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 objective of this study is to investigate factors that influence Internet purchasing. A model to explain the influence of different factors is developed based on the Theory of Reasoned Action and empirically tested through a survey. Respondents indicated that subjective norms and trust have no significant influence on purchase intentions. This contradicts documented literature, but could be attributed to the fact that, as demographics change and access to the Internet increases, consumer perception and factors that influence intentions to purchase on the Internet change too. This study is focused on college going respondents because it was felt that they would provide valuable information because of their future of e-commerce. The objective of this study is to investigate factors that influence Internet purchasing. A model to explain the influence of different factors is developed based on the Theory of Reasoned Action and empirically tested through a survey. Respondents indicated that subjective norms and trust have no significant influence on purchase intentions.

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. …

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