In 2000, the average online shopper abandoned two to three shopping carts in a 90-day period. This amounted to a sales loss of $175 million. To what extent is perceived consumer risk the cause of these lost sales? If only 10 percent of the shopping carts were left behind because of the perceived customer risk fears, the loss to business would be substantial. A whole new dimension in consumer risk comes into play in the online shopping arena, which includes no interpersonal contact, and the format doesn’t even often fit the traditional business definition for being “customer friendly”. When problems develop without human contact, for example, the consumer has to be unusually proactive to rectify the situation and may even have to pay additional shipping charges to obtain satisfaction. When making an Internet purchase, a consumer immediately faces up to five concerns related to merchandise characteristics. They are listed below along with sample questions showing how a consumer might verbalize these concerns.
1. Style- When the merchandize arrives will it go with my wardrobe? Will the item coordinate with the furnishings in my home?
2. Color- Will the color really be what I see on the seller’s Website?
3. Fabric- Will the fabric have the texture and elegance simulated on the site?
4. Size- Will it fit?
5. Complexity- Will it be simple to assemble or operate?
6. Security- Will my credit information be secure while in electronic transit to the vendor?
When a consumer’s answers to question in all six areas are “yes” a business has a product that can be presented and sold on the Internet, via a secure transaction. In other words, from the consumer’s viewpoint, it is a safe product. It presents little risk in terms of security, style, fabric, color, size and/or complexity. Simply put, the product classifications where consumers have few (or low-level) concerns about merchandize also are those that have substantial market shares of online sales.
Whether a consumer is buying an item from a catalog, online or at a local store, the consumer has financial, product, time and social concerns. Because of the inherent impersonal nature of Internet transactions, the online sales environment also has spawned a new set of perceived risks that are related to merchandise characteristics and security. As a result, consumer’s purchasing patterns online are affected by their perception of risk in ways that are very different from what happens in other selling arenas. The best products that sell on the Internet are those that consumers perceive as safe.
Source by AJAY SHARMA