What does consumer behavior mean?

Consumer Behavior

• Is online consumer behavior differently than consumer behavior offline and in which manner? Is there any test, survey or research done and how did it change our understanding of consumer behavior online? I'm thinking about impulsive buying for example. Or what about product consideration... is that changed...

• Answer:

  Hello, serge12-ga! You have asked a very interesting question. I have compiled a variety of studies which focus on comparisons between online and offline consumer behavior in relation to different products. As you can see, each study focuses on a particular aspect of consumer behavior or product catagory, so there are no sweeping conclusions. However, you should be able to use the following references to formulate some general ideas for your research, and perhaps decide on a more narrow focus. == Consumers often use the internet for product research before buying offline. "Online Research Drives Offline Sales," By Dawn Anfuso. October 07, 2004. http://www.imediaconnection.com/content/4355.asp "Study shows the Internet's role as a consumer product information utility is much larger than its role as a direct selling medium. Online product research conducted by consumers the past year drove $180.7 billion in offline spending, compared to $106.5 billion in direct online consumer spending, according to new research findings from The American Interactive Consumer Survey, conducted by The Dieringer Research Group." "The survey of 3,000 U.S. adults covered online and offline purchasing behaviors and impacts during the 12-month period ending the second quarter this year." "The new annual spending data indicate that at least $1.70 is spent offline after doing online research for every consumer dollar spent directly online," says Thomas E. Miller, senior consultant at The Dieringer Research Group." Read further... == A bad online experience can force some consumers offline, or away from a brand altogether. "Top Online Retailers Are Leaving Money On the Table." FGI Research. 06/2005 http://www.commercemanager.info/magazine/article_688_top_online_retailers_are_leaving_money_on_the.html "Despite strong increases in online consumer spending, a new study shows that many of the nation?s top retailers are performing well below their potential online and may be inadvertently driving away some people who would otherwise make purchases." "ForeSee Results and FGI Research produced the study, based on surveys of consumers who browsed the 40 highest-grossing e-retail sites, which scores and ranks web sites on the basis of how well they are delivering the kind of experience site visitors want. Falling short in this area can cause web site visitors to spend their money elsewhere and, in some cases, the sites were found to negatively impact future offline spending with the same brand." ... "The survey revealed that traditional brick-and-mortar retailers are, in general, dramatically under-utilizing the online channel. Most companies measured in this category - with the noteworthy exception of Barnes & Noble, an online star - have a huge gap between likelihood to buy online vs. offline." Read further.... === Shopping online can mean more "freedom" for consumers. "SHOPPING ONLINE FOR FREEDOM, CONTROL AND FUN." M Wolfinbarger, MC Gilly - California Management Review, 2001 http://e-commerce.mit.edu/papers/ERF/ERF89.pdf Abstract only: "As they do offline, consumers shop online for both goal-oriented and experiential reasons; in short, they shop to acquire items, and they shop to shop. However, goal-oriented motives are more common among online shoppers than are experiential motives. We identify and discuss attributes that facilitate goal-oriented online shopping, including accessibility/convenience, selection, information availability and lack of unwanted sociality from retail sales help or shopping partners such as spouses. ** Importantly, consumers report that shopping online results in a substantially increased sense of freedom and control as compared to offline shopping. While consumers are more likely to describe offline rather than online shopping in experiential terms, we find evidence of experiential motivations for online shopping emerging. "We offer managerial implications of mixing online and offline shopping, suggest ways in which the experiential aspects of online shopping can be enhanced without interfering with the goal-oriented desires of consumers, and explore the difficulty of creating an online community. Finally, while closing transactions at websites is one important e-commerce goal, companies should not lose site of the continuing importance and power of their website as an information and communications vehicle as well." == Different product categories affect preferences for online and offline purchase, and thus affect marketing strategies. "PRODUCT CATEGORY DEPENDENT CONSUMER PREFERENCES FOR ONLINE AND OFFLINE SHOPPING FEATURES AND THEIR INFLUENCE ON MULTICHANNEL RETAIL ALLIANCES." Aron M. Levin, Irwin P. Levin and C. Edward Heath. Journal of Electronic Commerce Research, VOL. 4, NO. 3, 2003 http://www.csulb.edu/web/journals/jecr/issues/20033/paper1.pdf Abstract: "This paper addresses the question of how to combine online and offline services in the most complementary way for different product classes. In a series of surveys conducted for Experiment 1 it was determined that consumers? preferences for online and offline services differ for different products at different stages of the shopping experience. These differences were accounted for by a model that weights the importance of different attributes for different products and assigns different values to these attributes depending on whether they are better served online or offline. For example, for products like clothing consumers place great value on the ability to touch and inspect the product and thus they prefer offline, bricks-and-mortar services at each stage of the shopping experience. By contrast, for products like computer software consumers place great value on the rapid dissemination of large amounts of information through Internet search, but many are concerned about speedy delivery and nohassle exchange which leads them to make their final purchases offline....." == Online consumer brand loyalty differs between large and small market share brands. Offline, no real difference in brand loyalty is observed. "A Comparison of Online and Offline Consumer Brand Loyalty." Peter J. Danaher, Isaac W. Wilson and Robert A. Davis. Volume: 22 Issue: 4 http://www.extenza-eps.com/INF/doi/abs/10.1287/mksc.22.4.461.24907;jsessionid=iYrcrDarDci9QegYyT?cookieSet=1&journalCode=mksc Abstract only: "In this study we compare consumer brand loyalty in online and traditional shopping environments for over 100 brands in 19 grocery product categories. The online purchase data come from a large traditional grocery retailer that also operates an online store for its products. The offline data corresponds to the exact same brands and categories bought in traditional stores by a panel of homes operated by ACNielsen for purchases made in the same city and over the same time period. We compare the observed loyalty with a baseline model, a new segmented Dirichlet model, which has latent classes for brand choice and provides a very accurate model for purchase behavior. The results show that observed brand loyalty for high market share brands bought online is significantly greater than expected, with the reverse result for small share brands. In contrast, in the traditional shopping environment, the difference between observed and predicted brand loyalty is not related to brand share." == The following paper examines several criteria for differences in shopping behavior for particular products on and offline: "Consumer Choice Behavior in Online and Traditional Supermarkets: The Effects of Brand Name, Price, and Other Search Attributes," International Journal of Research in Marketing, Vol.17,No.1,p.55-78. http://www.smeal.psu.edu/ebrc/publications/res_papers/1999_03.pdf Abstract: "Are brand names more valuable online or in traditional supermarkets? Does the increasing availability of comparative price information online make consumers more price-sensitive? We address these and related questions by first conceptualizing how different store environments (online and traditional stores) can differentially affect consumer choices. We use the liquid detergent, soft margarine spread, and paper towel categories to test our hypotheses. Our hypotheses and the empirical results from our choice models indicate that: (1) Brand names become more important online in some categories but not in others depending on the extent of information available to consumers - brand names are more valuable when information on fewer attributes is available online, (2) Sensory search attributes, particularly visual cues about the product (e.g., paper towel design), have lower impact on choices online, and factual information (i.e., non-sensory attributes, such as the fat content of margarine) have higher impact on choices online (3) Price sensitivity is higher online, but this is due to online promotions being stronger signals of price discounts. The combined effect of price and promotion on choice is weaker online than offline. == The following study, which focuses on supermarket products, finds that online consumers are less sensitive to price, are less particular about product size, and screen more for brand names. "Behavioural differences between consumers attracted to shopping online versus traditional supermarkets: implications for enterprise design and marketing strategy." R.L. Andrews and I.S. Currim. Int. J. Internet Marketing and Advertising, Vol. 1, No. 1, 2004 http://web.gsm.uci.edu/~currim/papers/Behavioral%20Differences%20Between%20Consumers%20Final.pdf Abstract: "Despite the dot.com shakeout, online revenues continue to increase and are projected to impose greater pressure on traditional distribution channels. However, there is a striking absence of published empirical work on how consumers attracted to shopping online behave relative to consumers shopping in a traditional store. Such behavioural differences, if they exist, could guide online enterprise design and marketing strategy. This study uses data from both traditional supermarket scanners and an online supermarket to test expected differences in choice behaviours of such consumers. "For two product categories, statistically significant differences are found between consumers attracted to shopping online versus traditional supermarkets with regard to the parameters describing the choice process. Compared to traditional supermarket consumers, online consumers are less price sensitive, prefer larger sizes to smaller sizes (or at least have weaker preferences for small sizes), have stronger size loyalty, do more screening on the basis of brand names but less screening on the basis of sizes, and have stronger choice set effects. Many of these differences are found to be prevalent among the majority of online consumers rather than due to the substantially unique behaviour of a minority. Indeed, 11 to 39% of traditional supermarket consumers (depending on the product category) are found to behave like the majority of online consumers whilst 0 to 31% of online consumers are found to behave like the majority of traditional supermarket consumers. Implications of both sets of results for online enterprise design, marketing, and evolution are outlined." == The following study examines the different factors affecting buying behavior from online and offline retailers. "Buying for different reasons? An integrative model of the likelihood of purchasing clothes on-line and in physical stores." Fang Wan. e-Lab, Owen Graduate School of Management, Vanderbilt University http://elab2.ogsm.vanderbilt.edu/elib/upload/152/buyingclothes_onlineconsumerpsy.pdf Abstract: "This study aimed to accomplish two tasks - to compare consumers? perceptions of purchasing clothes from two different shopping channels (on-line stores and physical stores) and to test an integrative model composed of theoretically important factors influencing consumers? shopping behavior. Consistent with previous findings that the Web was neither a mature nor an effective shopping channel for complex products that need to be touched, the results showed that consumers perceived buying clothes from on-line stores to be inferior to buying clothes from physical stores in all aspects examined - channel attribute, expected gratification, perceived risk and trust, and affective reaction to the purchase. When the integrative model was tested, the underlying processes for buying clothes on-line was found to be different from those used to purchase of clothes from a physical store. Consumers were more likely to be driven by their dispositional and socioeconomic characteristics when buying from a traditional shopping channel, while they were more concerned with the perceived vendor characteristics (e.g., expected gratification, perceived risk, perceived efficiency of the purchase from the vendor) when making decisions to purchase from an on- line store. == Many online consumers abandon online shopping carts before completing the transaction. This is a special problem for ecommerce vendors. "Understanding the E-Consumer - A Behavioral Approach to E-Market Segmentation." Shibo Li and Patrali Chatterjee. February 16, 2005 http://elab.vanderbilt.edu/Research/papers/Shopping%20Cart%20Abandonment%20at%20Retail%20Websites%20-%20A%20Multi-Stage%20Model%20of%20Online%20Shopping%20Behavior%20%5BLi,%20Chatterjee%20-%20Feb%202005%5D.pdf Excerpt from a rather lengthy paper: Shopping Cart Abandonment Online vs. Offline: "The key to investigating shopping cart abandonment online involves understanding the differences between online and offline shopping activity and the role virtual shopping carts play in online stores. Offline shopping activity involves significantly higher tangible and psychological costs (time, transportation costs etc.) than online shopping activity (Moe and Fader 2003). Information search, alternative evaluation and decision-making precedes most offline shopping activity since there are limited returns to multiple store trips and consumers are more likely to seek closure to a purchase decision. Very few customers leave stores with no purchases, except for durable, complex or high-cost purchases where consumers may make multiple store trips while deliberating on a purchase decision (Putsis and Srinivasan 1994). The relatively negligible costs of undertaking online shopping activity and information-rich environment at most online stores makes information gathering an integral part of the online shopping process. Online shopping activity even in the case of frequently purchased goods parallels the search and deliberation activity that is typically observed for offline durable purchases. Hence, shopping cart abandonment online will always be higher than shopping cart abandonment in bricks and mortar stores." "Further, the role of shopping carts at online stores differs significantly from their counterparts at bricks-and-mortar stores. Virtual shopping carts are primarily used as external memory aids to "bookmark" products that could be lost while browsing other pages or bought on future visits - similar to "wishlist" feature. Research on consumer decision-making in information-rich environments like the WWW suggests that consumers use a two-stage decision process to simplify their product choice task (Haubl and Trifts 2000). In the first stage consumers screen alternatives to create consideration sets of fewer items in order to reduce cognitive load and effort (Bettman 1979). In the choice stage, consumers use more effortful compensatory strategies to evaluate alternatives in the consideration set to make their purchase decision." "Items in virtual shopping carts represent the first-stage process, i.e., consideration set or items consumers? are interested in considering in the choice stage, like turning down or marking page in a catalog, but not necessarily purchase on that visit. In contrast, items are placed in traditional shopping carts after alternatives have been considered, evaluated and a choice to purchase has been made at the conclusion of the second stage choice process discussed in literature. Further, abandoning an online shopping cart with the click of a mouse on an external hyperlink to jump to another website or close the browser represents the default option and is relatively easier to do, than registering, providing financial information to complete the purchase process. ** It is a lot more embarrassing to abandon a shopping cart at the checkout lane in a bricks and mortar store. This might explain why drop-off rates of 2-3% at offline stores may be very difficult to achieve at online stores." == When it comes to the service industry, research shows that the "loyalty to the service provider is higher when the service is chosen online than offline." Read "Customer Satisfaction and Loyalty in Online and Offline Environments." Venkatesh Shankar, Amy K. Smith, Arvind Rangaswamy. Oct. 2000 http://e-commerce.mit.edu/papers/ERF/ERF218.pdf Abstract: "In this paper, we address the following questions that are becoming increasingly important to managers in service industries: How are the levels of customer satisfaction and loyalty for the same service different when chosen online versus offline? What are the unique drivers of online customer satisfaction? How is the relationship between customer satisfaction and loyalty in the online environment different from that in the offline environment? We propose a conceptual framework and develop hypotheses about the drivers of customer satisfaction and loyalty, the relationship between satisfaction and loyalty, and the role of the online medium. We test the hypotheses through a simultaneous equation model using two data sets of online and offline customers in the lodging industry." "The results show that whereas the levels of customer satisfaction for a service chosen online is the same as when it is chosen offline, loyalty to the service provider is higher when the service is chosen online than offline. Service encounter satisfaction for a service chosen online is higher when information content at the web site is deeper. In addition, the online medium also strengthens the relationship between overall satisfaction and loyalty, and appears to foster a reciprocal relationship between loyalty and satisfaction, such that satisfaction increases loyalty, which in turn, reinforces satisfaction. These results suggest that, contrary to popular fears, the online medium provides an attractive opportunity for service providers to acquire loyal customers. The results imply that online service providers should not only invest in service quality improvement initiatives, but also maintain web sites that offer a good online experience for their customers. They should also focus directly on loyalty-building initiatives, such as frequent online user reward programs." == Is impulse a factor? "Interactive E-Commerce: Promoting Consumer Efficiency or Impulsivity?" Junghyun Kim and Robert LaRose. JCMC 10 (1), Article 9, November 2004 http://jcmc.indiana.edu/vol10/issue1/kim_larose.html Abstract: "Previous research established that online shopping activity might be caused by impulse as much as by rational thinking about the conveniences of e-commerce. Interactive features of ecommerce sites, such as email alerts of special offers and "clickable" product arrays, may stimulate unregulated buying activity by undermining consumer self-regulation, but this connection has not been empirically verified. In this study, structural equation modeling techniques were used to model the relationship of interactive e-commerce features to online buying activity with a sample of 174 college students. Recreational shopping orientation predicted the usage of interactive shopping features thought to promote unregulated purchases, increasing deficient self-regulation, and leading to increased online buying activity. Convenience shopping orientation had a direct impact on buying activity, but it did not influence buying activity through the usage of convenience shopping features. Convenience shopping orientation also contributed to the usage of recreational shopping features that promoted deficient self-regulation. Overall, the model explained fifty percent of the variance in online buying activity." == Recent 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. See "Online Consumers Window Shop More than Impulse Buy." By Jack M. Germain E-Commerce Times. 05/02/05 http://www.ecommercetimes.com/story/42761.html Also see "Majority of Online Shoppers Visit Aggregator Web Sites First; Shopzilla Survey Reveals That 71% of Internet Shoppers Find Better Value and More Special Offers Online Than Offline." Business Wire, March 23, 2005 http://www.findarticles.com/p/articles/mi_m0EIN/is_2005_March_23/ai_n13465809 == Now that consumers have both online and offline shopping choices, brick and mortar stores are starting to serve dual purposes! For example, when buying books, consumers head to online sites - while using offline bookstores as dating venues! Read "Love is in the Aisle; Shopzilla Survey Reveals That Offline Bookstores are Becoming Dating Venues While Online Bookstores Are Where People Buy." Business Wire, March 13, 2006. http://www.findarticles.com/p/articles/mi_m0EIN/is_2006_March_13/ai_n16103646 == Also see "Switching to Electronic Stores: Consumer Characteristics and the Perception of Shopping Benefits," by Ruby Roy Dholakia and Outi Uusitalo. http://ritim.cba.uri.edu/wp2002/pdf_format/Switching%20to%20electronic%20stores%20-%20FINAL%20-%20IJRDM%202002.pdf == As you can see, the research focus concerning your question topic varies considerably. However, I hope the studies I have compiled prove helpful! Sincerely, umiat Search Strategy difference in shopping behavior online vs offline is impulse buying greater online? consumer spending online vs offline consumer behavior offline vs online consumer shopping ecommerce vs traditional