Strategies for reducing consumers’ risk aversion in Internet shopping

Using experimental design and conjoint analysis, this paper studies the risk perception of Singaporean consumers on Internet shopping, and tests the effectiveness of several risk‐reducing strategies that Internet marketers could use in promoting online shopping among consumers. The results show that Singaporean consumers with a higher degree of risk aversion than others tend to perceive Internet shopping to be a risky activity. However, Internet marketers could rely on using reference group appeal as the most preferred risk relievers for this group of consumers, particularly by getting expert users to endorse the products involved. In addition, the marketer’s reputation, the brand’s image, and specific warranty strategies are also effective risk relievers for the potential Internet shoppers.

[1]  Donald F. Cox,et al.  Perceived Risk and Consumer Decision-Making—The Case of Telephone Shopping , 1964 .

[2]  D. F. Blankertz,et al.  Risk taking and information handling in consumer behavior , 1969 .

[3]  J. F. Engel,et al.  Perceived Risk in Mail-Order and Retail Store Buying , 1970 .

[4]  Ted Roselius Consumer Rankings of Risk Reduction Methods , 1971 .

[5]  J. Jacoby,et al.  The Components of Perceived Risk , 1972 .

[6]  E. Poulton Unwanted range effects from using within-subject experimental designs. , 1973 .

[7]  John E. Shelton People's Republic of China , 1973 .

[8]  J. P. Peter,et al.  A Comparative Analysis of Three Consumer Decision Strategies , 1975 .

[9]  A. Greenwald Within-subjects designs: To use or not to use? , 1976 .

[10]  P. Green,et al.  Conjoint Analysis in Consumer Research: Issues and Outlook , 1978 .

[11]  H. Assael Consumer behavior and marketing action , 1981 .

[12]  Terence A. Shimp,et al.  Warranty and Other Extrinsic Cue Effects on Consumers' Risk Perceptions , 1982 .

[13]  C. Derbaix Perceived risk and risk relievers: An empirical investigation☆ , 1983 .

[14]  Jean C. Darian In-home shopping: Are there consumer segments? , 1987 .

[15]  I. P. Akaah A conjoint investigation of the relative importance of risk relievers in direct marketing , 1988 .

[16]  H. Unnava,et al.  The Usefulness of Product Warranties For Reputable and New Brands , 1991 .

[17]  V. Mitchell,et al.  Understanding Consumers’ Behaviour: Can Perceived Risk Theory Help? , 1992 .

[18]  Gordon C. Bruner,et al.  Marketing Scales Handbook: A Compilation of Multi-Item Measures , 1992 .

[19]  William Boulding,et al.  A consumer-side experimental examination of signaling theory: Do , 1993 .

[20]  Michael A. Belch,et al.  Introduction to Advertising & Promotion: An Integrated Marketing Communications Perspective , 1993 .

[21]  Thomas L. Ainscough,et al.  The Internet for the rest of us: Marketing on the World Wide Web. , 1996 .

[22]  Pallab Paul Marketing on the Internet , 1996 .