Academic journal article Academy of Marketing Studies Journal

The Roles of Bounded Rationality and Ethical Self-Efficacy in Online Shopping Orientation

Academic journal article Academy of Marketing Studies Journal

The Roles of Bounded Rationality and Ethical Self-Efficacy in Online Shopping Orientation

Article excerpt

INTRODUCTION

The early part of the 21st century will likely be remembered as a time when internet-based retail buying became mainstream, as shoppers worldwide transitioned from in-store shopping to shopping online. Global internet retail sales were $1.67 trillion in 2015. They grew at an annual rate of 25 percent, accounting for 7.3 percent of all retail sales activity. Expectations are that by 2019 internet-based retailing will account for over $3 trillion and 12 percent of all global retailing (Evans et al 2016). This represents only a small part of the true impact of the internet on the retail industry as the widespread adoption of mobile technology has spawned a phenomenon known as "webrooming" in which buyers consult the internet prior to making their purchases at traditional brick-and-mortar stores. Webrooming accounts for 73 percent of all in-store purchases (Frasquet et al 2015). This means that the internet played a key role in nearly 80 percent of all retail purchases in 2015, and its influence in the retail industry continues to grow as more people adopt mobile technology and social media.

The vast majority (92.7 percent) of retail transactions continue to occur in brick-and-mortar establishments. Shopping online might be more convenient for some, but others shop in stores to avoid delivery fees, to try items on for size, and to leave the brick and mortar shop with the purchased item physically in hand. Nearly 40 percent of consumers make purchases inside a physical store at least once a week, compared to just 27 percent who do the same online (Brooks 2016). Nonetheless, the online shopping sector has been growing at a rate that has outpaced the in-store sector since the late 1990s, and the trend does not appear to be ending anytime soon.

New technological products such as smartphones, tablets and smart watches are becoming more and more common as tech savvy consumers use them to purchase some items online, and to gather information about other products prior to purchasing in-store. Shopping online also informs customers at a level that is unprecedented in human history. This lowers stress levels for the average online shopper because having access to all relevant information prior to a purchase eliminates information asymmetry between buyers and sellers, resulting in a more equitable exchange, and ultimately higher customer satisfaction (Farag et al 2007). On the other hand, beyond closing asymmetries, Sinha and Singh (2014) demonstrate that online shopping may increase many perceived risks in the minds of consumers, including financial risk (the loss of money as a result of credit card spending before receiving a product, for example), product performance risk (the inability to try a product before purchase), time risk (the product may not arrive when expected), and delivery risk (a product may become damaged in transit).

Thus, internet retail shopping can be seen as a risk trade-off in which consumers trade one set of risks for another. In the past, researchers have attempted to predict whether consumers are likely to purchase online vs. in person based on a number of factors, including (1) the psychological and demographic characteristics of individual consumers (see, for example, Nepomuceno et al 2014); (2) the product category (Dai et al 2014); and (3) store image (Chang & Tseng 2013). The vast majority of research to date has been in the first of these categories as academicians strive to build a theoretical foundation and develop a reliable predictive model to determine which consumers are most likely to buy online, and which are more likely to buy in traditional retail stores.

THEORETICAL FRAMEWORK

Herbert Simon (1955) argued that the goal of a consumer getting the most for his money in every situation, which he called maximization, is nearly impossible to achieve in real life. Rather than maximize, people often "satisfice" when making decisions. …

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