2. THE HISTORY AND GROWTH OF THE INTERNET
3.5 A Consumer Behaviour Model for Internet Buying
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According to Hernandez (2002: 255), the Internet is one of the current most intriguing
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research topics and understanding the differencys between online and offline consumers is key for the development of
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increase in the use of the Internet as a shopping place in the last few years, there has been an increasing interest in the investigation of significant behavioural differences between online shoppers and offline shoppers (Koufaris, 2002: 206).These behavioural differences were explained with attempts at building models of online consumer behaviour over the past few years (Koufaris, 2002: 206). Examples included analysis of the conversion of Internet users to Internet shoppers (Berton et ai, 1996), studying consumer information acquisition and purchasing decisions online (Alba and Lynch, 1997) and determining reasons for consumers not shopping online (Peterson and Balasubramanian, 1997). According to Koufaris (2002: 206), these online consumer models
were not generally accepted as they viewed online consumers differently from offline consumers.
Windham and Orton (2000: 81) took these models one step further, as they stated that online and offline consumers were generally the same as they had the same needs with the same amount of money to spend, but as information was so readily available on the Internet, the decision making cycle had become more compressed.
According to Windham and Orton (2000: 81), purchasing on the Internet has three addressable purchase decision phases. The traditional consumer decision-making stages, as discussed in Section 3.4.2, merge into three new phases. The stimulate, consider and search stages merge into one called the confidence building phase. The choose and buy stages merges into the skirmish phase and the buy again stage merges into the war phase. Windham and Orton's new consumer purchase decision cycle is given in Figure 3.5 below.
Figure 3.5: The New Consumer Decision Purchase Model
WAR
Consumer Behaviour:
Buy more
Merchant Goal:
- Customer retention - Identify and constantly
deliver value - Remain competitive
CONFIDENCE BUILDING
Consumer Behaviour:
Learn about alternatives and become sure of action
Merchant Goal:
- Raise awareness - Build credibility - Create trust
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SKIRMISH
Consumer Behaviour:
Purchase for the first time
Merchant Goal:
- Customer acquisition - Close the deal - Deliver the value - Ensure satisfaction
The three phases depicted in Figure 3.5 are briefly outlined below.
• The Confidence Building Phase
The confidence building phase compresses the stimulate, consider and search consumer behaviours (see Section 3.3.4, Figure 3.4) into a quick, nearly simultaneous succession.
According to Windham and Orton (2000: 82), it is often argued that the stimulate stage is still an initial and separate phase relying primarily on traditional mass media to raise awareness.
The danger in that thinking, however, is missing the importance of search engines in creating initial web site awareness.
Also, according to Windham and Orton (2000: 82) consumers become aware of web sites through many different means (e.g. suggestion from friends, search engines and portals, newspaper and magazine articles, and advertisements) and sometimes consumers are
"stimulated", or become aware of web sites through more traditional means such as print or broadcast advertising. Other times, the stimulus occurs simultaneously with searching as consumers discover new web sites through search engines, portals and links.
The reliance on trusted sources is apparent when consumers name their preferred sources of information for learning about new web sites. According to Windham and Orton (2000: 83), the three most important sources cited by respondents are references by friends (100%), magazine and newspaper articles (95%), and search engines and search links (83%). This shows that consumers perceive these sources as credible and are comfortable with references from people and places they trust.
Once a consumer has become aware of a web site, they actively "consider" the site by searching for it, finding it and confirming the validity of the web site's existence. When the consumer hasn't had the benefit of a direct reference from a trusted acquaintance, sometimes that validation is obtained by checking reviews on other web sites, querying people in chat rooms and user groups, or reading articles in the media (Windham and Orton, 2000: 84).
• The Skirmish Phase
The skirmish phase represents the merging of the traditional choose and buy stages of the traditional consumer decision purchase cycle (Windham and Orton, 2000: 93).
Windham and Orton (2000: 93) named this phase the skirmish phase, as they state that in business-to-consumer e-commerce, getting the customer to purchase for the first time was just a preliminary competitive conflict as the battle for on line businesses to retain Internet users purchasing online had only just began. This implies that online businesses had to find ways of retaining online consumers.
It can be gathered from the above, that the impact of correct actions in the confidence building phase will influence an online consumer's decision to purchase much more quickly. Because the Internet marketplace moves so fast, there is little distinction between choosing and buying on the Internet as a purchase can be made with just a few clicks once the choices have been narrowed down.
• The War Phase
According to Windham and Orton (2000: 97), the war phase is an ongomg battle for businesses selling on the Internet as retaining customers is as difficult as acquiring them.
Thus the challenge for businesses selling on the Internet is to retain first time customers purchasing on the Internet.
For example, during the dot corn bubble, businesses selling on the Internet made expensive freebie offers to acquire customers. The theory was that free offers were the first time price of a customer acquisition and that once a customer was acquired, customer retention would be achieved through offering good web experiences and competitive prices (Windham and Orton, 2000: 97).
According to Winham and Orton (2000: 99), the above theory did not materialise as promotional offers were not only successful in getting Internet users to purchase online, it also created customer expectations in that shoppers believed that discount prices, free shipping and incentives were the norm. The net result was that promotional offers moved beyond customer acquisition and became a requirement for maintaining customer loyalty in many market segments.
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