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April 1, 2005

Perceived Risk, the Internet Shopping Experience and Online Purchasing Behavior

BDBill DoolinTrinity College Dublin SDStuart DillonUniversity of Waikato FTF. ThompsonUniversity of Waikato

Key Points

This research aims to understand how perceived risk and the Internet shopping experience affect online purchasing behavior.
Survey of approximately 700 New Zealand Internet users.
Analysis focused on perceived risks and benefits associated with Internet shopping.
Investigation of the relationship between social interaction loss and online spending.
Perceived risk and benefits were significantly associated with the frequency of online purchases.
Loss of social interaction correlated with reduced online spending.
Recommendations include enhancing customer service features to mitigate perceived risks.

Abstract

This paper develops a research model of the importance of consumers’ perceived risk and the Internet shopping experience in the online purchasing behavior of Internet users. The model was tested using a survey of some 700 New Zealand Internet users. Both the perceived risk and perceived benefits of Internet shopping were found to be significantly associated with the amount and frequency of online purchases made. Loss of social interaction in Internet shopping was associated with reduced online spending. The results of the study suggest that Internet retailing Web sites should include features that enhance customer service and reduce perceived risk.

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