
Online shopping is a form of
electronic commerce
E-commerce (electronic commerce) refers to Commerce, commercial activities including the electronic buying or selling Goods and services, products and services which are conducted on online platforms or over the Internet. E-commerce draws on tec ...
which allows
consumers
A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. Th ...
to directly buy
goods or
services from a seller over the
Internet
The Internet (or internet) is the Global network, global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a internetworking, network of networks ...
using a
web browser
A web browser, often shortened to browser, is an application for accessing websites. When a user requests a web page from a particular website, the browser retrieves its files from a web server and then displays the page on the user's scr ...
or a
mobile app
A mobile application or app is a computer program or software application designed to run on a mobile device such as a smartphone, phone, tablet computer, tablet, or smartwatch, watch. Mobile applications often stand in contrast to desktop appli ...
. Consumers find a product of interest by visiting the
website
A website (also written as a web site) is any web page whose content is identified by a common domain name and is published on at least one web server. Websites are typically dedicated to a particular topic or purpose, such as news, educatio ...
of the retailer directly or by searching among alternative vendors using a
shopping search engine, which displays the same product's availability and pricing at different e-retailers. customers can shop online using a range of different computers and devices, including
desktop computer
A desktop computer, often abbreviated as desktop, is a personal computer designed for regular use at a stationary location on or near a desk (as opposed to a portable computer) due to its size and power requirements. The most common configuratio ...
s,
laptop
A laptop computer or notebook computer, also known as a laptop or notebook, is a small, portable personal computer (PC). Laptops typically have a Clamshell design, clamshell form factor (design), form factor with a flat-panel computer scree ...
s,
tablet computer
A tablet computer, commonly shortened to tablet, is a mobile device, typically with a mobile operating system and touchscreen display processing circuitry, and a rechargeable battery in a single, thin and flat package. Tablets, being computers ...
s and
smartphone
A smartphone is a mobile phone with advanced computing capabilities. It typically has a touchscreen interface, allowing users to access a wide range of applications and services, such as web browsing, email, and social media, as well as multi ...
s.
Online stores that evoke the physical analogy of buying
products or services at a regular
"brick-and-mortar" retailer or
shopping center
A shopping center in American English, shopping centre in English in the Commonwealth of Nations, Commonwealth English (see American and British English spelling differences#-re, -er, spelling differences), shopping complex, shopping arcade, ...
follow a process called
business-to-consumer
Direct-to-consumer (DTC or D2C) or business-to-consumer (B2C) is the business model of selling products directly to customers and thereby bypassing any third-party retailers, wholesalers, or middlemen. Direct-to-consumer sales are usually transa ...
(B2C) online shopping. When an online store is set up to enable businesses to buy from another business, the process is instead called
business-to-business (B2B) online shopping. A typical online store enables the customer to browse the firm's range of products and services, view photos or images of the products, along with information about the product specifications, features and prices. Unlike physical stores which may close at night, online shopping portals are always available to customers.
Online stores usually enable shoppers to use "search" features to find specific models, brands or items. Online customers must have access to the Internet and a valid
method of payment in order to complete a transaction, such as a
credit card, an
Interac
Interac is a Canadian interbank network that links financial institutions and other enterprises for the purpose of exchanging electronic financial transactions. Interac serves as the Canadian debit card system and the predominant funds transf ...
-enabled
debit card
A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either ...
, or a service such as
PayPal. For physical products (e.g., paperback books or clothes), the e-tailer ships the products to the customer; for
digital products, such as
digital audio files of
song
A song is a musical composition performed by the human voice. The voice often carries the melody (a series of distinct and fixed pitches) using patterns of sound and silence. Songs have a structure, such as the common ABA form, and are usu ...
s or
software
Software consists of computer programs that instruct the Execution (computing), execution of a computer. Software also includes design documents and specifications.
The history of software is closely tied to the development of digital comput ...
, the e-tailer usually sends the file to the customer over the Internet. The largest of these online retailing corporations are
Alibaba,
Amazon.com, and
eBay.
Terminology
Alternative names for the activity are "
e-commerce
E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...
", a shortened form of "electronic commerce" or "e-shopping", a shortened form of "electronic shopping". An online store may also be called an e-web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online storefront and virtual store. Mobile commerce (or
m-commerce) describes purchasing from an online retailer's mobile device-optimized website or
software application
Application software is any computer program that is intended for end-user use not computer operator, operating, system administration, administering or computer programming, programming the computer. An application (app, application program, sof ...
("app"). These websites or apps are designed to enable customers to browse through a companies' products and services on
tablet computer
A tablet computer, commonly shortened to tablet, is a mobile device, typically with a mobile operating system and touchscreen display processing circuitry, and a rechargeable battery in a single, thin and flat package. Tablets, being computers ...
s and
smartphone
A smartphone is a mobile phone with advanced computing capabilities. It typically has a touchscreen interface, allowing users to access a wide range of applications and services, such as web browsing, email, and social media, as well as multi ...
s.
History
History of online shopping
One of the earliest forms of trade conducted online was
IBM
International Business Machines Corporation (using the trademark IBM), nicknamed Big Blue, is an American Multinational corporation, multinational technology company headquartered in Armonk, New York, and present in over 175 countries. It is ...
's
online transaction processing (OLTP) developed in the 1960s, which allowed the processing of financial transactions in
real-time.
The computerized ticket reservation system developed for
American Airlines
American Airlines, Inc. is a major airlines of the United States, major airline in the United States headquartered in Fort Worth, Texas, within the Dallas–Fort Worth metroplex, and is the Largest airlines in the world, largest airline in the ...
called
Semi-Automatic Business Research Environment (SABRE) was one of its applications. There, computer terminals located in different travel agencies were linked to a large IBM mainframe computer, which processed transactions simultaneously and coordinated them so that all travel agents had access to the same information at the same time.
At some point between 1971 and 1972, students at Stanford and MIT used the internet precursor
ARPANET
The Advanced Research Projects Agency Network (ARPANET) was the first wide-area packet-switched network with distributed control and one of the first computer networks to implement the TCP/IP protocol suite. Both technologies became the tec ...
to make a deal to exchange
marijuana
Cannabis (), commonly known as marijuana (), weed, pot, and ganja, List of slang names for cannabis, among other names, is a non-chemically uniform psychoactive drug from the ''Cannabis'' plant. Native to Central or South Asia, cannabis has ...
, but the interaction does not qualify as
e-commerce
E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...
because no money was transferred online.
The landscape of online shopping as we know it today took shape with the rise of the Internet. Initially serving as a mere advertising platform, the Internet transitioned swiftly into a dynamic space for actual online transactions. This transformation was fueled by the development of interactive web pages and secure transmission protocols, marking a pivotal moment in 1994 with the first online sales of
Sting's album, ''
Ten Summoner's Tales''.
This milestone event set the stage for the diversification of online retail, with early adopters such as wine, chocolates, and flowers paving the way. These products became pioneers in the e-commerce realm, capturing the attention of a growing audience. Researchers identified a crucial factor for internet success – the suitability of products for online transactions. Generic items that didn't necessitate physical interaction gained traction, propelling the online shopping trend forward.
In its nascent stages, online shopping faced a limited audience. The early adopters were predominantly affluent males aged 30 and above. However, this demographic landscape underwent significant changes over time, and the online shopping sphere became more inclusive.
Over the years, the United Kingdom has witnessed a substantial shift in consumer behavior, with online shopping accounting for a noteworthy percentage of retail transactions. The extent of this influence varies depending on the product category, highlighting the diverse ways in which consumers engage with online platforms.
Growth in online shoppers
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'
nteractive, many-to-manywas fundamentally different from the traditional definitions of
mass communication and
mass media
Mass media include the diverse arrays of media that reach a large audience via mass communication.
Broadcast media transmit information electronically via media such as films, radio, recorded music, or television. Digital media comprises b ...
and a precursor to the social networking on the
Internet
The Internet (or internet) is the Global network, global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a internetworking, network of networks ...
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 World Wide Web (WWW or simply the Web) is an information system that enables Content (media), content sharing over the Internet through user-friendly ways meant to appeal to users beyond Information technology, IT specialists and hobbyis ...
, the
IBM PC
The IBM Personal Computer (model 5150, commonly known as the IBM PC) is the first microcomputer released in the List of IBM Personal Computer models, IBM PC model line and the basis for the IBM PC compatible ''de facto'' standard. Released on ...
, and
Microsoft
Microsoft Corporation is an American multinational corporation and technology company, technology conglomerate headquartered in Redmond, Washington. Founded in 1975, the company became influential in the History of personal computers#The ear ...
MS-DOS, and were installed mainly in the UK by large corporations.
The first
World Wide Web
The World Wide Web (WWW or simply the Web) is an information system that enables Content (media), content sharing over the Internet through user-friendly ways meant to appeal to users beyond Information technology, IT specialists and hobbyis ...
server and browser, created by
Tim Berners-Lee
Sir Timothy John Berners-Lee (born 8 June 1955), also known as TimBL, is an English computer scientist best known as the inventor of the World Wide Web, the HTML markup language, the URL system, and HTTP. He is a professorial research fellow a ...
in 1989, opened for commercial use in 1991.
[Palmer, Kimberly.(2007) News & World Report.] 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.
International statistics
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.
Customers
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.
Customer buying behaviour in digital environment
The
marketing
Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce.
Marketing is usually conducted by the seller, typically a retailer or ma ...
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
User-generated content (UGC), alternatively known as user-created content (UCC), emerged from the rise of web services which allow a system's User (computing), users to create Content (media), content, such as images, videos, audio, text, testi ...
, typically provided through software from companies like
Bazaarvoice and
Trustpilot
Trustpilot Group plc, is a Danish consumer business operating a review website founded in Denmark in 2007 that hosts reviews of businesses worldwide. Nearly one-million new reviews are posted each month. The site offers freemium services to bu ...
, 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
Amazon most often refers to:
* Amazon River, in South America
* Amazon rainforest, a rainforest covering most of the Amazon basin
* Amazon (company), an American multinational technology company
* Amazons, a tribe of female warriors in Greek myth ...
,
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 expectations 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
Accessibility or Innovation? Store Shopping Trips versus Online Shopping
Product selection
Consumers
A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. Th ...
find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a
shopping search engine. Users can compare and evaluate products using
product information on the website, as well on other websites such as websites about
product tests.
Once a particular product has been found and selected on the website of the seller, most online retailers use
shopping cart software to allow the consumer to accumulate multiple items and to adjust quantities, like filling a physical shopping cart or basket in a conventional store. A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information is collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this information only needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete. Less sophisticated stores may rely on consumers to phone or e-mail their orders (although full credit card numbers, expiry date, and
Card Security Code, or bank account and routing number should not be accepted by e-mail, for reasons of security).
Impact of reviews on consumer behavior
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
Social media are interactive technologies that facilitate the Content creation, creation, information exchange, sharing and news aggregator, aggregation of Content (media), content (such as ideas, interests, and other forms of expression) amongs ...
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,
[Nielsen, "Online Shopping Trends", (USA: The Nielsen Company, 2010)] 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.
Payment
Online shoppers commonly use a
credit card or a
PayPal account in order to make payments. However, some systems enable users to create accounts and pay by alternative means, such as:
* Billing to
mobile phones and
landlines
*
Bitcoin
Bitcoin (abbreviation: BTC; Currency symbol, sign: ₿) is the first Decentralized application, decentralized cryptocurrency. Based on a free-market ideology, bitcoin was invented in 2008 when an unknown entity published a white paper under ...
or other
cryptocurrencies
A cryptocurrency (colloquially crypto) is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Individual coin ownership records ...
*
Cash on delivery (C.O.D.)
*
Cheque/ Check
*
Debit card
A debit card, also known as a check card or bank card, is a payment card that can be used in place of cash to make purchases. The card usually consists of the bank's name, a card number, the cardholder's name, and an expiration date, on either ...
*
Direct debit in some countries
*
Electronic money of various types
*
Gift card
A gift card, also known as a gift certificate in North America, or gift voucher or gift token in the UK, is a prepaid stored-value card, stored-value money card, usually issued by a retailer or bank, to be used as an alternative to cash for pu ...
s
*
Invoice
An invoice, bill, tab, or bill of costs is a commercial document that includes an itemized list of goods or services furnished by a seller to a buyer relating to a sale transaction, that usually specifies the price and terms of sale, quanti ...
, especially popular in some markets/countries, such as Switzerland
*
Postal money order
*
Wire transfer/delivery on payment
Some online shops will not accept international credit cards. Some require both the purchaser's billing and shipping address to be in the same country as the online shop's base of operation. Other online shops allow customers from any country to send gifts anywhere. The financial part of a transaction may be processed in real time (e.g. letting the consumer know their credit card was declined before they log off), or may be done later as part of the fulfillment process.
Product delivery

Once a payment has been accepted, the goods or services can be delivered in the following ways. For physical items:
*
Package delivery
Package delivery, or parcel delivery, is the delivery of shipping containers, parcels, or high-value mail in single shipments. The service is provided by most postal systems, express mail, private courier companies, and less-than-truckload shipp ...
: The product is shipped to a customer-designated address. Retail
package delivery
Package delivery, or parcel delivery, is the delivery of shipping containers, parcels, or high-value mail in single shipments. The service is provided by most postal systems, express mail, private courier companies, and less-than-truckload shipp ...
is typically done by the public
postal system
The mail or post is a system for physically transporting postcards, letters, and parcels. A postal service can be private or public, though many governments place restrictions on private systems. Since the mid-19th century, national postal sy ...
or a retail
courier
A courier is a person or organization that delivers a message, package or letter from one place or person to another place or person. Typically, a courier provides their courier service on a commercial contract basis; however, some couriers are ...
such as
FedEx
FedEx Corporation, originally known as Federal Express Corporation, is an American Multinational corporation, multinational Conglomerate (company), conglomerate holding company specializing in Package delivery, transportation, e-commerce, and ...
,
UPS,
DHL
DHL (originally named after founders Dalsey, Hillblom and Lynn) is a multinational Import-Export Expert Company, founded in the United States and headquartered in Bonn, Germany. It provides courier, package delivery, and express mail service, ...
, or
TNT.
*
Drop shipping: The order is passed to the manufacturer or third-party distributor, who then ships the item directly to the consumer, bypassing the retailer's physical location to save time, money, and space.
* In-store pick-up: The customer selects a local store using a
locator software and picks up the delivered product at the selected location. This is the method often used in the
bricks and clicks business model.
For digital items or tickets:
*
Download
In computer networks, download means to ''receive'' data from a remote system, typically a server such as a web server, an FTP server, an email server, or other similar systems. This contrasts with uploading, where data is ''sent to'' a remote ...
ing/
Digital distribution:
The method often used for digital media products such as software, music, movies, or images.
*
Printing
Printing is a process for mass reproducing text and images using a master form or template. The earliest non-paper products involving printing include cylinder seals and objects such as the Cyrus Cylinder and the Cylinders of Nabonidus. The ...
out, provision of a code for, or
e-mailing of such items as
admission tickets and
scrip
A scrip (or ''wikt:chit#Etymology 3, chit'' in India) is any substitute for legal tender. It is often a form of credit (finance), credit. Scrips have been created and used for a variety of reasons, including exploitative payment of employees un ...
(e.g., gift certificates and coupons). The tickets, codes, or coupons may be redeemed at the appropriate physical or online premises and their content reviewed to verify their eligibility (e.g., assurances that the right of admission or use is redeemed at the correct time and place, for the correct dollar amount, and for the correct number of uses).
*
Will call, COBO (in Care Of Box Office), or "at the door" pickup: The patron picks up pre-purchased tickets for an event, such as a play, sporting event, or concert, either just before the event or in advance. With the onset of the Internet and e-commerce sites, which allow customers to buy tickets online, the popularity of this service has increased.
Shopping cart systems
Simple shopping cart systems allow the off-line administration of products and categories. The shop is then generated as HTML files and graphics that can be uploaded to a webspace. The systems do not use an online database. A high-end solution can be bought or rented as a stand-alone program or as an addition to an
enterprise resource planning program. It is usually installed on the company's web server and may integrate into the existing
supply chain
A supply chain is a complex logistics system that consists of facilities that convert raw materials into finished products and distribute them to end consumers or end customers, while supply chain management deals with the flow of goods in distri ...
so that ordering, payment, delivery, accounting and warehousing can be automated to a large extent. Other solutions allow the user to register and create an online shop on a
portal that hosts multiple shops simultaneously from one back office. Examples are
BigCommerce,
Shopify and
FlickRocket.
Open source
Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use and view the source code, design documents, or content of the product. The open source model is a decentrali ...
shopping cart packages include advanced platforms such as Interchange, and off-the-shelf solutions such as
Magento,
osCommerce,
WooCommerce,
PrestaShop, and
Zen Cart. Commercial systems can also be tailored so the shop does not have to be created from scratch. By using an existing framework, software modules for various functionalities required by a web shop can be adapted and combined.
Design
Customers are attracted to online shopping not only because of high levels of convenience, but also because of broader selections, competitive pricing, and greater access to information. Business organizations seek to offer online shopping not only because it is of much lower cost compared to bricks and mortar stores, but also because it offers access to a worldwide market, increases customer value, and builds sustainable capabilities.
Information load
Designers of online shops are concerned with the effects of information load. Information load is a product of the spatial and temporal arrangements of stimuli in the web store. Compared with conventional retail shopping, the information environment of virtual shopping is enhanced by providing additional product information such as comparative products and services, as well as various alternatives and attributes of each alternative, etc.
Two major dimensions of information load are complexity and novelty. Complexity refers to the number of different elements or features of a site, often the result of increased information diversity. Novelty involves the unexpected, suppressed, new, or unfamiliar aspects of the site. The novelty dimension may keep consumers exploring a shopping site, whereas the complexity dimension may induce
impulse purchases.
Consumer needs and expectations
Internet consumers are self-conscious and emphasize personalized consumption, which makes the demand for online consumption different. Online consumers have different needs depending on their time and environment. Even different online consumers have different needs at the same level of demand due to the difference in income level and other factors. Compared with the centralized nature of traditional markets, online consumption is more decentralized. In the online consumer market, consumers have a short decision time, a large variability of consumer demand, a large number of purchases, but a relatively small amount of each purchase, a considerable mobility of purchases, a strong substitutability of goods, and a large elasticity of demand. According to the output of a research report by
Western Michigan University published in 2005, an e-commerce website does not have to be good looking with listing on a lot of search engines. It must build relationships with customers to make money. The report also suggests that a website must leave a positive impression on the customers, giving them a reason to come back.
However, resent research has proven that sites with higher focus on efficiency, convenience, and personalised services increased the customers motivation to make purchases.
Dyn, an Internet performance management company conducted a survey on more than 1400 consumers across 11 countries in
North America
North America is a continent in the Northern Hemisphere, Northern and Western Hemisphere, Western hemispheres. North America is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South Ameri ...
,
Europe
Europe is a continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere. It is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the west, the Mediterranean Sea to the south, and Asia to the east ...
,
Middle-East and
Asia
Asia ( , ) is the largest continent in the world by both land area and population. It covers an area of more than 44 million square kilometres, about 30% of Earth's total land area and 8% of Earth's total surface area. The continent, which ...
and the results of the survey are as follows:
* Online retailers must improve the website speed
* Online retailers must ease consumers fear around security
These concerns majorly affect the decisions of almost two thirds of the consumers.
User interface

The most important factors determining whether customers return to a website are ease of use and the presence of user-friendly features.
Usability
Usability can be described as the capacity of a system to provide a condition for its users to perform the tasks safely, effectively, and efficiently while enjoying the experience. In software engineering, usability is the degree to which a softw ...
testing is important for finding problems and improvements in a web site. Methods for evaluating usability include
heuristic evaluation, cognitive walkthrough, and
user testing. Each technique has its own characteristics and emphasizes different aspects of the user experience.
[Sherry Y. Chen en Robert D. Macredie, "The assessment of usability of electronic shopping: A heuristic evaluation", International Journal of Information Management 25 (2005), 516–532]
Market share
The popularity of online shopping continues to erode sales of conventional retailers. For example,
Best Buy, the largest retailer of electronics in the U.S. in August 2014 reported its tenth consecutive quarterly dip in sales, citing an increasing shift by consumers to online shopping.
Amazon.com has the largest market share in the United States. As of May 2018, a survey found two-thirds of Americans had bought something from Amazon (92% of those who had bought anything online), with 40% of online shoppers buying something from Amazon at least once a month. The survey found shopping began at amazon.com 44% of the time, compared to a general search engine at 33%. It estimated 75 million Americans subscribe to
Amazon Prime and 35 million more use someone else's account.
There were 242 million people shopping online in China in 2012. For developing countries and low-income households in developed countries, adoption of e-commerce in place of or in addition to conventional methods is limited by a lack of affordable Internet access.
Advantages
Convenience
Online stores are usually available 24 hours a day, and many consumers in Western countries have Internet access both at work and at home. Other establishments such as Internet cafes, community centers and schools provide internet access as well. In contrast, visiting a conventional retail store requires travel or commuting and costs such as gas, parking, or bus tickets, and must usually take place during business hours. Delivery was always a problem which affected the convenience of online shopping. Additionally, the online shopping industry has not only involved the concept of providing convenience for customers but also improved perceptions of social inclusion. However to overcome this many retailers including online retailers in Taiwan brought in a store pick up service. This now meant that customers could purchase goods online and pick them up at a nearby convenience store, making online shopping more advantageous to customers. In the event of a problem with the item (e.g., the product was not what the consumer ordered or the product was not satisfactory), consumers are concerned with the ease of returning an item in exchange for the correct product or a refund. Consumers may need to contact the retailer, visit the post office and pay return shipping, and then wait for a replacement or refund. Some online companies have more generous return policies to compensate for the traditional advantage of physical stores. For example, the online shoe retailer
Zappos.com includes labels for free return shipping, and does not charge a restocking fee, even for returns which are not the result of merchant error. (Note: In the United Kingdom, online shops are prohibited from charging a restocking fee if the consumer cancels their order in accordance with the Consumer Protection (Distance Selling) Act 2000). A 2018 survey in the United States found 26% of online shoppers said they never return items, and another 65% said they rarely do so. Merchants may benefit from online shopping due to low sales inventory pressure, low operating costs, and the scale of operation is not limited by the site.
Delivery
Especially in cases of large or heavy products, delivery can be not only more convenient but also not require having or using a car. Not using or depending on personal vehicles, which
can have substantial impact on the environment, to travel to local stores can make online shopping more sustainable than buying in local stores if such are used otherwise
(especially if items are bundled
and delivery vehicles are electric and use optimized routes). Moreover, the pace of urbanization, local delivery systems, and internet connectivity which facilitate the delivery process are the major determinants of e-commerce adoption,
Information and reviews
Online shopping is usually more informationally rich than shopping at physical stores traveled to and usually has higher comparability and customizability.
Online stores must describe products for sale with text, photos, and multimedia files, and sometimes have features such as
question and answers or filters, whereas in a physical retail store, the actual product and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other experimentation). Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which product to buy. Some stores even allow customers to comment or rate their items. There are also dedicated
review sites that host user reviews for different products. Reviews and even some blogs give customers the option of shopping for cheaper purchases from all over the world without having to depend on local retailers. In a conventional retail store, clerks are generally available to answer questions. Some online stores have real-time chat features, but most rely on e-mails or phone calls to handle customer questions. Even if an online store is open 24 hours a day, seven days a week, the customer service team may only be available during regular business hours. It also implies that geographical factors, rather than socioeconomic issues, must be addressed in order to improve online shopping acceptanc
The geography of online shopping in China and its key drivers
Price and selection
One advantage of shopping online is being able to quickly seek out deals for items or services provided by many different vendors (though some
local search engines do exist to help consumers locate products for sale in nearby stores). Search engines, online
price comparison services and
discovery shopping engines can be used to look up sellers of a particular product or service. Shipping costs (if applicable) reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of
sales tax
A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a govern ...
may compensate for this. Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments
bricks-and-mortar retailers order. Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently large orders. Another major advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users' shopping experience.
Disadvantages
Fraud and security concerns
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud than face-to-face transactions. When ordering merchandise online, the item may not work properly, it may have defects, or it might not be the same item pictured in the online photo. Merchants also risk fraudulent purchases if customers are using stolen credit cards or fraudulent repudiation of the online purchase. However, merchants face less risk from physical theft by using a warehouse instead of a retail storefront.
Secure Sockets Layer (SSL)
encryption
In Cryptography law, cryptography, encryption (more specifically, Code, encoding) is the process of transforming information in a way that, ideally, only authorized parties can decode. This process converts the original representation of the inf ...
has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the merchant. However, one must still trust the merchant (and employees) not to use the credit card information subsequently for their own purchases, and not to pass the information to others. Also, hackers might break into a merchant's web site and steal names, addresses and credit card numbers, although the
Payment Card Industry Data Security Standard is intended to minimize the impact of such breaches.
Identity theft
Identity theft, identity piracy or identity infringement occurs when someone uses another's personal identifying information, like their name, identifying number, or credit card number, without their permission, to commit fraud or other crimes. ...
is still a concern for consumers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to require disclosure to consumers when this happens. Computer security has thus become a major concern for merchants and e-commerce service providers, who deploy countermeasures such as firewalls and anti-virus software to protect their networks.
Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the company issuing the seal. The purpose of these seals is to increase the confidence of online shoppers. However, the existence of many different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent.
A number of resources offer advice on how consumers can protect themselves when using online retailer services. These include:
* Sticking with well-known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there is comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry oversight programs such as a trust mark or a trust seal.
* Before buying from a new company, evaluating the website by considering issues such as: the professionalism and user-friendliness of the site; whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and handling charges.
* Ensuring that the retailer has an acceptable
privacy policy posted. For example, note if the retailer does not explicitly state that it will not share private information with others without consent.
* Ensuring that the vendor address is protected with SSL (see above) when entering credit card information. If it does the address on the credit card information entry screen will start with "HTTPS".
* Using
strong passwords which do not contain personal information such as the user's name or birthdate. Another option is a "pass phrase," which might be something along the lines: "I shop 4 good a buy!!" These are difficult to hack, since they do not consist of words found in a dictionary, and provides a variety of upper, lower, and special characters. These passwords can be site specific and may be easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems that shoppers potentially face include identity theft, faulty products, and the accumulation of
spyware
Spyware (a portmanteau for spying software) is any malware that aims to gather information about a person or organization and send it to another entity in a way that harms the user by violating their privacy, endangering their device's securit ...
. If users are required to put in their credit card information and billing/shipping address and the website is not secure, customer information can be accessible to anyone who knows how to obtain it. Most large online corporations are inventing new ways to make
fraud
In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...
more difficult. However, criminals are constantly responding to these developments with new ways to manipulate the system. Even though online retailers are making efforts to protect consumer information, it is a constant fight to maintain the lead. It is advisable to be aware of the most current technology and scams to protect consumer identity and finances. Product delivery is also a main concern of online shopping. Most companies offer shipping insurance in case the product is lost or damaged. Some shipping companies will offer refunds or compensation for the damage, but this is up to their discretion.
Fencing
Fencing
Fencing is a combat sport that features sword fighting. It consists of three primary disciplines: Foil (fencing), foil, épée, and Sabre (fencing), sabre (also spelled ''saber''), each with its own blade and set of rules. Most competitive fe ...
is another growing societal problem associated with online platforms. Stolen merchandise from brick and mortal retailers and cargo are easily resold to the public through third party marketplaces due to lack of accountability and regulation by online operators. In the United States alone, businesses are facing the brunt of organized retail crime with the value of stolen goods amounting to $68.8 billion in 2021 (equivalent to 1.47% of all sales or $214 per capita nationwide). These goods are typically passed off as legitimate, and resold online to unsuspecting buyers.
Lack of full cost disclosure
The lack of full cost disclosure may also be problematic. While it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front. Additional fees such as shipping are often not visible until the final step in the checkout process. The problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not include additional fees that must be paid upon delivery such as
duties and
brokerage
A broker is a person or entity that arranges transactions between a buyer and a seller. This may be done for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neith ...
. Some services such as the Canadian-based Wishabi attempts to include estimates of these additional cost,
but nevertheless, the lack of general full cost disclosure remains a concern.
Privacy
Privacy of personal information is a significant issue for some consumers. Many consumers wish to avoid spam and telemarketing which could result from supplying contact information to an online merchant. In response, many merchants promise to not use consumer information for these purposes, Many websites keep track of consumer shopping habits in order to suggest items and other websites to view. Brick-and-mortar stores also collect consumer information. Some ask for a shopper's address and phone number at checkout, though consumers may refuse to provide it. Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a catalog mailing list. This information is obviously not accessible to the merchant when paying in cash or through a bank (money transfer, in which case there is also proof of payment).
Aggregation
High-volume websites, such as
Yahoo!
Yahoo (, styled yahoo''!'' in its logo) is an American web portal that provides the search engine Yahoo Search and related services including My Yahoo, Yahoo Mail, Yahoo News, Yahoo Finance, Yahoo Sports, y!entertainment, yahoo!life, and its a ...
, Amazon.com and eBay offer hosting services for online stores to all size retailers. These stores are presented within an integrated navigation framework, sometimes known as virtual shopping malls or
online marketplace
An online marketplace (or online e-commerce marketplace) is a type of e-commerce website where product or service information is provided by multiple third parties. Online marketplaces are the primary type of multichannel ecommerce and can be a wa ...
s.
See also
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Bricks and clicks business model
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Dark store
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Digital distribution
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Electronic business
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E-commerce
E-commerce (electronic commerce) refers to commercial activities including the electronic buying or selling products and services which are conducted on online platforms or over the Internet. E-commerce draws on technologies such as mobile co ...
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Online auction business model
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Online music store
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Online pharmacy
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Online shopping malls
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Online shopping rewards
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Package delivery
Package delivery, or parcel delivery, is the delivery of shipping containers, parcels, or high-value mail in single shipments. The service is provided by most postal systems, express mail, private courier companies, and less-than-truckload shipp ...
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Personal shopper
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Product tracing systems: allow to see source factory of a product
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Retail therapy
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Types of retail outlets
References
External links
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{{DEFAULTSORT:Online Shopping
Consumer behaviour
Merchandising