and poor shipping charge policies made customers leave; secondly, many customers could not find the information needed to complete the purchase; and some customers even did not find the way to checkout. In order to solve these problems, some well known web sites built a large and well staffed team to help customers during the purchase process, such as the Amazon did. Furthermore, the online retailers have to offer a wide range of electronic interactivities in order to serve customers efficiently. For example, the contact email address, instant message based on web, and frequently asked questions (FAQs) about shipping, payment, and return policy can be added in the design of Ecommerce web site.

Post-Purchase Evaluation
The final stage is post-purchase evaluation of the decision, which results in a level of customer satisfaction or dissatisfaction. The postpurchase evaluation is common for customers to experience concerns, and which is determined by the customers overall feelings about the product after making a purchase decision. If the products or service meet the customers requirement, then they may fell more comfortable and thus may purchase again in the future. However, some customers after bought a product, they may feel that an alternative would be much preferable, thus they will not re-purchase the product and may switch to other brand next

time. If the customers got dissatisfaction with the product as it does not meet their expectations, the product will be returned to online retailer. In order to manage the post-purchase evaluation stage and avoid the product to be returned, the online retailers with the marketing team to persuade the potential customers that the product will satisfy their need. Therefore, the customers will be encouraged that they have made the right decision after having made a purchase.

Online shopping and traditional shopping

Future research avenues for comparing online shopping with traditional shopping, After identifying the factors that affect consumers attitude and intention to shop online and placing them in our proposed framework, the next step is to investigate the differences, similarities, advantages and disadvantages of Internet shopping compared to shopping in brick-andmortar stores, so-called traditional or real world shopping. Current retailing trends show a shift from traditional store-based retailing to an increased use of the Internet (Keen et al., 2002). In the past few years, many businesses have faced the challenge of incorporating e-commerce into their repertoire of services in order to serve their customers 24/7. However, in establishing an online presence next to their existing physical stores, retailers encounter the difficulty of not being able to use the same format for both online and traditional stores. Although online shopping incorporates many of the same characteristics as real world shopping (Chen and Leteney, 2000; Lohse and Spiller, 1999), consumers are in a different frame of mind and have different informational needs when shopping on the Internet or the traditional way (Burke, 2002). Therefore, it is important to first identify the analogies and differences between traditional shopping features and features of online shopping before setting up a format. Second, retailers have to be aware of the advantages and disadvantages of online shopping compared to traditional shopping to understand consumers motives to choose one channel over the other. Lohse and Spiller (1999) set up a table to provide an overview on how the features of a brickand-mortar store relate to an Internet store. In Table I we have translated these store-features to features relating to online and traditional shopping. The table shows that all traditional shopping features are also present in

online shopping, but in most cases in a somewhat different form and not always on a level satisfactory to consumers. For instance, Internet shoppers are not able to gain the experience they usually get when shopping the traditional way, e.g. interacting with a Online shopping salesperson, feeling the atmosphere, and touching or trying the merchandise (Li et al., 1999). In cases where these features are specifically important to consumers, they will choose to engage in traditional shopping over online shopping. Nevertheless, Internet shopping fulfills several consumer needs more effectively and efficiently than conventional shopping (Grewal et al., 2002; Chen and Leteney, 2000; Haubl and Trifts, 2000; Alba et al., 1997). First, with online shopping, consumers can browse the entire product-assortment with minimal effort, inconvenience and time investment. Second, consumers can efficiently obtain critical knowledge about firms, products and brands, and thereby increase their competency in making sound decisions while shopping. Third, consumers can easily compare product features, availability, and prices more efficiently and effectively than with brick-and-mortar shopping. Fourth, Internet shopping provides a level of anonymity when shopping for certain sensitive products. Fifth, online shopping offers a high level of convenience for those whose time costs are perceived to be too high to invest in conventional shopping (Grewal et al., 2002). In our opinion, online shopping is not just another way of shopping that provides consumers with the same outcome at the end of the process as, for example, with traditional shopping. Indeed, online shopping provides consumers with added value, but can also withhold them from certain Traditional shopping Salesclerk service Online shopping Product descriptions, information pages, gift services, search function, clerk on the phone/e-mail

Sales promotion

Special offers, online games and lotteries, links to other sites of interest, appetizer information

Store window displays Store atmosphere

Home page Interface consistency, store organization, interface and graphics quality Featured products on hierarchical levels of the store Screen depth, browse and search functions, indices, image maps Hierarchical levels of the store Number of links to a particular online retail store Online shopping basket and/or order form Limited to image quality and description, potential for sound and video applications Number of unique visits to the online retail store Sales per period

Aisle products

Store layout

Number of floors in the store Number of store entrances and store outlets/branches Checkout cashier

Look and touch of the merchandise

Number of people entering the store Sales per period

Source: Lohse and Spiller (1999) sources of value. As an illustration of this concept, we take the example of e-banking: by using online banking for making transactions or checking their account balance, consumers save time because they dont have to go to the banking office in person during or after working hours. The precious time they save by e-banking provides them with the opportunity to spend this time

on other activities like, for example, sports, leisure, and family and thus create added value through online banking. However, this process also withholds them from sources of value they would get when going to the banking office in person, e.g. the social value of personal contact with banking employees and other clients of the bank. Thus, there are several reasons for consumers to prefer Internet shopping over real world shopping. However, even though these advantages may lead some consumers to prefer online shopping, they are not necessarily choosing one shopping channel over another. Instead, consumers are shopping wherever and whenever it is convenient to them, whether by store, catalog, or Internet (Cyr, 2000). Todays consumers are multi-channel shoppers, and some occasions prefer traditional off-line shopping to shopping on the Internet.