The consumer-perceived risk associated with the intention to purchase online

Abstract

The market share of online purchasing is under two percent of total retail spending, which provides an indication that consumers have been slow to adopt online purchasing. Previous research has shown that consumers perceive risks associated with purchasing online and these perceptions are likely to affect purchase intention. Little research, however, has been done on perceived risk relating specifically to online purchasing, and in particular, risk related to branded and non-branded retailer websites. Research has shown that brand knowledge has a direct effect on a consumer’s intention to purchase from an online retailer and that this relationship between brand knowledge and intent to purchase online is mediated by perceived risk. The purpose of this exploratory study was therefore to investigate the consumer-perceived risks associated with the intention to purchase online. The research problem considered the question whether the perceived risks (financial, performance, physical, time, social and psychological risks) associated with a branded website (Kalahari.net) are different from the perceived risks associated with a non-branded website (Books.com). It was found that four types of perceived risk exist namely, performance, time, social, and personal risk. Of these risks, only performance risk had an influence on a consumer’s purchase intention from a non-branded website whereas performance and personal risk influenced a consumer’s intention to purchase from a branded website. It was also revealed that consumers perceive performance, time, and social risk as not statistically different when purchasing from a non-branded or a branded website. However, personal risk was perceived to be statistically differently for the two websites. In addition, the brand image dimension of brand knowledge had an influence on a consumer’s purchase intention from both the branded and non-branded websites. The brand awareness dimension of brand knowledge did not influence purchase intention at all. For all four risk types on both the branded and nonbranded websites (except social risk on Books.com), at least one and in some cases, both dimensions of brand knowledge influenced the degree of perceived risk associated with purchasing on the particular website. Finally, it was concluded that the more information search a consumer does before purchase of a book on a branded or non-branded website, the higher their perceived risk associated with purchasing from the particular website. A number of recommendations were made. Methods for decreasing the amount of performance risk which consumers perceive when purchasing a book online were firstly suggested. It was further recommended that Kalahari.net investigate the dimensions of their brand such as brand image, brand awareness, and brand trust, to identify the reasons why consumers perceive performance, social and time risk as being not statistically different when purchasing on a branded and a non-branded website. Since consumers did not see a difference between the brand image of the branded and the non-branded websites, it was recommended that the branded website make every effort to investigate their current branding strategy to identify the reasons consumers view the branded website in the same manner as the non-branded website. Furthermore, since both dimensions of brand knowledge influenced the degree of perceived risk associated with purchasing on the particular website to a certain extent, it was recommended that online retailers focus on building familiarity, positive thoughts, feelings, associations, and beliefs concerning the online retailer brand. Finally, it was recommended that the influence of information search online on perceived risk associated with purchasing be further investigated; because this study found that an action that was traditionally initiated as a means for decreasing perceived risk can now be attributed to increased consumer-perceived risk associated with online shopping.

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