RISKS INVOLVED IN ONLINE SHOPPING

The phenomenon of online shopping is showing a perpetual upward curve across the globe. Not only does it offer convenient shopping with a variety of products, but also allows quick price comparisons and fast access to product information. In the U.S. alone, online retail accounts for 6% of the total retail market, with the online population of 925 million people, it is safe to say the B2C e-commerce all over the world will grow strongly in the future.
Though online commerce has developed rapidly in recent years, it is still contemplated to be ridden with certain risks. Consumers who shop online will probably face double risks like disappointment when receiving the goods and difficulties of returning the goods. Every purchase contains some degree of risk. The outcome may make consumers unhappy and regretful.
Our team of experts has perceived online retail risks in six dimensions, and they are:

Financial or economic risk

The net financial loss to a consumer through reasons like defective or damaged product, lack of warranty, high maintenance fees, non-refund of the product price by the seller etc.  Economic risk is the loss incurred when a consumer has made a simple decision to purchase a product that cannot be replaced or refunded, or a consumer has paid for the product but fails to receive it.

Performance risk

The loss incurred when the product chosen might not be of the advertised quality or not performing as desired.

Psychological risk

The loss incurred when the product chosen does not fulfil the consumer’s self-image or perceptions of self and fails to meet up to the satisfaction level of the consumer.

Physical risk

The loss incurred when the product chosen may physically harm the consumer.

Social risk

The loss incurred when the product chosen is not appreciated by the consumer’s family and friends and therefore the value for money is minimized.

Time risk

The loss incurred when it requires more time and energy to acquire the product and becomes inconvenient like delayed delivery of the product and the consumer’s unending follow up with the seller.

Types of products on the internet

There are various products with different categories online.

The most common product categorization is the classification of products in two broad categories - search goods and experience goods.

Search goods are goods or services with features and characteristics easily evaluated before purchase, such as apparels, furniture, sports goods, souvenirs and flight tickets, shoes etc.

Experience goods are goods or services where the product characteristics can be ascertained upon consumption, use and experience, such as computers/computer peripherals, beauty care, books and magazines and communication products.

Deficient information regarding the products features and characteristics is a common phenomenon occurring in experience goods, because product characteristics, such as quality, are difficult to be observed before consumers make purchases. These characteristics can be discovered only upon consumption.
Search goods, on the other hand, tend to have lower intangible characteristics and have more advantage in online shopping, as they can be evaluated with external information without actual check. Experience goods, therefore, possess a higher perceived risk online.

Internet Shopping Experience
When consumers acquire experiences in purchasing a specific product, they get an easier access to familiar product information.  To online users, previous shopping experiences also seem to influence their future purchase intentions.  These experiences will continue to affect the consumer’s future purchase decision-making processes.  Decision-making is a cycle of feedback activities. In the online shopping environment, consumers use their own experiences to evaluate product information, purchase payments, services, risks, privacy and warranty. Many people think the previous shopping experiences encourage consumers to shop online.  Customers that never shop online adopt a higher level of risk aversion strategy than repeat customers do. Experienced online shopping consumers make more purchases as compared to inexperienced ones.  As consumers acquire more online shopping experiences, they develop confidence that facilitates more ambitious buying.  Most of the previous shopping experiences have to satisfactory and positive to encourage future online shopping. If consumers have negative experiences in the past, they will probably reduce the use of the Internet shopping in the future.

The contemporary e-consumer is more willing to accept new ideas and try new products. Most of the consumers are young, highly educated and willing to take risk at their own. Practically, all internet users accept online shopping as the most convenient and hassle free mode of going to the market.  Online users often spend a lot of time on the Internet activities and often purchase various products on the Internet.  The contemporary e-consumers not only have more positive attitudes towards online shopping, but also are more creative and intellectual than those who do not purchase products or services online.  Potential online shoppers show highly adventurous spirit, have a positive attitude to environmental changes and frequently use the Internet. The factors that affect purchase intentions are attribute levels, price, and cues such as manufacturer brand and online retail brand and reviews from the online third-party.

As an online solution provider to the e-consumer, our organization has primarily focused its endeavors towards thoroughly understanding the e-consumers’ thoughts on online shopping risks and the factors that influence their purchase intentions, and therefore we effectively provide speedy, transparently worked out, practical and comprehensive online solutions to e-consumers all over the world in the ever expanding arena of online shopping.

The pivotal object of our enterprise is to reduce the perceived and actual risk factors dogging the e-commerce environment in order to increase certainty and credibility in the realm of online shopping. We have developed numerous risk handling processes to reduce the risk quotient prevailing in the global e-retail scenario. Our risk reduction strategies circumvent around solutions like money-back guarantee and compensation, our vast data base of the retailers’ reputation, and brand image etc.

 However, we also have introduced certain positive promotional measures to stimulate friendly and sensitive relations between the consumer and the merchant such as discounts, free samples and free delivery services on the part of the online sellers and customer loyalty from the consumers’ end.