Within this chapter, industry case studies are provided as illustrative examples of con-
sumer and retailer behaviour in the online trading environment. Additionally, academic
articles are introduced to support underlying theoretical issues and concepts.Levels of consumer demand for online shopping and services might ultimately deter-
mine the size of e-retail markets and when or if a market saturation point will be
reached. Currently, influences such as, whether the consumer has access to the Internet,
levels of competency in use of the technology and the perceived benefits of Internet
shopping are key factors likely to impact on the success and development of e-retailing
(Ballantine, 2005). Internet retailing, or e-retailing as it will be referred to for the rest of
this chapter, offers the consumer an experience that is very different from shopping in
the high street, for example comparison shoppingis much easier and quicker online than
in the physical world (Cude and Morganosky, 2000). An example of a business that facil-
itates comparison of product and prices is Kelkoo.co.uk. Indeed, in the USA, consumers
use the Internet to find information about a product in the early part of the buying deci-
sion-making process as well as buying directly on the web. They are purchasing through
the fixed-location store or ordering by telephone or fax less than they used to (see Mini
Case Study 10.5, The offline impact of online marketing). Other notable differences
between on- and offline shopping are: dynamic pricing, which is often linked directly to
demand, interactive promotionsand web-stores, which are always open.
As a result of the characteristics of the virtual shopping environment, the online con-
sumer experience can become an elective and very goal-orientated activity whereby
online consumers go to the Internet to seek particular information about the products
and services they wish to buy. Perea et al. (2004) highlight that whilst increasingly con-
sumers are shopping online it is not clear what drives them to shop in this way. They
suggest there are various factors including ease of use, enjoyment and consumer traits,
that will determine whether an individual will be an avid Internet shopper. So who are
the customers who shop online?Who are the online customers?
Many researchers have written about which sectors of society use the Internet. Hoffman
and Novak (1998) focused on the impact of demographics, and highlight inequities of
Internet access based on race and gender. Sorce et al. (2005) looked at age and found
that ‘while older shoppers search for significantly fewer products than their younger
counterparts they actually purchase as much as the younger consumer’. More specifi-
cally, The National Statistics Office (UK) (2005) identified that people aged 25–44 were
most likely to buy online (63%), while people aged 65 and over were least likely to buy
online (41%). Mori (2005), the market research agency specialising in reporting on
public opinion has maintained a consistent interest in the technology sector. Mori
(2005) have been watching technology usage in general and, in particular, who is using
the Internet. This data highlights important trends that can help a retailer to develop a
deeper understanding of which technologies consumers might use to access the
e-retailer’s online offer (see Chapter 2 for further discussion).
Another variable to consider when identifying the online consumers is wheredo indi-
viduals access the Internet both in terms of the nature of the point of access and
geographical location.Online customers
Online customers
Dynamic pricing
Prices can be updated
in real time according
to the type of customer
or current market
conditions.