Understanding Consumer Behavior in E-commerce: Insights from "The Virtual Consumer" Project

1. The Virtual Consumer Peter Lunt Department of Psychology University College London

2. Research Projects • Economic and Social Research Council UK (award number LI32251035) as part of the ESRC Research Programme The Virtual Society? • European Commission for the ESPRIT project AIMEdia (Project number 26983)

3. E-commerce research agenda • Pre-empirical agenda • the market effects of e-commerce • privacy issues • regulation • diffusion • This agenda ‘writes out’ the study of the consumer • The market is understood in terms of abstract idealisations of consumers • Participation is understood in terms of distributions of technology in the population • Privacy is understood in relation to principles of rights • Regulation is understood in terms of policy tools.

4. Research agenda ctnd • The agenda issues in research questions of the following kind: • Will people be able to take control of information giving in online transactions? • Which data are considered to be sensitive? • Will consumers trust online merchants? • Will concerns about security or lack of regulation de-motivate consumption online?

5. “The Virtual Consumer”: Peter Lunt, UCL The Virtual Consumer Project Focus on public reactions to e-commerce as an emerging phenomenon -- beyond access and evaluation Uses of Public Culture of technology understanding consumption E-commerce

6. “The Virtual Consumer”: Peter Lunt, UCL Project Methods • 16 focus groups (August 1998) • split by social grade and gender • 42 user trials (Spring 1999) • split by household type, computing experience • national survey N= 868 (Summer 1999) • national quota sample

7. “The Virtual Consumer”: Peter Lunt, UCL Focus Group Results • analysed using grounded theory • identification of key concepts, grouping these into categories, writing a narrative of these codings • lay theories of e-commerce • broadly positive view of e-commerce • modern, novel, new technology, inevitable • caution about adoption • costs, mismatch with shopping practice, security, service ‘not ready’ (M&S) • disappointment with websites • boring compared to computer games, product labels/categories • missing experiential aspects of shopping • impulse buying, being there -- with friends/family

8. “The Virtual Consumer”: Peter Lunt, UCL • What was missing from these accounts? • Little concern over privacy issues • privacy collapsed into security, • lack of interest in alternative or information sites • Little awareness of technical/marketing developments • data mining, agent software, personalised marketing • Little explicit discourse of shopping practice • People tend to see shopping online by analogy to existing shopping arrangements

9. “The Virtual Consumer”: Peter Lunt, UCL User Trial Results • shopping structures household activities and obligations -- not just transaction -- how does e-commerce fit in? • when technical developments discussed people tended to think in terms of warehousing data rather than dynamic use of profile and aggregate data through analysis • inappropriate location of computer within the home -- study, child’s room, living room -- not Kitchen • more pressing issues in relation to technology • access, relation to educational use, obsessive computing

10. “The Virtual Consumer”: Peter Lunt, UCL Survey Results • 49% had Internet access • 14% (122) reported having shopped online • Only 3 people reporting regularly (weekly) use of e-commerce over a range of goods • typically use was occasional (75%) and restricted to 4 products or less (76%) • Reasons for caution (% rated as important) • Cost of being online (58%) • delivery payments (49%) • not trusting Web with credit card details (51%) • don’t want to give personal information (50%) • want to examine goods before purchase (60%)

11. “The Virtual Consumer”: Peter Lunt, UCL • Attitudes • men more positive than women • young more positive than old • rich more positive than poor • the more educated the more positive • positive attitudes correlated with general acceptance of new technology and positive views about market effects of e-commerce

12. “The Virtual Consumer”: Peter Lunt, UCL • What discriminates online shoppers from other Internet users? • engagement with new technology • shopping style • non users have preference for local shops, bargain hunting, benign view of markets • intentions • e-shoppers -- CDs, tickets, software • non-e-shoppers -- news services • orientation to e-commerce • less inclined to use agent software • think governments should protect online consumers • concerned with privacy • want human contact when shopping

13. “The Virtual Consumer”: Peter Lunt, UCL • Why are people only occasional online shoppers? • not excited by technical developments • do not believe market will lead companies to look after customers • would miss the fun of real shopping • think online payments insecure • think goods are available locally • are less positive about technical developments (agent software, data mining, personalisation)

14. “The Virtual Consumer”: Peter Lunt, UCL Conclusions • generally positive attitudes are balanced by a range of perceived barriers to e-commerce • there is a preference for the reproduction of existing shopping arrangements online • knowledge gaps in public understanding • e-commerce is boring (lack of issue engagement) • a resistant group of Internet users is discernible • using e-commerce appears to depend more on people’s orientation to consumption than their attitudes towards technology