Online Shopping Essay Example for Free

Online Shopping EssayOnline shop or online retailing is a form of electronic commerce accommodateing consumers to directly buy goods or operate from a seller over the net without an intermediary service. An online shop, e-shop, e-store, Internet shop, web-shop, web-store, online store, or literalistic store evokes the physical ana logy of buying proceedss or services at a bricks-and-mortar retailer or obtain center. The process is c everyed business-to-consumer (B2C) online obtain. When a business buys from another(prenominal) business it is called business-to-business (B2B) online obtain. The strikingst online retailing corporations atomic number 18 E-Bay and Amazon.com, both of which are based in the US.HistoryIn 1990, Tim Berners-Lee created the first World Wide Web server and browser.1 It open(a) for commercial use in 1991. In 1994, other advances took place, such as online banking and the opening of an online pizza shop by Pizza Hut.1 During that same year, Net scape introduced SSL encryption of info transferred online, which has become essential for secure online shop. Also in 1994, the German company Intershop introduced its first online shopping system. In 1995, Amazon.com launched its online shopping site, and in 1996 eBay appeared.CustomersOnline customers moldiness possess gateway to a computer and a method of payment.Generally, higher levels of education, income, and occupation of the head of the household correspond to more favorable perceptions of shopping online. Also, increased exposure to engineering science increases the probability of underdeveloped favorable attitudes towards new shopping channels.2In a December 2011 study, Equation Research found that 87% of tablet users made an online exertion with their tablet device during the early holiday shopping season.LogisticsConsumers find a product of interest by visiting the website of the retailer directly or by searching among alternative v interceptors development a sh opping search engine.Once a particular product has been found 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 stuffy store. A checkout process follows (continuing the physical-store analogy) in which payment and delivery education is collected, if necessary. almost stores allow consumers to sign up for a lasting 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. slight sophisticated stores may affirm on consumers to ph wiz or e-mail their places (though credit card numbers are not accepted by e-mail, for gage closes).PaymentOnline shoppers commonly use a credit card to make payments. However, some systems enable users to create accounts and pay by alternative means, such as* Billing to mobile phone s and landlines45* Cash on delivery (C.O.D., offered by very few online stores)* Cheque/ Check* Debit card* Direct debit in some countries* Electronic money of variant types* Gift cards* Postal money come in* Wire transfer/delivery on payment* Invoice, particularly popular in some markets/countries, such as SwitzerlandSome sites pull up stakes not accept international credit cards. Some require both the obtainrs mission address and shipping address to be in the same country in which the site does its business. other(a) sites allow customers from any country to send gifts anywhere. The monetary part of a transaction might be processed in real time (for example, letting the consumer know their credit card was declined forward they log off), or might be done later as part of the fulfillment process.Product deliveryOnce a payment has been accepted the goods or services kitty be delivered in the following ways.* Down onusing This is the method often used for digital media prod ucts such as software, music, movies, or images. * Drop shipping The order is passed to the manufacturer or third-party distri notwithstandingor, who ships the item directly to the consumer, bypassing the retailers physical location to save time, money, and space. * In-store pick-up The customer orders online, finds a local store using locator software and picks the product up at the closest store. This is the method often used in the bricks and clicks business model. * Printing out, provision of a code for, or emailing of such items as addition tickets and scrip (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 eligility (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). * Shipping The product is shipped to the customers address or that of a custo mer-designated third party. * Will call, lCOBO (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 systems allow the offline administration of products and categories. The shop is therefore generated as HTML files and graphics that hobo be uploaded to a webspace.the systems do not use an online database. * A high end solution groundwork be bought or rented as a stand-alone program or as an addition to an enterprise resource planning program. It is ordinarily installed on the companys own webserver and may integrate into the existing supply chain so that ordering, payment, delivery, accounting and warehousing can be automated to a vast extent. * Other solutions allow the u ser toregister and create an online shop on a portal that entertains multiple shops at the same time.* Open source shopping cart packages complicate advanced platforms such as Interchange, and off the shelf solutions as Avactis, osCommerce, Shopify, Magento, Zen Cart, VirtueMart, Batavi, PrestaShop, E-Junkie, Clickbank, Fetch, DPD, Pulley, BitBuffet, Dbox, PayLoadz, FastSpring, Cerizmo, Digital Content Center, byteCommerce, PHPurchase.6 * Commercial systems such as BigCommerce can also be tailored to ones needs so the shop does not have to be created from scratch. By using a pre-existing framework, software modules for various functionalities required by a web shop can be adapted and combined.Online shoppingLike some online auction websites, many websites allow elflike businesses to create and maintain online shops (ecommerce online shopping carts), without the complexity that involved in purchasing and developing an expensive stand-alone ecommerce software solutions.DesignCust omers are attracted to online shopping not only because of the high level of convenience, but also because of the broader selection, competitive pricing, and greater access to information.78 Business organizations seek to offer online shopping because it is much lower exist compared to bricks and mortar stores, offers access to a world wide market, increases customer value and builds sustainable capabilities.clarification neededInformation loadDesigners of online shops are concerned with the effects of information load whether consumers can be given too much information in virtual shopping environments. Information load is a product of the spatial and temporal arrangements of stimuli in the webstore.10 Compared with conventional retail shopping, the information environment of virtual shopping is enhanced by providing redundant product information such as comparative degree products and services as well as various alternatives and attributes of each alternative, etc.11Two major d imensions of information load are complexity and novelty.12 Complexity refers to the number of unalike 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 expectationsA successful webstore is not just a good looking website with dynamic technical features, listed in many search engines.13 In addition to disseminating information, it is about building relationships and making money.Businesses often attempt to adopt online shopping techniques without perceptiveness them and/or without a sound business model, producing webstores that support the organizations culture and brand name without satisfying consumers expectations. User-centered design is critical. Understanding the customers wants and needs and living up to pro mises gives the customer a reason to come back and meeting their expectations gives them a reason to stay. It is important that the website communicates to the customer that the company cares about them.13Customer needs and expectations are not the same for all customers. Age, gender, experience, culture are all important factors. For example, Japanese cultural norms may lead users there to feel privacy is particularly critical on shopping sites and emotional involvement is highly important on financial pensions sites.9 Users with more online experience focus more on the variables that directly enamor the task, season pundit users focus on understanding the information.14To increase online purchases, businesses must expend significant time and money to define, design, develop, test, implement, and maintain the webstore.13 It is easier to lose a customer than to gain one and even top-rated sites will not succeed if the organization fails to practice common etiquette such as retur ning e-mails in a timely fashion, notifyingcustomers of problems, macrocosm honest, and being good stewards of the customers data.13 Because it is important to eliminate mis draw a bead ons and be more appealing to online shoppers, many webshop designers study research on consumer expectations.15User interfaceAn automated online assistant, with potential to enhance user interface on shopping sites.The most important factors determining whether customers return to a site are ease of use and the presence of user-friendly features.16 Usability testing is important for finding problems and improvements in a web site. Methods for evaluating usability include heuristic evaluation, cognitive walk through, and user testing. Each technique has its own characteristics and emphasizes unlike aspects of the user experience.16Market shareE-commerce B2C product sales come ined $142.5 one million million million,3 representing about 8% of retail product sales in the unite States.17 The $26 bill ion worth of clothes sold online represented about 13% of the domestic market,18 and with 72% of women looking online for apparel, it has become one of the most popular cross-shopping categories.19 Forrester Research estimates that the United States online retail industry will be worth $279 billion in 2015.20 There were 242 million people doing online shopping in China in 2012.21For 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 miss of affordable Internet access.AdvantagesConvenienceOnline stores are usually available 24 hours a day, and many consumers have Internet access both at work and at home. Other establishments such as internet cafes and schools provide access as well. A visit to a conventional retail store requires travel and must take place during business hours.In the event of a problem with the item it is not what the consumer ordered,or it is not what they expectedconsumers are concerned with the ease with which they can return an item for the correct one or for 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).22 Information and reviewsOnline stores must describe products for sale with text, photos, and multimedia files, whereas in a physical retail store, the actual product and the manufacturers packaging will be available for direct inspecti on (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 intentional 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 now blogs gives customers the option of shopping cheaper organise 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-mail or phone calls to handle customer questions.Price and selectionOne advantage of shopping online is being able to quickly seek out deals for items or services with many different v endors (though some local search engines do exist to help consumers locate products for sale in nearbystores). Search engines, online price analogy services and discovery shopping engines can be used to look up sellers of a particular product or service.Shipping costs (if applicable) cast down the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax 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..DisadvantagesFraud and security concernsGiven the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud on the part of the merchant than in a physical store. Merchants also risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the online purchase. With a warehouse instead of a retail storefront, merchants face less risk from physical theft. upright Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the merchant. However, one must good-tempered 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. Identity theft is lock in a concern for consumers when hackers break into a merchants web site and steal names, addresses and credit card numbers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to require revelation 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 falsifyd into feeding private information to a system operated by a beady-eyed 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 the online shoppers 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 known stores, or attempting to find independent consumer reviews of their experiences also e nsuring 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 trust mark or trust seal. * Before buying from a new company, evaluate 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 uninfected and reasonable refund and return policy is clearly stated and whether there are hidden price inflators, such as excessive shipping and manipulation 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 swallow with HTTPS. * Using strong passwords, without personal information. Another option is a pass phrase, which might be something along the lines I shop 4 good a buy These are difficult to hack, and provides a variety of upper, lower, and special characters and could be site specific and 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. Whenever you purchase a product, you are departure to be required to put in your credit card information and billing/shipping address. If the website is not secure a customers information can be affable to anyone who knows how to obtain it. Most large online corporations are inventing new ways to make fraud more difficult, however, the criminals are constantly responding to these developments with new ways to manipulate the s ystem.Even though these efforts are making it easier to protect yourself online, it is a constant fight to maintain the lead. It is advisable to be aware of the most current engine room and scams out there to fully protect yourself and your finances.20. One of the hardest areas to deal with in online shopping is the delivery of the products. Most companies offer shipping insurance in slickness the product is lost or damaged however, if the buyer opts not to purchase insurance on their products, they are generally out of luck. Some shipping companies will offer refunds or compensation for the damage, but it is up to their discretion if this will happen. It is important to realize that once the product leaves the hands of the seller, they have no duty (provided the product is what the buyer ordered and is in the specified condition). Lack of full cost disclosureThe lack of full disclosure with regards to the total cost of purchase is one of the concerns of online shopping. 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 as additional fees such as shipping are often not be visible until the final tread 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. Some services such as the Canadian based Wishabi attempts to include estimates of these additional cost,23 but nevertheless, the lack of general full cost disclosure remains a concern.PrivacyPrivacy of personal information is a significant issue for some consumers. opposite legal jurisdictions have different laws concerning consumer privacy, and different levels of enforcement. legion(predicate) consumers wish to avoid spam and telemarketing which could result from supplying contact information to an online merchant. In response, many merchants promise not to us e consumer information for these purposes, or provide a mechanism to opt-out of such contacts.Many websites keep track of consumers shopping habits in order to suggest items and other websites to view. Brick-and-mortar stores also collect consumer information. Some ask for 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.Hands-on inspectionTypically, only simple pictures and or descriptions of the item are all a customer can rely on when shopping on online stores. If the customer does not have prior exposure to the items handling qualities, they will not have a full understanding of the item they are buying. However, Written and Video Reviews are readily available from consumers who have purchased similar items in the past . These can be helpful for prospective customers, but these reviews can be sometimes subjective and based on personal preferences that may not reflect end-user satisfaction once the item has been received.Because of this, many consumers have begun going to real-world stores to view a product, before purchasing online, a practice known as showrooming24 (using the store as a showroom for the online merchant). Brick-and-mortar merchants have responded with various countermeasures. For example, Target has requested distributors give them equally low prices, or alternatively, exclusive products available at their store only.24Product suitabilityThis section needs additional citations for verification. Please helpimprove this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (March 2012)Many successful purely virtual companies deal with digital products, (including information storage, retrieval, and modification), music, movies, office sup plies, education, communication, software, photography, and financial transactions. Other successful marketers use drop shipping or affiliate marketing techniques to facilitate transactions of tangible goods without maintaining real inventory.Some non-digital products have been more successful than others for online stores. Profitable items often have a high value-to-weight ratio, they may involve embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers. Items which can fit in a standard mailboxsuch as music CDs, DVDs and booksare particularly suitable for a virtual marketer.Products such as spare parts, both for consumer items like washing machines and for industrial equipment like outward-moving pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outletsin such cases, e-commerce solutions in spares do n ot compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number.Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittingsmost notably clothingand products where colour integrity appears important. Nonetheless, some web sites have had success delivering groceries and clothing sold through the internet is big business in the U.S. ingatheringHigh-volume websites, such as Yahoo, Amazon.com and eBay, offer hostingservices for online stores to all size retailers. These stores are presented within an integrated navigation framework. Collections of online stores are sometimes known as virtual shopping malls or online marketplaces. Impact o f reviews on consumer behaviourOne of the great benefits of online shopping is the ability to read others reviews, which could be from experts or simply mate shoppers on one product and service.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 the States 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 and other factors that come into play when consumers are trying to decide how to spend their money on which product or service. fit in to that research,25 reviews on electronics (57%) such as DVD players, cell phones or PlayStations and so on, reviews on cars (45%), and reviews on software (37%) play an important role and have influence on consumers who tend to make purchases and buy online.In addition to online reviews, peer recommendat ions on the online shopping pages or social media play a key role26 for online shoppers while researching future purchases of electronics, cars and travel or concert bookings.27 On the other hand, according to the same research,25 40% of online shoppers indicate that they would not even buy electronics without consulting online reviews first.