An investigation of factors influencing e-commerce.

Author:Mamaghani, Farrokh

    The recent reports show that e-commerce has continued to evolve since 2001. The basis for the steady increase in e-commerce sales will be discussed later throughout the paper. The retail sector accounts for 78% of all e-commerce (Winters, Davie, Detlefsen, 2010). The Internet's evolution has been astonishing. Currently, the Internet is primarily a source of communication, information, and entertainment, but increasingly it is becoming a potential vehicle for commercial transactions. There is also the growing ease of accessibility to the Internet with wireless connections and mobile devices, anytime, anywhere.

    Table 1 shows the strong continuous growth of e-commerce. The data indicate strong presence of e-commerce "percent changes from the same quarter a year ago" in U.S retail sales. The percent change in e-commerce retail sales is well above total retail sales showing the future direction and growth potential of e-commerce.


    Studies indicate that people shop online for the convenience factor- being able to shop at any time of day virtually anywhere in which the Internet could be accessed. According to Rox (Rox, 2007). the following are the top reasons people shop online:

  3. It's always open

  4. To save time and multitask

  5. Easier to comparison shop and search for low prices

  6. Easy to find what you're looking for

  7. Additional product information and feedback is available for research

  8. Don't have to fight the crowds or weather

    According to a Nielsen Online Service online shopping's primary appeal is its convenience. The ability to shop anytime during the day was reported as the top reason people chose to shop online (81%), followed by saving time (77%), and the ability to comparison shop (61%) and find things easily (56%) (Rox 2007). Two of the lower ranked reasons for shopping online were low prices (46%) and low shipping costs (24%) (Bausch, McGiboney, 2007).

    The graph below is another indicator of how retail e-commerce sales, as a percent of total quarterly retail sales, has steadily increased from 2001 to 2010. The steady growth shows e-commerce's strong future prevalence in the retail sector.


    An aspect that may go unnoticed when determining factors that may influence online shopping behavior is generational differences. Generation differences in attitudes and ideas can impact purchasing behavior. Generation Y (those born between 1976 and 1994) were raised in a media-saturated and brand-conscious world (Lester, Forman, Loyd, 2006). The Internet is their most preferred medium of choice, and they are able to use it with ease. Generation Y will switch their loyalty in an instant to marketers who can manage to get ahead of the style curve. Their market savvyness and minimal susceptibility to brand images leaves marketers faced with a difficult challenge when attempting to appeal to this group. Consumers place high expectations on vendors when making a purchase. Vendors must be superior to other vendors in alternative shopping modes in order to be noticed and contacted by customers. Characteristics important in electronic transactions include (i) Reliability, (ii) Convenience in terms of services offered, and (iii) Perceived price competitiveness and easy access of information offered by Web vendors in comparison to alternative shopping modes.

    Reliability refers to a "willingness to rely on an exchange partner in whom one has confidence." If an e-tailer is perceived as honest, consistent, competent, fair, responsible and helpful, people will feel more confident in participating in electronic commerce. The perceived convenience of shopping includes time, space and effort saved by a consumer and ease of placing and cancelling orders, returns and refunds and timely delivery of orders (Swaminathan, Lepkowska-White, Rao, 2006). Perceived price competitiveness refers to the ease of obtaining price comparisons, which increases competition across suppliers. The endless source of information on the Web can enhance the experience with detailed product information and reviews (Swaminathan, Lepkowska-White, Rao, 2006).


    On the contrary, the Internet represents a unique selling medium that does not allow consumers to use their senses during...

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