Written by Masters Student at Lund University
Introduction
Since the rise of the internet, websites have become an increasing source for customers to purchase their goods (Zahedi, F.M. & Song, J. 2009). This has created a great opportunity for companies to replace their existing stores into virtual ones and thereby reach customers more efficiently and expand the geographical range (Nalchigar, S. & Weber, I. 2012). How to attract and retain online consumers is an important issue among retailers. But who are these new customers who buy on the internet? What motivates these customers to browse on the web? What are their likes and dislikes? There is a growing need for new theories on customer behavior on the internet, because company’s need to target this new group of customers. These new theories will make it possible for companies to redefine their marketing- and business strategy fitting with the new online customer. This leads to the following research question: who is a company’s new customer in the Internet era?
Theory
In order to understand the diverse factors of behavior of online consumers, this paper will discuss the different kind of consumers and in particular the difference between hedonic and utilitarian customers. This is followed by the difference gender related behavior of men and women.
According to Rodgers, Wang, Rettie and Alpert (2007) there are four primary motives for the use of internet: research (information acquisition), communication (socialization), surfing (fun) and shopping (buying of goods). Bourdeau, Chebat and Couturier (2002) make a distinction between: social, utilitarian, hedonic, learning and purchasing as value factors for internet use. Aljukhadar and Senecal (2011) states three segments in the online consumer market: the basic communicator (email), the lurking shopper and the social thrivers (chatting, blogging etc.). These segments are categorized on gender, age, education, income and use of internet. The basic communicators are for 75 percent made out of high educated woman with a distributed age and income. The lurking shoppers are also highly educated women and men who are mainly mid- and elderly aged with a high income. At last the social thrivers, who have the lowest education level, are in the youngest age group and have the lowest income. The hours spend on the internet are respectively 12.4, 16.7 and 20.7 per weak.
Consumers are split into two categories according to Scarpi (2012) the goal-oriented and experiential buyers. She thinks goal-oriented consumers only shop when rational necessary and see it as a mean to an end. She thinks experiential consumers enjoy the shopping experience and are not particular efficient. Griffin, Babin and Modianos (2000) separate consumers in hedonic and utilitarian. They describe hedonism as shopping related to entertainment, pleasure and fun rather than task completion and therefore reflect the experiential side of shopping. They describe utilitarianism as task related, rational, a necessity rather than entertainment and therefore reflect the goal-oriented side of shopping. Task in this context, is the online purchase of goods.
Scarpi (2012) found that hedonic customers are more profitable than utilitarian customers on the internet. But then she states that utilitarian customers are also profitable and so they should not be neglected. She argues the mean focus of online retailers should be hedonic consumers as they are more profitable and they have a higher rate of returning. To finish she argues hedonic customers spend more money online because they buy more items and have more unplanned purchases. Therefore entertainment on a website translates into higher profits. Gao and Koufaris (2006) assert that both utilitarian and hedonic customers value important information about their purchase on the website. They warn company’s to not forget the hedonic customers with their preference for entertaining. Companies have to be careful that entertaining does not become irritating content, which will have a negative impact.
According to Hansen and Jensen (2009) women are more hedonic-oriented compared to men, who are more utilitarian-oriented. They argue that men are more to the point shoppers and women on the other hand shop for fun. Previous research Park, Yoon and Lee (2009) found women experience more risks than men toward purchasing goods, especially experience goods. Women’s low affection toward online shopping can be explained by their low cognitive online shopping attitude (Hasan, 2010). Dittmar, Long and Meek (2004) argue that women still associate barriers with online shopping and for that reason still prefer conventional shopping. In the beginning of the internet, online shopping was quite male-oriented. The products available for sale were in interest of men. Now a day’s this has changed as the variety of online goods has expanded. However women miss the lack of social interaction of conventional shopping and would prefer to be able to evaluate the physical object of interest (Dittmar et al. 2004). They argue that men prefer online shopping over conventional shopping because it is easy, saves money and is efficient. A second barrier for women according to Hansen and Jensen (2009) is the perceived ease of selecting items of purchase online. They found that men are significantly influenced by the amount of fun they perceive during online shopping.
Case discussion
In the following two cases will be presented regarding gender related motivations of online consumers.
ComScore
ComScore is a company that measures over a trillion online interactions each month from 172 countries. These findings are turned into insights and actions off people browsing on the internet. This particular research case is about online spending behavior of women versus men.
In the year 2010, women bought and spend more money in online transactions than men. Globally women represent 45.7 percent of the internet population and men 54.3 percent. In the U.S. women represent slightly less than half the population, but they are accountable for 58 percent of the e-commerce. Men still dominate websites with subjects such as sport, cars and online trading. But women are emerging the subjects such as gaming and handling their money online. In developing countries women are still the minority, but this is changing and developing.
A clear distinction between men and women can be made, when looking at the reason behind posting a tweet on Twitter. Men mainly use twitter to post their own tweets while women like use the service as a conversation medium and search for deals. Women spend a larger percentage of their time on communication and social networking sites than men. Women also spend 20 percent more time on retail sites than men. In addition they out-shop men in every retail category except for: computer hardware/software, electronics, sports and music. Women spend most of their money on purchases like apparel, accessories and jewelry. Furthermore, women spend more money on toys, hobbies and video games, but it is reasonable to assume, part of these are purchased for their children.
Male consumers’ motivations for online information search and shopping behavior
In this case in-depth interviews and observations were used to discover the motivations behind online shopping behavior of men. The informants are people who engage in online information search and online shopping. Thirteen men were chosen, who are aged between 20 and 42 and have various ethnic backgrounds.
This research supports the theory about men being more goal-oriented (Hansen & Jensen, 2009). Men like to shop for the multiple reasons. Firstly, it is very convenient, they do not have to go to an actual store. Secondly, there is a lot of product information available and it is easy to compare product prices. Men like to search for goods online, to minimize the risk of spending more money than necessary. Following, there are some internet discounts available that do not occur in stores. Next, you can read online consumer reviews written by other consumers. Finally some men like to avoid sales people and shop in peace without disturbance. However, the men also experienced a negative impact: impulsive purchase of goods that are not relevant or necessary.
This case also reveals some gender related motivations for online shopping. Since internet serves as a reflection of your identity, men want to reinforce their masculinity. The search for online information gives men the idea of being more knowledgeable. The decision of purchase becomes less risky which enhance their self perception of masculinity. Online shopping gives men also the feeling of being in control, because they can control time better. Further motivations for online shopping are, competition, winning and hunting for bargains.
Analysis
The cases clearly show that female and male online consumers are different from each other and have different motives for online shopping.
Firstly, the different kind of customers: utilitarian or hedonic, discussed in the theory are supported by the examples. It has become clear that there is a distinct difference between utilitarian and hedonic customers and how they should be treated and stimulated. Scarpi (2012) claims that hedonic customers are more profitable. Hansen and Jensen (2009) claim that women are more hedonic-oriented. These theories are supported by the example that women generated more sales while being in the minority. Online retailers who address women should embrace their hedonic nature and make the website more sociable and interpersonal. By creating a more sociable and entertaining environment, women’s attitude for online shopping will increase and thereby increase sales. A couple examples to improve a website and make them more sociable are: chat-rooms, digital dressing rooms, personal advice true online agents and relevant interviews and product information.
Secondly, as Scarpi (2012) says the utilitarian men should not be neglected. These are still profitable. Men mostly like the internet because it is convenient and saves money (Dittmar et al. 2004). The website should therefore be easy and have useful product information available. Men can be positively influenced when they have more fun on the web (Hansen & Jensen, 2009). Retailers should use motivations such as competition, winning and hunting for bargains to increase fun on their websites. When the customers have more fun, the will spend more time online and eventually increase sales.
Conclusion
Online business is a constantly growing market. It is necessary to take a scientific look at the various components involved to help the e-business grow in an effective and efficient way that will help the whole economy. An optimal online marketing strategy is to personalize the shopping environment, the website, to meet the needs and preferences of your specific customer. The new online customers are men and women with utilitarian and hedonic behavior. When women are the target group, companies should focus on increasing awareness of the benefits of online shopping. In this case, companies have to enhance the social and interpersonal experience of female shoppers’. When men are the target group, the website should be goal-oriented. This entails an easy and convenient website. Furthermore, customers should be able to write reviews and compare prices. When there is no specific customer, companies should focus on increasing the amount of hedonic-oriented customers while maintaining the utilitarian customers. This is possible by putting entertaining extra’s on the web without making it irritating for the utilitarian customers.
References
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