CHARACTERISTICS AFFECTING THE ABANDONMENT OF E-COMMERCE SHOPPING CARTS A PILOT STUDY

Transcription

1 CHARACTERISTICS AFFECTING THE ABANDONMENT OF E-COMMERCE SHOPPING CARTS A PILOT STUDY Jason Coppola, Bryant University, (203) , Jason.Coppola@quinnipiac.edu Kenneth J. Sousa, Bryant University, (401) , ksousa@bryant.edu ABSTRACT The number of sales transactions and volume gained through web-enabled systems has steadily increased over the last few years. However, consumers continue to abandon the electronic shopping carts associated with these systems. This research study seeks to explain why electronic consumers abandon electronic shopping carts using categories as a means to distinguish between various reasons associated with behavior. This study surveyed 153 college students using questions associated with website design, security, social/psychological and website features to determine the effect on electronic shopping cart abandonment. The results confirm that there are statistically significant factors that lead to electronic shopping cart abandonment. The study also provides suggestions for website designers to decrease abandonment as well as proposing areas for future research. INTRODUCTION Since 2000, e-commerce sales have been growing at a steady rate (Meeker, Pitz, and Fitzgerald, 2004; shop.org, 2004). As e-commerce sales continue to expand and more people use the Internet as a shopping channel, issues have arisen with the usage and abandonment of electronic shopping carts. Electronic shopping carts can be defined as electronic commerce user-interface for the customer to shop at online stores. Shopping cart abandonment is defined as, a user leaving a website after they have placed items into their cart without purchasing those items. The most successful e-commerce websites convert only 8 percent of their online visitors to paying customers. Most firms are able to convert only 2 to 3 percent (Goldwyn, 2003). Research has shown that two-thirds of online shoppers have filled their electronic shopping cart but exited at the check-out stage without completing a purchase (Gurley, 2000; Rewick, 2000). Even though e-commerce is a thriving industry, these conversion numbers are very poor. This research study attempts to gain insight on why consumers, specifically college students, are willing to place items into their electronic shopping cart, but fail to complete the order. LITERATURE REVIEW Understanding the factors that influence consumers to abandon electronic shopping carts has been the goal of e-commerce research since the late 1990s. Even though there have been studies since the late 1990s, there are very few that focus on shopping cart abandonment. Cho (2006) determined that cart abandonment is more closely related to overall hesitation; not to hesitation associated to payment. The study also found several reasons that college students are overall more likely to hesitate when purchasing a product or service online including race, attitude toward online shopping, qualityconscious, buyer s regret and time pressure.

2 Value-consciousness is the strongest predictor of overall shopping hesitation. The study asserted that college students are more likely to remove product items off their online shopping carts based on several factors including time on the Internet, confusion, negative past experience, price comparison, reliability of website and depth of personal information required to complete online purchase. In addition, comparison shopping is the strongest predictor of shopping cart abandonment (Cho, 2006). Other studies have focused on factors that affect attitudes towards retail websites (Elliot, 2005). This study found that as expectations of online shoppers rise, their satisfaction with online retailers decline. The results of their study assert that five website factors (ease of use, product information, entertainment, trust, and currency) affect consumer attitude towards a retail website. The study also suggested that retail websites should emphasize site factors that best suit the involvement/experience profile of their primary users (Elliot, 2006). Another study focused on creating value for online shoppers (Lee, 2004). This study identified two types of online shopping values: utilitarian value (including price savings, service excellence, time savings, and selection dimensions) and experiential value (including entertainment, visual, escape, and interaction dimensions). The results of the study indicated that Internet shopping does invoke various types of shopping values. It also asserted that both utilitarian and experiential value positively affected customer satisfaction (Lee, 2004). McCloskey (2006) focused on the importance of ease of use, usefulness, and trust to online consumers. This study examined electronic commerce participation by older Americans. This study used and modified the Technology Acceptance Model (TAM) to examine the impact attitudes concerning ease of use, usefulness and trust had on electronic commerce usage. Usefulness and trust were found to have a positive, direct effect on usage. Ease of use had significant impacts on usefulness, while trust had a significant impact on both ease of use and usefulness (McCloskey, 2006). Ha (2004) extended Roger s innovation decision process to study how general innovativeness is related to Internet apparel shopping. Using college students as the survey population, the results asserted that general innovativeness is related to Internet usage for information search, but not actual purchases. The study also found that gender is related to general innovativeness, because female students were more likely to use the Internet for information search for apparel products. A research study by Li (2005) focused on shopping cart abandonment at retail websites and developed a multi-stage model of online shopping behavior. This study applied their model to click-stream data from The study identified three set of factors that affect shopping cart abandonment: (1) consumer s unobserved purchase intent that influences navigation orientation, (2) exposure to hyperlinks, marketing mix and promotional stimuli on web pages while browsing a website that can change navigation orientation at any point during the session, and (3) comparison shopping activity that affects consumer s progress through the shopping process. Lastly, Wolfinbarger (2001) reviewed what types of shoppers are interested in e-tailing. The study found that goal-oriented or utilitarian shoppers, who are described as task-oriented, efficient, rational, and deliberate, desire to purchase what they want quickly and without distraction. This research suggests that goal-oriented shoppers are interested in e-tailing because of four specific attributes: convenience and accessibility; selection; availability of information; and lack of sociality.

3 PROPOSED RESEARCH MODEL This research study proposes a model that includes four factors which affect electronic shopping cart abandonment. Those four factors are: 1) website design, 2) security, 3) social/psychological factors, and 4) website features. The measures for this study were compiled from the proposed research model described above. The literature review provided the basis to identify construct definitions and any prior measures. Seven-point Likert scales were assigned to each construct as outlined. Constructs Website design is how complicated the website is designed, the time required to download necessary product information, and if the site had a fun and entertaining feel. Three questions were designed to understand how electronic shoppers feel towards website design using a strongly disagree to strongly agree scale (Cho, 2006). Security is defined as features that the website has implemented to protect its customers personal information. Four questions developed the security portion of the survey (strongly agreed to strongly disagree scale). These questions helped to understand the extent to which e-shoppers care about the security features of a site before they purchase from that site (Cho, 2006; McCloskey, 2006; Elliott, 2005). Website features are special characteristics that the website has which increases its value against competitors; including shipping charges and return policies. Six questions were used to compile which features of a website entice e-shoppers to remain on a website and complete a purchase using a strongly disagree to strongly agree scale (Cho, 2006; Elliott, 2005; Lee, 2004). Social/psychological factors are characteristics that the consumer personally considers before they purchase a product. These factors are not affected by the website design. Five questions from the survey were developed toward understanding how an e-shopper s social and psychological factors affected whether a purchase was completed using a strongly disagree to strongly agree scale (Cho, 2006; Wolfinbarger, 2001). Abandonment is defined as a user leaving a website after they have placed items into their cart without purchasing those items. Three questions were used to understand how many times the respondents have abandoned electronic shopping carts in the past. These questions also helped to determine whether they abandon their cart to purchase at a later time or completely as well as whether they abandoned all of the items in the cart or only a few of the items (partial order) using a never to always scale (Cho, 2006). The following hypotheses will be utilized to determine the relationship between these factors and shopping cart abandonment. The hypotheses are as follows: Hypothesis Description 1 Website design does not affect shopping cart abandonment. 2 Website security does not affect shopping cart abandonment. 3 Social/Psychological factors do not affect shopping cart abandonment. 4 Website features will have no effect on consumers abandoning shopping carts.

4 Survey Implementation College students were selected as the survey population due to their use of technology, significant use of the Internet and are more likely to abandon products online (Cho, 2006; Ha, 2004). A web-based survey was developed consisting of twenty-six questions categorized into six categories: population, abandonment, website design, security, website features and social/psychological factors. RESULTS The survey was distributed to 1,000 students. A total of 153 responses were received resulting in a 15.3% response rate. There were 60 male responses, 54 female response, and 39 responses that did not identify gender. The results were analyzed using factor analysis which resulted in four significant factors. After completing and analyzing the results of the factor analysis, a linear regression analysis was completed to determine which of the four factors loaded onto the dependant variable (abandonment). The model s four factors explain 60.09% of the total variance. The significant factors were selected based on variables with communalities more than.50 significance (Hair, 1998). The factor analysis was completed using the four factors outlined in the literature review. Each of the survey questions resulted in communalities which are greater than.50 under the rotated factor matrix. The following table summarizes the results of the factor analysis: Factor Construct Question (factor value) IV-1 Website design and security Complicated checkout process (.607) Downloading product information too long (.587) Checkout required too much personal information (.787) Site was unreliable (.785) Lack of confidence in secure credit card transactions processing (.724) Concern for misuse of personal information (.640) IV-2 Website features Site is well-organized and easy to navigate (.701) Useful search engine to find information (.718) Site contained useful graphics of products (.874) Products clearly described (.731) IV-3 Social and psychological Needed additional advice for purchasing decision (.688) Avoiding buyer s remorse (.577) Possibility of an new product introduced after purchase (.673) IV-4 Website functions Website has a difficult return policy (.627) A linear regression analysis was completed to determine which of the four factors loaded heavily onto the combined dependent variable which included four questions. The dependent variable construct was created by averaging the values of the four questions. The dependent variable was then tested against the four factors (IVs). The four factors were created by multiplying each question by their communality score in the rotated factor matrix and then added that result to the next significant question in that factor. The dependent variable constructs were compiled as follows:

5 Factor Construct Question (factor value) DV Abandonment Abandoned the shopping cart delaying the purchasing decision refusing the entire cart purchase items for that time and in the future. This statistical test identified two significant independent variables which load heavily onto the combined dependent variable. The two independent variables were factor 1 and factor 3. The regression model accounted for an R-squared of.127 concluding that 12.7% of the total variance is explained by the independent variables. The significance of factor 1 was.000, which means that it is very highly significant. The significance of factor 1 and factor 3 combine was.011; also highly significant. Factor 3 calculated a standardized beta of.294 while factor 1 and factor 3 combined resulted in a standardized beta of.210 and 239 respectively. The standardized regression coefficient, also known as beta, allows for a direct comparison between coefficients as to their relative explanatory power of the dependent variable. The estimated regression coefficients are used to calculate the predicted values for each observation and to express the expected change in the dependent variable for each unit change in the independent variable(s). After the initial regression using the factors calculated from the combined questions was completed, the individual questions specific to the significant factors were analyzed through a linear regression with the combined dependent variable. The regression identified the questions relating to the website s unreliability and buyer s remorse as significant. The regression model accounted for an R-squared of.145. The significance of the unreliability construct was.000 while the combined unreliability and buyer s remorse was.002; both highly significant. Unreliability calculated a standardized beta of.289; unreliable and buyer s remorse combined resulted with a standardize beta of.302 and.248 respectively. FINDINGS AND CONCLUSIONS Limited research on the rationale relating to shopping cart abandonment has been limited. This research study considered the impact of four constructs (security, website design, website features and social/psychological) on online shopping cart abandonment. The results found that security, website design, website features, and social/psychological factors each affect shopping cart abandonment. When linear regression was used to determine the variance explained by the factors only 12.7% was accounted for. The analysis clearly indicates that two factors, website design/security and social/psychological characteristics, are significant predictors. Website design appears to have a significant effect on the abandonment of online shopping cart. If a website has a simple checkout they are more likely, according to this study, to retain a customer s purchase. Also, if the time to download product image was lengthy, consumers were likely to abandon their shopping cart. Website designers should focus more on these two features when designing a website to increase online shopping purchases. Security features on websites also seem to have a significant effect on the abandonment of online shopping carts. As security features increase, website abandonment decreases. Therefore, increased emphasis on security features should increase customer purchasing behavior.

6 Website designers should also consider consumers social/psychological characteristics. Based on this study, these factors load heavily onto online shopping cart abandonment. Consumers may want to avoid buyer s remorse. Consumers are also concerned that improved products may enter the market soon after purchase and therefore more willing to abandon shopping carts. Lastly, consumers need assistance when completing purchasing decisions. If they are unsure about purchasing a product and can seek assistance while online, they are less likely to abandon their shopping cart. Understanding a potential customer s social/psychological factors can assist designers implementing websites which alleviate customers concerns. This study was also able to identify that a website s reliability and a consumers wanting to avoid regrets has significance with shopping cart abandonment. Meaning as website unreliability increases shopping cart abandonment also increases. Also if a consumer is concerned about avoiding regrets they are more likely to abandon a shopping cart. This study was able to identify three areas that influence online shopping cart abandonment; website design, security and social/psychological characteristics. The results of the research indicate that college students are concerned with the simplicity of a website s checkout, the speed at which the website completes its download, the security of the website and social/psychological concerns. Even though through factor analysis the study was able to find four factors loading onto online shopping cart abandonment, the results could not be strongly supported. The low R-squared does not provide a strong influence, but may provide a foundation to future research by probably expanding the population sample and increasing the response rate. Collaterally, some significance in other website design and website features were found to affect shopping cart abandonment but this study was unable to prove how they affect abandonment. LIMITATIONS AND FUTURE RESEARCH There are a few limitations to this study. First, the sample size was sufficient to complete the statistical tests but the data could be more predictive if the sample size was larger. The research could only identify three factors that influence shopping cart abandonment. Also, the regression R-squared value resulted in a low value (12.7%) of the total variance explained. Future research could be focused on how website design and features can be enhanced to limit the shopping cart abandonment rate. Also, future research should focus on how a website security features can be explicitly displayed and enhanced to ease customers fears about how their personal information will be used. An additional area of future research could focus on how specific social and psychological factors explain shopping cart abandonment. Lastly, future research could attempt to explore the effect of an organization s online shipping and return policies on shopping cart abandonment and any effects on whether these policies were displayed more predominately on their websites. REFERENCES References and tables furnished upon request of author.