Investigating effect of consumers' perceived risk on purchase intention in Internet shopping

Iksuk Kim, Purdue University

Abstract

The growth of Internet marketing has encouraged marketing researchers to look at how traditional consumer behavior theories and models are applied in the Internet context. This research examined how perceived risk explains the nature and scope of Internet shopping. The purpose of this study was to investigate the nature and scope of consumers' perceived risk in Internet purchasing. This research examined the manner in which perceived risk infuses the buying decision Internet purchasing. This study also examined the risk-reduction strategies that may help marketers deal with the perceived risk involved in purchasing from the Internet. Overall, perceived risk was based on two components and multiple sub-risk facets. Hypotheses dealt with: (1) consumers' perceived purchasing risk in the Internet; (2) relationship with consumers' perceived purchasing risk, positive online shopping experience, and future online shopping intention; (3) consumers' risk-reduction strategy preference in the Internet. The hypotheses were tested using data collected from a nationwide survey of those who used the Internet within the last 12 months. Among the 5,000 mailed questionnaires, a total of 136 incomplete questionnaires and a total of 446 completed questionnaires were returned, yielding a response rate of 9.2 percent. Using paired-samples t test, correlation analysis, χ 2 test, and regression analysis, consumers' perceived risk differences were found between the Internet and store formats. Consumers perceived more purchasing risk from the Internet and preferred non-personal risk-reduction strategies for their purchasing in the Internet. A more positive online shopping experience led consumers' less perceived purchasing risk level in the Internet. A higher perceived risk led to less future purchasing intention from the Internet. This study supported the generalization that the relationship between risk and purchase that has been found in catalog and in-store retailing also holds to Internet retailing. This suggests that what we know about risk and consumer behavior might illuminate other areas in Internet consumer behavior. Decreasing consumers' purchasing risk level is an important way for the Internet to become a successful marketing channel.

Degree

Ph.D.

Advisors

Feinberg, Purdue University.

Subject Area

Marketing

COinS