Magazine article Journal of Services Research

Structural Equation Modeling of Factors That Influence Consumer Internet Purchase Intentions of Services

Magazine article Journal of Services Research

Structural Equation Modeling of Factors That Influence Consumer Internet Purchase Intentions of Services

Article excerpt

The increasing popularity of the Internet has led to the emergence of a new genre of information systems (IS) services. The Internet is considered a technology asset because of its ability to disseminate large volumes of information quickly and efficiently while breaking geographical barriers (Violino, 1996). IDC (Internet Data Center) shows that the number of internet users around the world is expected to reach 943 million by 2005 and that the daily traffic may reach 93 times of what it was in 2000 an annual growth of 147% traffic annually is expected (Nua Internet Survey, 2002a). The Internet provides several advantages over other media and works as an information gathering tool to the time constrained consumer (Schonland and Williams, 1996), besides purchase can also be completed on the Internet. IDC projects that the number of home Internet shoppers will increase from 119 million in 2001 to 317 million in 2005 (Nua internet Survey, 2001). This should increase opportunities for business on the Internet.

The Internet causes "disintermediation" allowing the consumers to bypass the retailers or travel agencies who carry out the jobs at commissions making products and services more expensive. The Internet can therefore be advantageous to both the supplier and consumer. According to Connolly et.al. (1998), the Internet has the capability of attracting new markets. Incidentally, despite all the outlined trends, with the exception of software, hardware, travel services, and few other niche areas, shopping on the Internet is far from universal even among people who spend long hours online, (Butler & Peppard, 1998).

Various studies have documented consumer behavior on the Internet. They include those that gather Internet user profile and demographics. Donthu and Garcia, (1999) found that Internet shoppers are different from general Internet users. Their study showed that the Internet shopper is generally older and makes more money than the typical Internet user and holds a more positive attitude towards direct marketing. The OECD, (1998) found that the online consumers are generally younger and more highly educated than conventional consumers. Goldsmith and Bridges (2000) concluded that the Internet shopper has a more positive attitude towards the aspects of Internet shopping as compared to the non-buyers. Limayem, Khalifa and Frini (2000) predicted that personal innovativeness and perceived consequences determine consumer online buying.

There is also a body of knowledge that has attempted to examine the consumer perceptions of the obstacles hindering the development of online shopping. Jarvenpaa & Todd (1997) found that 31% of respondents were disappointed with the product variety and 80% had at least one negative comment about customer service on the Internet. The Forrester survey (1999) also found that consumers consider the lack of security as one of the main factors inhibiting consumers purchasing from online.

Design of webpages and their accessibility also affect the willingness of consumers to purchase online. Ho and Wu (1999) concluded that homepage presentation is a major antecedent of consumer satisfaction. While Dholakia and Rego (1998) found that daily hits of WebPages was strongly influenced by the frequency of updates and number of links to other web sites. Trust has also been regarded as a variable in consumer-marketer relationships as it provides expectations of successful transactions. Trust has been suggested by various researchers as an important element of consumer intentions to adopt B2C e-commerce (see examples: Mcknight, Choudhury & Kacmar, 2002; Jarvenpaa, 1999).

Various conclusions can then be drawn from this review regarding empirical studies of consumer behavior on the Internet. First, the area is still in its infancy state yet, due to the nature of the Internet, it's punctuated with turbulence (Limayem, Khalifa and Frini, 2000). As a result, the literature will remain fragmented and there is a possibility of a lack of good understanding of factors that influence decisions to buy from the Internet. …

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