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The Role of Factors Affecting the Decision Making of Buyers in Online Sales, and Predicting of the Future Conditions of E-Stores Engaging in Online Sales

Javad Zebardast Gashti*

Master of Business Administration, Islamic Azad University, Iran

Ibrahim Chirani

Faculty of Management and Accounting, Islamic Azad University of Rasht, Iran

*Corresponding Author:
Javad Zebardast Gashti
Master of Business Administration
Islamic Azad University, Iran
Tel: +982147911
E-mail: zebardast.asu@gmail.com

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Abstract

The purpose of this study is to examine the role of factors affecting the decision making of buyers in online sales, and predicting the future conditions of e-stores engaging in online sales. The statistical population of the research consisted of e-store buyers, which included 384 persons selected through Cochran's sampling method and after dispensing 450 questionnaires, ultimately 420 questionnaires were completed. This study is a descriptive research of the correlation type and we collected the data with the help of a questionnaire. We used the Likert scale to measure the research variables. We confirmed the validity of the research tool using the opinions expressed by a group of pundits and experts and the questionnaire’s reliability was confirmed by Chronbach's alpha equal to 0.812. We used the path analysis method for model fitting and the structural model exploration to investigate the research theories. The results showed that the variables such as positive feeling, website attractiveness, ease of use, quality of interaction, and quality of information have a positive impact on online buyers’ decisions, while the effect of website attractiveness on the buyers’ decision making in online sales is higher than the other factors

Keywords

Buyers’ decision making; Online sales; Predicting the conditions of buying and selling

Introduction

Nowadays, some of the buyers’ inclinations include using interconnected behaviors to achieve greater effectiveness in the decision making, reduction of information processing costs, gaining more knowledge in accordance to their decisions, and reducing the risk of choice. After several successful interactions, the customers feel confident about the service providers and suppliers. When customers have trust in the organization, they are sure that the typical company is capable of meeting their needs and desires and feel commitment toward that company [1]. The online shopping environment helps customers and buyers by providing a wide range of choices, information evaluation, precision, and comparison of goods; to spend less time for decision making. The Internet provides comparative and assessed information and might reduce the cost of searching for information and purchase decision-making effort. Although the Internet customers are mainly interacting with computer systems and cannot physically touch and feel the actual products [2], but they are using the information provided by the Internet stores to make decisions in an electronic environment. E-commerce environment based on Internet enables the customers to connect directly to the Internet stores to search the information, and buy goods and services. It should be noted that Internet buying is not based on the real experience of the purchase of goods, but depends on the visual manifestations such as image, shape, quality information and advertising of the goods. On the other hand, buying from Internet stores is like buying based on brochures because in both cases the goods are delivered by mail and the consumer cannot touch or feel the merchandise before buying. Therefore, the acceptance of online shopping and engaging in it largely depends on the consumer communications and how people interact with computers. In addition, features such as providing information, tips and guidance, and order processing within a mutual and interactive shopping tool are considered important factors in creating trust in e-commerce compared to the traditional sales [3].

On the other hand, the change of marketing philosophy, from the production and product-centered method to sales-centered method and then, the inclination toward marketing for consumer and their behavior have become increasingly important. Understanding how and why people buy something has increased the researchers’ interest to study the decision-making styles of online consumer [4]. In many works and articles related to e-commerce, there are numerous studies about the online shopping and consumer evaluation, and some of the investigations justify the existence of an experimental credit between the factors affecting the purchase and the online shopping behavior [5]. However, the new research has focused on the way the customer processes the information, purchase patterns, customer preferences, and the related fields to create more charm for the users of Internet stores. The marketing researchers argue that behind every act of purchase, there is a major process of decision making that should be investigated in full. Based on the researchers’ models and theories, factors like the method of communication with the website, ease of use, and website attractiveness are affect the logical process of Internet buyers and these studies cannot be generalized to the spontaneous and momentary situations. In this study, according to the cognitive-emotional theory proposed by Reisenzein [6], we classified the factors affecting the online purchase decisions into two general groups of appearance factors and website functionality factors. The functionality factors include the attractiveness of purchase process, ease of using the website, and diversity of website goods; and the appearance factors include the website’s apparent attractiveness, music, attractive colors, etc. These factors go back to Valacich and Parboteeah [7] studies. In a way, these factors are the variables that have the greatest impact on the feelings of online buyers during the shortest amount of time. Also, these are the variables that are mostly used by the online store managers and owners to attract more customers and keep them in the website environment [8].

Thus, having a correct understanding of online consumers and the process of purchase is highly advantageous, such as helping the managers in the decision-making process, creating a cognitive basis by analyzing the consumers, helping the lawmakers to adopt laws related to the buying and selling of goods and services, and ultimately assisting the consumers to make better decisions. Hence, the correct understanding of the online consumer behavior is highly important. In this study, we are going to investigate the factors influencing the customers’ decision during online purchases from the Internet stores so the online stores may increase the effectiveness of their tactics to develop the customers’ online shopping.

Theoretical Research Background

Online consumer shopping behavior

Online purchase from Internet stores is a spontaneous and inevitable behavior which is complicated in terms of enjoyment seeking where the speed of purchase decision hinders any thoughts, comments and reviewing of other options [9]. Rook defines the occurrence of an impulsive purchase in the cyberspace as: “When a consumer feels a sudden, usually strong, and stable urge to impulsively purchase the goods, this spontaneous impulse is complex and may cause emotional conflict [3].There are many benefits in researching into online shopping. By revealing the relative importance of factors influencing the shopping behavior, we can offer effective marketing strategies to increase the volume of online shopping of a store or on the other hand, we can help consumers to control their online shopping behavior [10].

Online shopping, not only because of its complexity, but also because of its wide popularity in a wide range of product categories, is an important research topic among researchers of consumer behavior [11]. Online shopping refers to the impulsive purchases without preplanning. Online shopping behavior is usually based on the incentive factor and it is accompanied with a feeling of thrill and delight or an uncontrollable need to buy. Like other types of comfort-seeking behaviors, the online shopping in the low to moderate levels can be an enjoyable pastime for the pursuit of sensory objectives. But high levels of these behaviors can be harmful and potentially self-destructive.

These behaviors may be caused by avoiding negative psychological states such as low self-esteem or negative attitude feelings [12]. Few studies have investigated online shopping from a psychological standpoint. The customers often act spontaneously when shopping online. The customers often choose online shopping because due to access to better products, it is more convenient to buy and very little effort is required to ship the goods from the store location to their homes (the place of use) [4]. According to surveys, 40% of Internet purchases take place online. Thus, knowledge of the factors affecting the purchase by online consumers and buyers is essential for online store managers and it helps them to devise better plans and design their Internet site and store according to the needs of the users [13].

Usually, every consumer is faced with a lot of buying decisions every day. Most companies that research the consumers’ shopping behavior try to find good answers to what consumers buy, the number and method of purchases, shopping places and the reason of purchase. Marketers can look for the answers about the consumer’s type of purchase, amount, and place of purchase through research and study, but identifying the reasons of the consumer or buyer behavior is not so simple because often the most relevant responses to these questions are in the mind, thought, and brain of the consumer [9].

Research aspects of the online consumer behavior

A key characteristic of the field of consumer behavior is its research foundation. The research conducted on online consumer behavior is usually divided into three categories for convenience. This classification is our guide which defines how should we think and identify the factors involved in the consumer acquiring behavior [9].

Decision making perspective: During the 1970’s and early 1980’s, researchers focused on the theory that online consumers are rational decision makers. This approach was rooted in psychology and economics. In this approach, the question is how consumers do realize the existence of a problem and try to solve it logically through a series of stages. These stages include problem diagnosis, study, evaluation, selection and evaluation after acquisition.

Experimental perspective: This viewpoint assumes that online consumers sometimes do not buy on the basis of completely rational decision-making. This perspective is rooted in motivational psychology and also sociology and anthropology. The researchers who adopt the experimental viewpoint use interpretive methods of research. The interpreters even record the folklore culture and community traditions to gain some understanding of the consumption process [10].

Behavioral perspective: This viewpoint assumes that strong environmental forces push the consumer to a direction in which he will buy without predetermined strong feelings or beliefs. In this moment, the consumer does not buy online through rational decision-making process or according to whim. Instead, the purchase is caused by the direct effect of behavior through environmental forces such as sales promotion tools, cultural norms, physical environment, or economic pressures. Finally, it must be noted that most purchases have a combination of the three aforementioned perspectives [14].

Systemic approach to analyze the consumer behavior: The systemic approach is a method to study the consumption goals of buyers and includes the analysis of interdependent components of behavioral systems, micro-systems and organizations with the outer environment. In this approach and attitude, the consumer and the other phenomena constitute an indivisible whole [10]. Therefore, the whole is explained by its constituents. Hence, the systemic thinking, instead of merely contemplating the components, prioritizes thinking about the online consumers’ goals. In the systemic thinking, thinking about the consumers’ behavioral systems and their constituents are the main subject and this is in line with achieving the goal of acquiring desirability of purchasing goods and services [2].

Experimental research background

Ghlilo et al. [15] through studying the impact of Internet shopping experience on consumer behavior with the use of Technology Acceptance Model (TAM) proves that we may assume the Internet shopping experience impact is fixed for all users. Because the e-business models are fully dependent on e-customer behavior, the mentioned concepts will be very useful for the e-commerce providers.

Samadi et al. [14] studied the link between relationship marketing techniques of chain stores and customers’ purchase behavior. The model was applicable to the statistical population and there was a significant correlation between the need to belong, the need for respect, and enjoying the purchase; with the need to communicate. Among tactics used in the store, tactics such as communication, customization, and preferential behavior were significantly correlated with the desire of customer to continue shopping; but there was no significant correlation between the rewarding tactics with the desire of customer to continue shopping.

Hussmann [16] studied the research used the qualitative and quantitative data to test the hypotheses related to consumers’ motivations in connection with the impulsive purchase. There was no relationship between demographic factors and characteristics of impulsive purchase in the people (others said income and gender were involved). The impulsive purchase is related to hedonistic needs of people and their tendency to satisfy their own self-esteem. Perceptions of the correct decision making are the mediator of impulsive purchase behavior. Points out that spontaneous purchase is not always a negative phenomenon due to the fact that many people may purchase goods for non-economic reasons; like having fun, buying fantasy products and social and emotional gratification.

Zhang et al. [17] examined the online shopping from different angles and concluded that the future purchase was almost unplanned and it cannot be influenced even in the store environment. studied the effect of the buyer’s available budget on the buyer’s planned purchase but their research was indecisive since they did not consider the buyer’s emotional factor as the key factor influencing the impulsive purchase [9].

Sharma et al. [18] concluded that there is a positive relationship between the ease of use, the looks of store site, and the feeling of the individual. Also in their study came to the conclusion that the more a store site becomes attractive by using factors such as music, nice pictures, and layout of subjects; the individual will feel more positive emotional arousal in the online shopping environment. Less trouble for the Internet shopper in using the site and establishing better communication with site will stimulate his/her positive feelings of the shopping process and the purchase will be more enjoyable [19,20]. Also Swinyard [21] showed that there is a positive relationship between the buyer’s communication with the site and his/her positive purchase-related emotions.

Arboty and Gilly [22] studied the effect of the visual elements of the store site on online shopping and confirmed its positive effect. The studies have generally reviewed and confirmed the relationship of these variables but the main challenge and question is about the direction and type of relationship between these variables. Therefore, this research is going to determine the direction and type of relationship between the visual attractiveness of the online store site, ease of using the online store site, feelings of the buyer, encouraging more searches by the buyer on the site, the buyer’s desire to buy online, and also the buyer’s impulse buying.

Jayawardhena et al. [19] in a study suggested that people are different from each other in terms of online shopping trends. Consumer behavior can be taken as one of the features of their lifestyle. Moreover, numerous benchmarks have been developed to measure the consumer interest in online shopping. According to the previous studies and discussions about online shopping, online shopping can be described as the individual’s opportunity to buy without previous intention, in a fast and non-reflective way.

The Conceptual Model of Research

According to the theoretical foundations, the research hypotheses were formulated as follows (Table 1).

Table 1: The theoretical foundations.

Positive feeling Buyers’ decision making in online sales
Site attractiveness
Ease of use
Quality of interaction
Quality of information

I: Positive feelings influences the decision-making of buyers in online sales.

II: Site attractiveness influences the decision-making of buyers in online sales.

III: Ease of use of e-store influences the decision-making of buyers in online sales.

IV: Quality of interaction with the buyer influences the decision-making of buyers in online sales.

V: Quality of information influences the decision-making of buyers in online sales.

Research Methodology

The studied population consists of customers of 10 online e-store sites with the highest transaction in the country. The questionnaires were provided to the customers electronically based on the Cochran’s unlimited statistical population formulae and an extra percentage to compensate for the problem of incomplete questionnaires, and it was determined to consist of 384 individuals. After dispensing 450 questionnaires, 420 questionnaires were completed.

In this research, the information collection tool is a questionnaire including the customer’s general information and 30 questions using the (5 point) Likert scale. The reliability of the questionnaire based on Cronbach's alpha was 81% which is an indication of the reliability of the questionnaire. To measure the validity, the content validity method and confirmatory factor analysis method were used. The statistical analysis of data was carried out using the descriptive statistics and structured equation methods (LISREL software) to analyze the basic routes between the variables. On the other hand, the number of questions and Cronbach's alpha of the variables studied in the conceptual model of the research are presented in the Table 2.

Table 2: Cronbach's alpha of the variables.

Variable Cronbach's alpha
Positivefeeling 0.820
Siteattractiveness 0.804
Ease ofuse 0.779
Qualityof interaction 0.793
Qualityof information 0.812
Total questionnaire 0.813

Review of the research hypotheses: To check the hypotheses, first the distribution of research data shall be investigated. To decide about the use of non-parametric or parametric tests, we examined the normal state of the data through Kolmogorov-Smirnon test. The results of Kolmogorov-Smirnov test are shown in the Table 3.

The population distribution is normal

The population distribution is not normal

According to the test results, the null hypothesis, i.e. the normal state of variables, is confirmed.

Table 3: Results of the distribution of research data reviews.

Variable Significance level-Sig Error Probability level (α) Kolmogorov stats Test result
Positive feeling 0.69 0.05 1.423 distribution is normal
Site attractiveness 0.092 0.05 1.900 distribution is normal
Ease of use 0.39 0.05 1.123 distribution is normal
Quality of interaction 0.096 0.05 1.236 distribution is normal
Quality of information 0.77 0.05 1.520 distribution is normal

Findings of the research

The structural equation modeling technique with the help of LISREL software version 8.5 was used to analysis the hypotheses, and path analysis was used to test the main hypothesis and secondary hypotheses. Table 4 shows the full titles of variables used in the research model:

Table 4: Guide to identify the abbreviations of the model variables.

Indicator Abbreviation
Positive feeling Positive feeling (PF)
Site attractiveness Attractiveness Site(AS)
Ease of use Ease of use (EU)
Quality of interaction Quality of interaction (QOF)
Quality of information Quality Information (QI)
Purchase decision Purchase decision (PD)

Testing the hypotheses

Figure 1 shows the structural model of research hypotheses in the standard estimation mode. Also, Figure 2 shows the structural model of the hypotheses in the significance coefficient mode.

internet-banking-structural-standard-estimation

Figure 1: Structural model of the research hypotheses in the standard estimation mode.

internet-banking-structural-significance-coefficient

Figure 2: Structural model of the hypotheses in the significance coefficient mode

According to the output of Figure 2, all of the coefficients above 1.96 are statistically acceptable.

Table 5 shows the results of causal analysis of the structural equations model to test the research hypotheses. The results confirm the direct effect of variables such as positive feeling, site attractiveness, ease of use, quality of interaction, and quality of information, on the online buyers’ purchase decision.

Table 5: Secondary research hypotheses tests results.

Hypothesis Standard estimate t quantity Tests result
The impact of positive feeling on decision making of online buyers 0.40 7.17 Confirmed
The impact of site attractiveness on decision making of online buyers 0.63 9.99 Confirmed
The impact of ease of use on decision making of online buyers 0.89 8.84 Confirmed
The impact of quality of interaction on decision making of online buyers .58 8.03 Confirmed
The impact of quality of information on decision making of online buyers 0.94 8.28 Confirmed

Generally, in LISREL software environment, each of the indicators obtained for the model alone do not suffice for the fitness or non-fitness of the model, but these indicators should be considered altogether. If the χ 2 and secondary appropriateness tests demonstrate the reasonable fitness of the model, the model’s fitness factors can be specified and we focus on these factors.

Table 6 shows the most important indicators and demonstrates that the model has a favorable status in terms of explanation and fitness. All indicators show the fitness of the model against the observed data.

Table 6: The goodness of fit of the research model indicators.

Fitness indicator Model value Desired value Result
χ2/df 2.27 <3.00 Good fitness
GFI 0.91 >0.90 Good fitness
AGFI 0.92 >0.7 Good fitness
RMR 0.014 <0.05 Good fitness
NFI 0.95 >0.90 Good fitness
IFI 0.95 >0.90 Good fitness
CFI 0.91 >0.90 Good fitness
RMSEA 0.071 >0.08 Good fitness

The model fitness indicators, considering that the Chi square ratio relative to the degree of freedom of less than 3, RMSEA indicator of less than 0.9, the remaining indicators are at an acceptable level, mean the measurement model is good. In other words, the model and the overall framework are significant and acceptable.

Rating test

To examine the importance and to rate the key components affecting the decision making of online buyers, we used the Friedman test and the results are shown in Table 7.

Table 7: Friedman test results.

Factors Mean Priority
Site attractiveness 3.82 1
Quality of information 3.46 2
Positive feeling 3.37 3
Quality of interaction 2.35 4
Quality of information 2.26 5

The Friedman test results show that among the components affecting the decision making of the online buyers, the components of site attractiveness, quality of information, quality of information, positive feeling, quality of interaction, and quality of information, respectively, have the highest to the lowest influence in the decision making process of online buyers.

Conclusion and Recommendations

In this study, a part of the most important factors affecting the field of decision making of online buyers in online stores were identified. The results, through the use of LISREL, confirmed all of the present 5 hypotheses. Thereafter, the buyers chose the site attractiveness as the most important factor affecting their purchase decision.

Given that the achieved results confirm the impact of emotional attractiveness of the site on the buyer’s feelings and this indicates that the desired sites, from the perspective of the buyer, are shapely sites and have stimulated their emotions during the purchase and that the apparent attractiveness of the site is very important to the buyers. So in addition to attractiveness of the environment and goods, the vastness of the store keeps the customer longer in the store environment. According to these results, it can be recommended to the managers of Internet stores to be more diligent in making their site attractive because their Internet site is like their business showcase and very effective in attracting customers and stimulating their sensations.

Online stores managers can use appropriate design, appropriate graphics, and graphics and animated designs related to the scope of their work as well as a stylish and desirable format, to render their Internet showcase more stylish and more attractive. Also, they can put together different parts of the site to achieve the desired configuration.

Also, the managers of these stores can allocate a reasonable space to the parts of the site that offer goods which attract more customers or earn more profit for the site, they can use proper colors and the buyers’ color psychology in different parts of the site compatible with the goods and services offered on the site as well as appropriate music compatible with the goods and services offered on the site and the business scope of the store to help achieve a higher attractiveness for the site and increase customers’ emotions during online shopping.

Also, the results obtained from the present research confirm the impact of the ease of using the site on the buyers’ decision making and this could be because the target sites are easy to use in terms of purchases convenient for the customers. Some practical recommendations in this area for online stores managers include the need to conduct proper marketing research to clearly define their goal of selling the goods and then professionally offer the relevant Internet products and services in that area and design their website in such a way that a wide range of Internet users of different ages and with different cultures and tastes can navigate in it. Managers of Internet stores, in addition to selling goods and services, can also buy and sell those goods and services and even second hand goods with lower prices. They can connect fruitfully with domestic and foreign Internet sites related to the scope of their work.

Online stores can include useful information related to their areas of activity and even in relation with goods and services that they offer, to increase the knowledge of their customers. They can also establish call centers and agencies to facilitate physical contact with the customers and thus, become more diligent in attracting the trust and increasing the level of customer satisfaction in relation to their use of the Internet sites. A higher emotional engagement of customers and buyers with a certain site will encourage them to spend more time to search on the website and they feel the Internet store is respecting and appreciating them as potential customers. Moreover, based on the level of dissimilarity of the site compared to other sites that provide goods and services, the people refer to that site during their Internet searches without preplanning. In the end, the researcher has some recommendations for the future researchers according to the results of the research:

1. It is recommended that the future research should determine and measure the differences resulting from different demographic characteristics and descriptive statistics.

2. Conducting this research based on experimental and longitudinal methodology.

3. Study of the factors that influence the repeated purchase from online stores.

4. Study of the impact of website attractiveness on the customers’ decision making.

5. Designing a model for the development of the quality of information and effective communication to improve online buying decisions.

Research Restrictions

The research has utilized cross-sectional data. So, there is a possibility that the logical connections may change or even lose their meaning after a long period of time. However, cross-sectional studies due to their examination of cause measurement and effect measurement are not appropriate for this kind of research and the studies must be in the form of longitudinal studies. This research had its own restrictions like other studies. Part of the research restrictions arise from the statistical population, including careless answering to questions and limiting the study to a certain company. The other part of the restrictions include scientific research limitations such as the span of theoretical concepts of the research, low number of researches that have examined these variables, abstract nature of some of the concepts and questions of the questionnaire, and limiting the information gathering tools to a mere questionnaire.

References

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