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Literature Review

Discuss about the Impact of Social E-Commerce Variables for Customers Shopping Behavior.

Electronic commerce or e-Commerce is a facility to trade products through internet and social media. Technologies like mobile commerce, e-fund transfer, inventory management system, supply chain management and online marketing are introduced with the emergence of e-commerce. In modern era, use of internet, World Wide Web and e-mail has increased transactions through e-commerce. Online shopping facilitates retail sales directly to the consumer. A transformation in electronic, entertainment, apparel and consumer goods industry has been brought about by the introduction of e-commerce (Abou-Shouk, Lim & Megicks 2016). In e-commerce, the customer takes into account both the cost and the revenue at the same time. The process of cost and revenue analysis helps in making strategy decision related to marketing activity, which in turn significantly can affect the organizations’ profit. Technological advancement of electronic devices made information accessible to all in varieties of types, sizes and price. Thus, the current trend of business using World Wide Web internet, the organization in e-business occupies the centre area.  The researchers found it important to study the extent to which these companies can affect e-commerce and e-business. The success and development of these companies depend much on the global trend of adopting World Wide Web internet. Consumer behavior studies the behavior of individual customers or group of customers. Design, price, packaging, positioning, income level, age, gender all factors influences consumer behavior. Theories of the consumer behavior deals with the emotion and psychology of a consumer while buying products. Consumers are considered as ‘rational economic individual’.  Adaptation of digital technology has changed on large scale the buying behavior of the consumer. The purpose of this report is to find out the factors influencing online shopping and at the same time develop a comprehensive study on online-shopping behavior of the consumer. This report also deals with the factor that discourages consumers from the usage of online shopping.

Ecommerce is defined as the activity of buying, selling and exchanging goods and services over Internet without any physical contact between the buyer and the seller. There are four categories of E-commerce. In B2B e-commerce business transaction between companies is conducted over Internet through electronic support. According to Hyun Shik Yoon, Luis G. Occe˜na, the business enterprises that sale their products to the consumers over internet is known as B2C e-commerce. Online transaction of products and services between two customers is C2C e-commerce. In C2B, a business extracts value from the customers.

Factors Affecting Consumer Behavior in Social E-commerce

According to the journal named ‘Social commerce constructs and consumer’s intention to buy’ by Nick Hajli, social commerce has evolved as a new stream under E-commerce. It has enabled the suppliers to reach the customers through increased interaction. It has become popular through social networking sites. Social trends bring changes in e-commerce. Therefore, it is important for e-commerce retailers to engage themselves socially. Initially, while purchasing a product e-commerce is mainly used for making online transactions like payments without visiting the store physically. Shopping is considered as a social activity where individuals are interested in visiting stores with their near and dear ones and share their experiences with their peers. With the use of e-commerce sites, shoppers expect a similar kind of social experience while transacting with the sellers. Studies have revealed that consumers’ buying decision are influenced by the decision of their peers. Choice of e-commerce sites, choice of brands are some of the factors that are influenced by the decision of their friends and relatives. Social media like Facebook, Twitter are social platforms where ideas get exchanged (Doolin et al., 2012).

Retailers use social media as a platform to advertise their products. Brand name perception is shared and is modified by users on social platform. Thus, it becomes important for an organization to transform itself from an individual entity to a community entity. Visibility and awareness about the company products increases with the appreciation and recommendations on social networking sites. The strength of social media lies in its ability to spread the information worldwide (Fang et al., 2016). Thus, firms popularize their products using social media as the platform. Consumers pass through certain phases while making an online purchase.

Nick Hajli suggested that social commerce has introduced a new model of business of online commodities. Social commerce support online communication between the customers and the suppliers. This process is done on with Web2.0 application. Thus, an online community is developed which encourage the customers to share their experience and knowledge about the online purchase f goods and services.

Customers buying online products have a different experience compared to the customers buying offline commodities. According to the researchers that social media act as the social platform where consumers socialize themselves. These platforms empower the consumers to share their experiences over social networking sites. Customers can readily post their reviews and ratings on a particular product. These reviews and ratings provide important information to the potential customers. These reviews and ratings help a product to gain popularity. Customer feedback and ratings increases the level of trust (Yadav,  Rai & Srivastava 2014). However, the identity of the customers giving the reviews affects the potential consumers’ level of trust. Fake reviews and ratings are often produced to popularize a product. In case of offline shopping, the customers interact with the vendors before buying a commodity. On the other hand, in online shopping consumers rely more on the reviews and ratings. The social platform facilitates these interactions among the consumers. Members of the social media participate in different groups to increase the level of interaction.

Social Media

According to psychologist, trust is a personality trait. Those having high propensity to trust others easily tend to buy online goods as said by Hyun Shik Yoon, Luis G. Occe˜na. Trust is the focus in all economic activities. Uncertainty is the main factor in case of social transaction. Trust plays an important role when perceived risk is high. Social media increases the interaction between the people over internet. A study on social commerce shows that customers want to decrease the level of uncertainty and risk before buying any product. It is argued that e-commerce sites give a detailed account of the products and services. This is facilitated by the social networking sites. Here, customer loyalty plays a crucial factor role. Hyun Shik Yoon and Luis G. Occe˜na suggested that customer loyalty increases the revenue and profit of a business, which in turn helps in its growth and success. Technology and information techniques tend to change consumer behavior. In case of traditional shopping, consumers have some expectations from the company they have chosen to buy the products. Customers’ satisfaction and dissatisfaction influences customer loyalty and trust towards a brand/company. Trust is an important factor in all successful transaction. After sale, feedback depends much on the factor ‘trust’ (Flanagin et al., 2014). Online-shopping activity is carried through electronic medium. Therefore, the consumers cannot either touch or feel the product before buying. Based on the information provided by the retailer on the online-shopping portals, consumers make their buying decision. The availability of information with respect to time curbs decision of the consumers.

According to Hyun Shik Yoon, Luis G. Occe˜na and Nick Hajli buying intention depends various factors:

Social gender roles show distinctive differences in buying attitude. Purchasing behavior is different in a masculine society from that of a feminine society. In a masculine society, a male shopper does all the buying decision while in a feminine society a female consumer does all the purchasing decisions. Studies revealed that males are more prone to do online shopping and online transaction compared to females (Mohseni et al., 2016).

People in the age group between 18-35 years prefer online shopping. It can be assumed that this group of population belonging to this age group is busy with their career, marital relation and occupational activity. Thus, they have less time to visit stores physically (Ghandour 2015). On the other hand population belonging to the age group 60-80 years are often found avert to online shopping due to lack of knowledge to use electronic gadgets.

Social Commerce Contrast

Globalization takes business beyond domestic and national boundaries. Technological advancement is the main driving force of globalization. Consumers, investors, businesspersons are all actors in the process of globalization. E-commerce is a process of exchanging goods over internet.  All geographical boundaries disappear in business through e-commerce, making all buyers and sellers potential consumers and suppliers. Amazon, Flipkart, eBay are a few examples of business-to-consumer transactions. Globalization promotes e-commerce and online trading (Corbitt, Thanasankit & Yi 2013). E-commerce has enabled business to communicate and make transactions anytime and anywhere.

Conclusion:

In the modern era of internet, e-commerce is gaining popularity. A detailed analysis reveals the factors that influence e-commerce and online shopping behavior of the consumers. In the present time of technological advancement, E-business is a modern method of changing tools used by the organization. This report is done to identify the impact of social ecommerce variables on e-business.  These factors have contributed to the fundamental changes in the process and nature of the business management. Globally e business sector has adopted the idea of e-commerce applications. The importance of this study is to judge the variables affecting the relationship between e-commerce and sales pursuit. Here, time is considered as a important factor in e-commerce and e-business. So from the point of view of business, with less time spend on each transaction, more transaction can be done on a particular day.  This became a reason why e-commerce has replaced traditional way of shopping. For example, consumers with different income groups also have different approach towards acceptance of e-commerce.   Higher income groups are more prone to buy goods and services over internet rather than physically visiting a store. On the other hand, low-income groups still prefer visiting stores physically while buying goods and services. Again e-business and e-commerce is much more cost effective compared to traditional way as e-commerce is useful in payment both from consumer and supplier side. In e-business, and transacting through e-commerce no middleman factor play here as in case of traditional business. Hence ecommerce is much more cost effective than traditional business. For example, Dell, a company in computer business, practices the methods of e-business without using any middleman. Retailers often exploit social medium to communicate with their potential customers. Social integration provides the retailers and the marketers to better understand the consumer behavior (Wang, Yu & Wei 2012).

References:

Abarbanel, B., & Rahman, A. (2015). eCommerce market convergence in action: Social casinos and real money gambling. UNLV Gaming Research & Review Journal, 19(1), 4.

Abou-Shouk, M. A., Lim, W. M., &Megicks, P. (2016). Using competing models to evaluate the role of environmental pressures in ecommerce adoption by small and medium sized travel agents in a developing country.Tourism Management, 52, 327-339.

Agudo-Peregrina, Á. F., Hernández-García, Á.,&Acquila-Natale, E. (2016). The Effect of Income Level on E-Commerce Adoption: A Multigroup Analysis.

Chiu, C. M., Wang, E. T., Fang, Y. H., & Huang, H. Y. (2014). Understanding customers' repeat purchase intentions in B2C e?commerce: the roles of utilitarian value, hedonic value and perceived risk. Information Systems Journal, 24(1), 85-114.

Corbitt, B. J., Thanasankit, T., & Yi, H. (2013). Trust and e-commerce: a study of consumer perceptions. Electronic commerce research and applications, 2(3), 203-215

Doolin, B., Dillons, S., Thompson, F., & Corner, J. L. (2012). Perceived risk, the Internet shopping experience and online purchasing behavior: A New Zealand perspective. Electronic commerce: Concepts, methodologies, tools, and applications, 324-345.

Fang, J., Wen, C., George, B., &Prybutok, V. R. (2016). Consumer Heterogeneity Perceived Value, and Repurchase Decision-making in Online Shopping: The Role of Gender, Age and Shopping Motives. Journal of Electronic Commerce Research, 17(2), 116.

Flanagin, A. J., Metzger, M. J., Pure, R., Markov, A., &Hartsell, E. (2014). Mitigating risk in ecommerce transactions: perceptions of information credibility and the role of user-generated ratings in product quality and purchase intention. Electronic Commerce Research, 14(1), 1-23.

Ghandour, A. (2015). eCommerce Website Value Model for SMEs.International Journal of Electronic Commerce Studies, 6(2), 203.

Gong, W., & Stump, R. L. (2016). Cultural values reflected in the adoption of social networking sites. International Journal of Technology Marketing, 11(3), 360-378.

Leonard, L. N., & Jones, K. (2015). Consumer-to-Consumer Ecommerce: Acceptance and Intended Behavior. Communications of the IIMA, 14(1), 1.

Mohseni, S., Jayashree, S., Rezaei, S., Kasim, A., &Okumus, F. (2016). Attracting tourists to travel companies’ websites: the structural relationship between website brand, personal value, shopping experience, perceived risk and purchase intention. Current Issues in Tourism, 1-30.

Wang, X., Yu, C., & Wei, Y. (2012). Social media peer communication and impacts on purchase intentions: A consumer socialization framework.Journal of Interactive Marketing, 26(4), 198-208.

Yadav, M. K., Rai, A. K., & Srivastava, M. (2014). Exploring the Three-Path Mediation Model: A Study of Customer Perceived Value, Customer Satisfaction Service Quality and Behavioral Intention Relationship.International Journal of Customer Relationship Marketing and Management (IJCRMM), 5(2), 1-20.

Yuan, X., & Chu, K. (2013). When and how information quality matters: Perceived customer orientation and customer satisfaction. Advances in Information Sciences and Service Sciences, 5(9), 105.

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