The paper "To What Extent Privacy and Security Affect on Consumer Behavior When Shopping Online" is a good example of marketing coursework. Today online shopping is increasing rapidly changing the business environment. With tight schedule and advancement, people have made it a habit to purchase just from where they are provided they can access the internet. As such, the situation has become convenient and less expensive compared to directly buying from the company. Even though online shopping has increased speed of purchase, security and privacy issues are some of the reasons hinder online purchasing.
This paper defines security and privacy based on online shopping and analyses the extent to which privacy and security effect on consumer behavior when shopping online especially technologically. Introduction As the 21st-century rolls on, technology is changing the business environment rapidly while increasing competition among the organization. In fact, it is considered that business that does not adopt technology in this is likely to be driven out of the market. Internet technologies have created in new delivery channels and electronic transactions are growing fast (Nazir, 2012, p. 486).
In fact, the report of 2012 by internet world stats shown that there are 2.3 billion internet surfers in the world (Internet World Stats, 2012). In 2001, the online sales posted revenue of $48.3bn, signifying a yearly rate of growth 45.9 %, (Huang, Schrank& Dubinsky, 2004, p. 40). With the increase of internet usage, the need to satisfy customers has increased; it is not just about the quality of products the organization offers but also the quality of service they provide in regards to privacy and security. Majority of the individuals who use internet technologies to buy products online are still reluctant due to privacy and security.
As such, this essay discusses the extent to which privacy and security affect on consumer behavior during shopping online. The essay will argue that privacy and security issues reduce confidence, influences consumer perception, and reduce trust in e-mails and credit cards. Definition Consumer definition could difficult to define in a single entity but has several dimensions in which it can be described. Tsai et al. (2011, p. 255) described 4 dimensions of customer privacy issues including a collection of individual information, illegal secondary application of private information, errors in individual information, and inappropriate access to someone’ s personal information.
In online shopping, these frameworks of challenges have been understood to refer to sets of individual information, restriction over the utilization of private data, and understanding of practices concerning privacy and how individual information can be used (Tsai et al. (2011, p. 255). On the other hand, security is described as the data protection against intentional or accidental disclosure to any unauthorized individuals, or illegal destruction or modifications (Godwin, 2001, p. 165). Privacy and security issues reduce consumer confidence and willingness during shopping online Customers’ information privacy and security for the online purchase is a crucial concern of decision making for buying.
Majority of Americans think that their right to privacy remains “ under serious threat” , and utter concern with organizations which gather their private data (Tsai et al. 2011, p. 254). Based on surveys, such challenges affect customers’ confidence and willingness to buy online and even to register with websites. Lack of confidence is created by a situation where hackers are able to phish their information while the organization is powerless to help sort the mess.
Organizations tackle these privacy challenges by posting privacy policies (Tsai et al. 2011, p. 254) so as to express the organization information practices. However, 70 percent of individual surveyed differed with the statement which claims that “ privacy policies are simple to comprehend” , and few individuals make efforts to read the privacy policies (Tsai et al. 2011, p. 254). Equally, empirical proof advocates that customers do not completely comprehend the meaning of privacy seal (Tsai et al2011, p. 254). Various researches have also shown that most individuals are keen to put aside privacy problems, offering personal information for small incentives.
A 2005 research carried out by Privacy & American Business, for example, established that problems concerning the utilization of private information had 64 percent of participants from shopping from an organization, while 67 percent of participants refused to register with a website which offers online shopping since they established the privacy guidelines to be complicated or imprecise (Tsai et al. 2011, p. 255). Some of the issues that discourage consumer and changes their attitude towards online shopping are that their personal information is collected or phished by the website of cybercriminals.
The USA Federal Trade Commission report of 1999 (1999a), claims that information is collected online both directly and indirectly (Godwin, 2001, p. 166). When a consumer gets into a chat room talk, he or she places the message on the bulletin board, then registers into that commercial website, orders goods, he or she knowingly and directly sends information into the cyberspace. That report further claims that the data can be collected indirectly without the knowledge of the consumer.
For instance, a consumer’ s surfer around a Website is tracked by a component referred to as a ``cookie’ ’ left on the hard drive of a computer on the consumer’ s first visit of that page. Since the Website collects information or data, directly and indirectly, it can build up a complete information picture of a person and his or her family (Godwin 2001, p. 166). Internet surfers desire to feel their privacy is safeguarded. A privacy professional greatly recommends government intervention, whilst business managers are advocating for self-regulation (Godwin, 2001, p. 166).
Presenting customers with information regarding how their private data are utilized and looking at the possibilities of providing customers privacy preference is amongst the concerns they think must be tackled. According to Godwin (2001, p. 167), The US federal management has been proposing self-regulation policy as opposed to government regulation.
Godwin J.U. (2001). Privacy and security concerns as major barriers for e-commerce: a survey
study. Information Management & Computer Security, 9, 165-174.
Huang,W., Schrank, H & Dubinsky, A.J. (2004). Effect of brand name on consumers’ risk
perception of online shopping. Journal of Consumer Behaviour, 4, 40–50.
Internet world Stats. (2012). Internet Users in the World: Distribution by Region-2012 Q2.
Retrieved 30th pril 2014 from http://www.internetworldstats.com/stats.htm
Nazir, S. (2012). How Online Shopping Is Affecting Consumers Buying Behavior in Pakistan?
IJCSI International Journal of Computer Science Issues, 9, 486-495.
Tsai et al. (2011). The Effect of Online Privacy Information on Purchasing Behavior: An
Experimental Study. Information Systems Research, 22, 254–268.
Yao C.T & Jong, CY. (2010). Perceived risk of information security and privacy in online
shopping: A study of environmentally sustainable products. African Journal of Business
Management, 4, 4057-4066.