The Disadvantages of Online Shopping for Consumers, Essay Example

Since the creation of the internet, e-commerce has become one of the largest buying networks in the world. There is so much convenience with shopping online that many do not think about the mere disadvantages of it. These consumers are more concerned with being able to shop from their own home, save time, and do things on the computer rather than go out and spend the time shopping for the things that they want or need. Customers like the ease of access that the Internet has to offer while shopping online. They also like fact that it is normally not a hassle and they do not have to shop around other people or deal with clerks inside stores. Unfortunately, these short cuts may come with some serious problems in the end. E-commerce is not as safe as many say and it can cause many more unexpected problems for the consumer. There are many disadvantages of online shopping which include identity theft, credit card information security, general costs as well as shipping costs, less inspection capability, difficulty of returns, and the consumer’s time.

Two of the major disadvantages of shopping online for consumers are that of identity theft and credit card information security. According to Jeff Fischer (2001, pp. 66-69), “many potential shoppers continue to express credit card security concerns.” (p.69). This is not surprising as too many companies do not spend the time protecting their customer’s identity and credit card information. Too many companies do not protect their buyer’s information enough. These are important factors as they deal with the security of the consumer on the internet. Unfortunately, this could go very wrong and people can begin to use this information for purposes other than what it was intended for in the first place. There are too many hackers, too many computer savvy individuals who are just phishing for information in order to steal someone else’s identity and use it for their own benefit. Online businesses need to combat this by not requiring so much information from their customers in order for them to make a purchase on their websites. These companies need to be responsible for the customer’s information and how it is used. If they do not have to accept responsibility, most companies won’t and this can not only be detrimental to their company, but to their customers as well. Credit card information security is just as important. Many customers are required to use a credit or debit card in order to pay for their purchases online and this can create a slew of problems for the customer and the company if not protected. In this particular case, it is important for the consumer and the company to be smart about credit card information. This is not just up to the customer; however, it is of utmost importance for the company to keep the customer’s credit card information safe. Plain and simple, just be honest. Combatting identity theft and unauthorized use of credit card information can be done if more companies take the time to protect the consumer from fraudulent activity. According to Communications of the ACM (1999, pp. 80-85), “unlike traditional retail environments in the physical world, where consumers feel they have only limited choices, such perceptions concerning information privacy on the Internet have a striking negative influence on consumer willingness to engage in relationship exchanges online” (p.80). This is not surprising as many customers do not trust working with online companies for fear of being scammed out of the personal information. Communications of the ACM (1999, pp. 80-85) states:

Our research reveals that this lack of trust arises from the fact that cyber consumers feel they lack control over the access that Web merchants have to their personal information during the online navigation process. These concerns over privacy span the dimensions of environmental control and secondary use of information control. Environmental control, or the consumer’s ability to control the actions of a Web vendor, directly affects consumer perception of the security of online shopping. In the physical world, a consumer may be concerned about giving out credit card information over the telephone to an unknown voice within a mail-order company. On the Web, consumers may fear typing in credit card information to any commercial Web provider. Similarly, a commercial Web provider may fear the efforts of a hacker intent on stealing credit card numbers (80).

In addition, Communications of the ACM (1999, pp. 80-85) states:

Control over secondary use of information reflects consumers’ perceived ability to control the use of their personal information for other purposes subsequent to the transaction during which the information is collected. On the Web, this lack of trust is manifested in consumers’ concern that Web providers will sell their personal information to third parties to engage in relationship exchanges online (80).

Through this evidence, it is easy to see why consumers are so leery of using their credit cards online and providing their personal information online. Online retailers need to understand that this is a very big concern for consumers and should continuously be trying to find ways in which to protect their customers from any type of fraudulent activity. This will help their business and rapport with customers around the world.

Other disadvantages of shopping online for consumers are that of general costs to the consumer as well as shipping costs. General costs to the consumer are due to the company’s expenses for advertising, marketing, and other financial matters. Small online companies have to spend extra money for advertising and other forms of marketing to keep up with larger companies. In turn, this causes the customers to have to pay more for certain things. According to Jeandrain (2001, pp. 2-9), “to have online success, retailers have to find a sustainable competitive advantage, a differential value from competitors’ sites, and a realistic virtual retail site” (p.7). In order to change this, many companies need to limit their advertising as much as possible to cut costs for the customers. It should be understood that the customers are what are loyal, not the advertising. Finally, it is important to understand that customer relations problems are a big deal for online shoppers. Online companies want satisfied customers as satisfied customers are loyal customers. These companies really need to realize that, in order for a company to survive, it must have loyal customers. If the company’s customer relation skills are not intact, it could lose customers and could possibly go bankrupt. Sometimes it is difficult to keep loyal customers as the virtual world is changing; however, it is less difficult if the company is honest and able to provide excellent customer service. In addition, shipping costs can be very high, so many companies such as Wal-Mart, are now allowing customers to shop online and pick up their merchandise in the store when they are available to do so. Stephanie Clifford of The New York Times (2012, p.1) states,

Ms. Sheffer, an information technology specialist in Bunker Hill, W. Va. Shops for items like clothes, electronics and even coffee online. But she also likes to receive her purchases as soon as possible. When buying shelving from the Container Store, she ordered it on the Web in the morning and picked it up during her 30-minute lunch break that day. And there were no expensive shipping fees.

This is exactly what companies need to do in order to overcome the problems of shipping costs and other general costs that may affect the consumers.

Finally, less inspection capability, difficulty of returns and time are major disadvantages of online shopping for consumers. Online shopping does not allow for the customer to inspect the items in which they are looking to buy. They are only able to distinguish the excellence of the product by a picture and description. In all reality, this does not help consumers make sound choices on what they are buying and from where. Anne-Cecile Jeandrain (2001, pp.2-9) cites Weitz (2000, p.221):

The critical issue determining what types of merchandise can be sold successfully by electronic retailers is the degree to which the electronic retailers can provide enough information prior to the purchase to make sure consumers will be satisfied with the merchandise once they get it (p.7).

It is important for companies to give a full description of the product in order for customers to know exactly what they are buying. A picture and brief description just do not do the product as much justice as would seeing the product in a retail store. Difficulty of returns is also a disadvantage of online shopping. Consumers like to know what they are buying so that they can alleviate the process of having to return an item. However, many do not get the chance to do this; therefore, returning the product becomes a hassle for the consumer and the company. Jeandrain (2001, pp. 2-9) states that there are two types of consumers: utilitarian and experientials. These groups are different in deciding what they want and what is important in regards to information pertaining to their buying decisions so that they can eliminate the return process. Jeandrain (2001, pp.2-9) also states:

For the “utilitarian” group, information quality and quantity about product and service are very important. They are more cognitive than affective. The experientials go into a store for distraction, novelty discovering, and then for buying. Therefore, the store must be “convivial” but also efficient… nonetheless, a compromise has to be found in the aestheticism degree of the immersive virtual world (p.7).

This is interesting information as it shows that consumers are different and they have different needs when deciding which products to buy and why they want to buy them. Companies need to realize that consumers are different and need to tailor their websites to the needs and desires of the customer. This helps in alleviating the number of returns and dissatisfaction of the customer. Time is a big disadvantage of online shopping. Customers purchase their products online and then have to wait days, sometimes weeks, to receive their products. Many people do not like to wait for something they have already paid for and they would rather be able to have it right away. According to Reuven Levary and Richard G. Mathieu (2000, pp. 6-15), “A well-designed Web site provides the customer greater ease and speed of access, shopping, and buying than physical stores do” (p.6). However, this does not help the customer when the customer wants the product that they have just bought right away. Many stores are trying to alleviate this disadvantage by encouraging their customers to buy online and then pick up in the store. According to Clifford (2012, p.2), “another advantage traditional retailers hold over their online-only counterparts is same-day delivery and returns.” This is very important to discuss as time is of the essence for many individuals today. “Sears, which has long offered store pickup for items bought on the Web, added a drive-through service a few months ago that allows customers to return or exchange purchases without leaving their cars” (Clifford, 2012, p.2). This is extremely important to the ease of returns and the value of time for a company’s customers. Companies, both online and in-store, should be willing to help customers in every way possible these days. The economy is not the greatest and consumers spend their money in different ways. If these retailers want consumer business, they must learn to coordinate with the consumer, help them even more with returns or exchanges, give them the big picture about the product they are buying online and be honest about their products. This is the easiest way to overcome obstacles in relation to online shopping.

In conclusion, there are many disadvantages of online shopping. These include shipping costs, time, less inspection capability, difficulty of returns, identity theft, credit card information security, general costs, and many other disadvantages. However, all of the obstacles that online companies deal with in relation to these disadvantages can be overcome. These companies have to be able to provide excellent customer service, learn how to reach out to their customers, gain knowledge on how to keep their personal information safe and do so, and give the customer what they want and need. “The customer is always right” has been a saying, a motto in a sort of way, for many years in the retail industry. This should not change just because the company decides to go virtual with their products and services. Protecting a customer’s personal information is of utmost importance when doing business online as many customers are skeptical about providing this information in the first place. Many of the disadvantages listed in this paper can be overcome and can be combatted by using special techniques and providing excellent customer service to the customers that the company is serving every day. One of the biggest things for virtual companies is that they have to be able to acquire loyal customers that are willing to come back time and time again and purchase products from them. With optimized security measures and excellent customer service, this can be accomplished. The company just has to be willing to take the extra time to treat their online customers as if they were in-store customers.

References

Clifford, S (2012) “Luring online shoppers offline”, The New York Times, 4 July, pp. 1-2. Infotrac Full Text Newspaper Database[Online]. Available at: http://www.nytimes.com/2012/07/05/business/retailers-lure-online-shoppers-offline.html (Accessed: 16 August 2012).

Communication of the ACM (1999) “Building consumer trust online”, Academic OneFile, 42(4), pp.80-85. Academic OneFile[Online]. Available at: http://edb.pbclibrary.org:2077/ps/i.do?id=GALE%7CA54851759&v=2.1&u=d0_mlpbcls&it=r&p=AONE&sw=w (Accessed: 16 August 2012).

Fischer, J. (2001) “Clicks for Bricks”, Newsweek, 137(7), pp. 66-69. Academic Search Complete[Online] Available at: http://web.ebscohost.com.proxy.ohiolink.edu:9099/ehost/delivery?sid=6a19ec61-0233-4b8 (Accessed: 16 August 2012).

Jeandrain, A.C. (2001) “Consumer reactions in a realistic virtual shop: Influence on buying style”, Journal of Interactive Advertising, 2(1), pp. 2-9. JSTOR [Online]. Available at: http://www.jstor.org (Accessed: 9 August 2012).

Levary, R, and Mathieu, R. (2000) “Hybrid retail: Integrating e-commerce and physical stores”, Industrial Management, 42(5), pp. 6-15. Academic OneFile[Online]. Available at: http://edb.pbclibrary.org:2077/ps/i.do?id=GALE%7CA68025759&v=2.1&u=d0_mlpbcls&it=r&p=AONE&sw=w (Accessed: 16 August 2012).