Chapter 16 – Consumer Cyberpsychology and Online marketing

Chapter Summary

The Rise of Online Shopping

• New ways of engaging customers, new business practices, and a global market have all combined to shift commerce online.

Who Shops Online?

• Customers can be profiled or segmented according to their characteristics.
• A typology of the global online consumer describing consumers based on their psychographic characteristics and their shopping attitudes and behaviours, segments them into four types; shopping lovers, direct purchasers, suspicious browsers, and incompetent consumers.
• These consumers exhibit different patterns of behaviour online, and also frequent distinctive online spaces.

Factors Affecting Online Shopping Acceptance

• The theory of reasoned action (TRA) and the technology acceptance model (TAM) have been used to explain the acceptance of e-commerce.
• The other most common beliefs examined in online shopping adoption are trust, perceived risk, security and privacy concerns, previous shopping experience, self-efficacy, convenience, innovativeness of the user, enjoyment and social influence.
• Attitude towards shopping online is the most influential variable in predicting intent to shop online.
• Convenience has become a more significant driver of intention to shop online.

Motivation for Shopping Online

• Hedonic and utilitarian motivations drive the behaviour of different consumer segments.
• The decision to shop online is at least partly an emotional one. Pride and excitement have the potential to be amplified by social media in sharing shopping experiences.

Consumer-Brand Relationships

• The internet has changed the way that brands and customers interact.
• Building a strong brand social network pages on social platforms can gain greater brand awareness, consumer-brand relationships, transmission of positive word of mouth (WOM) traffic.
• Expected benefits from participation drive enthusiasm for a brand and increase interaction.
• This can have a significant effect on consumer choices.
• Online product reviews have a significant effect on sales elasticity
• The most helpful characteristics of product reviews for decision-making are the quality of arguments, the usefulness of the reviews, and the credibility of and trust in the reviews.
• Positive reviews have a marginally more positive impact on purchase intention than negative reviews do on reducing intention.

eLoyalty and Retention of Customers

• Long lasting customer relationships are considerably more valuable than once-off transactions.
• eLoyalty is a favourable attitude towards an online business, intention to repurchase, and the likelihood of recommending the brand to a friend.
• There are three areas where eLoyalty can be won or lost; pre-purchase, during-purchase, and after-purchase.
• Consumers who feel that they are not satisfied or getting value from a transaction are more likely to look elsewhere for their purchases.

Decision-Making and Purchase Satisfaction

• The internet has brought consumers expansion of freedom of choice and of information.
• Decision difficulty has increased by increasing task complexity, trade-off difficulty and preference uncertainty.
• Decision difficulty can result in poor choice-making.
• Coping strategies include avoiding making the decision, and engaging in choice simplification.
• All of these decisions may lead to sub-optimal purchases.
• Excessive choice can lead to decision regret and diminished satisfaction.
• Decision-making aids can help towards resolving these problems.

Persuasion

• Creating successful human computer interactions requires the motivation and persuasion of people.
• There are four ways in which computers, or technology, are used as tools for persuasion: Increasing self-efficacy; providing tailored information; triggering decision-making; and simplifying or guiding people through a process.

The Impact of Design on Persuasion

• The more credible a website is, the greater its persuasive ability.
• The most important elements of a website for influencing credibility are the design look and the information structure.
• Visually fluent homepages lead to a greater preference for the site and higher browsing and revisit intentions
• Persuasive strategies are often built into the design of eCommerce websites as well as social commerce.
• For example, scarcity and urgency are often activated through limited-time offers, consensus is used to indicate that a product or brand is desirable because others like it or have purchased it.
• Consumers are increasingly willing to use mobile payment methods because of their simplicity and convenience, however, people paying by card are more likely to spend more than those paying with cash.

What Makes Content Viral?

• Many advertisers attempt to harness the power of viral advertising, as it can be a very cost effective and successful way to exploit the power of WOM to communicate about a brand.
• The decision by the consumer to spread the viral ad is entirely voluntary,
• The arousing emotionality of content shapes the virality of it.
• Positively emotional content is more likely to be shared than negative.
• People who are more individualistic and seek affection are more likely to spread viral content.