Understanding Online Consumer Behavior: Amazon.com Case Study

Understanding Online Consumer Behavior: Amazon.com Case Study

 

Abstract

Consumers are increasingly shopping online. Significant increases in online shopping have also given rise to many new issues for companies. This work seeks to examine how consumer online buying is influenced, and ways in which companies can deal with these issues. This research uses secondary data to examine the case of Amazon, and ways in which the company can reach out to their customers. The results conclude that companies such as Amazon must work to increase the trust level of their customers while facilitating mobile-based sales through continuous improvement. User trust in online portals such as Amazon can be increased by ensuring that all secondary retailers on the platform are monitored and controlled, to increase the trust level of all stakeholders.

1 Introduction
1.1 Background
Online consumer behavior is increasingly an important aspect for companies, as they need to ensure that the consumer’s choices are understood (O’Connor, 2013, Majed et al., 2018). This work seeks to examine the impact of Amazon.com on consumer behavior, and ways in which the consumer can be understood to ensure that the different online buying decisions can be delivered most robustly. Amazon in the UK has over 17-billion-dollar annual sales as of 2019 and has been able to attract 579.5 million visits from users to the platform (Thaichon, 2017, Pandey and Parmar, 2019). The website remains highly attractive for the end users, as it provides value for money as well as the ability to develop and understand the needs of the customers. The low prices and convenience which is offered to the customers by online marketplaces such as Amazon are coupled with the ability of the customers to get the best possible deal (Rittiboonchai et al., 2019, Sharma et al., 2019), leading to a long term competitive advantage for the firm.
1.2 Aims and Objectives
1.2.1 Research Aims
The main aim of this research is to understand the changes in online consumer behavior, concerning online shopping portals such as Amazon. This research will aim to understand the different consumer needs and wants when they shop online, and ways in which online portals such as Amazon can facilitate this process. Online consumer behavior is changing consumer buying patterns, and this needs to be evaluated in detail.

1.2.2 Research Objectives
The following research objectives have been established:
• What are the unique factors influencing online consumer behavior when shopping on Amazon?
• How can Amazon improve the user experience of shopping online?

1.3 Research Question
Based on the initial review of literature the following research question has been established:
• What are the factors influencing online consumer behavior in the case of Amazon?

2 Literature Review
2.1 Customer Expectations in Online Shopping
Research suggests that online consumers behavior is significantly different from traditional brick and mortar shopping (Agustiningsih et al., 2017, Brand et al., 2020). The ability of online consumption allows consumers to track and trace pricing, and compete based on low prices (González et al., 2021, Katta and Patro, 2018). Companies such as Amazon can use economies of scale to reduce pricing and attract the customer. This has meant that consumers are continuously looking for low prices, and the ability to have convenience. The convenience of online shopping has seen a rapid increase in the number of online consumers who are willing to shop online. This has meant that the consumers are looking for new ways of shopping, which can give them the biggest choices (Sharma et al., 2019, Svatosova, 2020). The ability to shop online can be a major element for any consumer, as there is a need to continuously reduce prices (Rittiboonchai et al., 2019, Sharma et al., 2019). Prices are increasingly important for customers, which can lead to the development of the businesses, which is important to continuously develop and improve the buying power of the customer (Pandey and Parmar, 2019, Rittiboonchai et al., 2019).
Customers in the online portals are also looking for information that can help them in decision making. This is central to the needs of individuals, as the ability to reduce prices and get better information is expected by customer (Sharma et al., 2019, Svatosova, 2020). In the case of Amazon customers, the ability to gain information from reviews of other customers is the biggest selling point of the company. The ability to gather information from reviews has been one of the main selling points for companies in the online arena. However, in some cases, there have been cases where the ability of the consumer to trust the online reviews have been impacted (Thaichon, 2017, Zhi-Kang and Ogawa, 2017). This is important to consider, as the management must have the ability to understand the different actions, and this can have a level of trust in the reviews. In this regard, the ability to understand the reviews is also important, as these can help in the decision-making process (Thaichon, 2017, Zhi-Kang and Ogawa, 2017).

2.2 Issues of Trust in Online Environments
The ability of the customers to buy online is based on the ability of the end-user to learn from the reviews and increase their trust. This trust is imperative for customers, as they must have the ability to develop and understand the different ways in which products and services are provided (Rittiboonchai et al., 2019, Sharma et al., 2019). The ability of the consumer to use online facilitation of customers and the ability of the customers to return the products can also be important (Sharma et al., 2019, Svatosova, 2020). This can ensure that the customer has a level of confidence in the shopping that they do on an online platform. The level of trust that a customer has in an online platform is also important as it allows individuals to grow, and to successfully increase the confidence level of individuals (Katta and Patro, 2018, Rittiboonchai et al., 2019). The ability to increase trust in online buying can also be managed by ensuring that the customer can get a refund from either the retailer or the banking institution that they use. This ability to increase trust in an online retailer is paramount for the success of a company. This will also be an important issue for the company, as their online sales will increase if the level of trust can be increased. By having a long-term view of these initiatives, companies will be able to develop and understand the different challenges and increase the level of trust which is present in the online environment.

2.3 Impact of Customer Facilitation in Online Environments
The ability of customer facilitation can also change customer habits. Customers can develop and understand the different types of way in which they respond to changes in selling. Customers are willing to shop more online (Sharma et al., 2019, Svatosova, 2020). Evidence from research suggests that the facility of online shopping can also be important for customers, as they need to facilitate the different kinds of buying behavior which can be impulsive (Svatosova, 2020, Thaichon, 2017). long-term the customer is also central and important for the different stakeholders, as it allows individuals to have a clear understanding of the different situations. The changing customer perspectives are also important as this allows the different stakeholders to understand the various ways in which costs can be reduced. In this respect, customer needs of the convenience of shopping online are the biggest attraction for customers. They must be fractalated to ensure that the use of the online services can be increased, as this would increase the economies of scale (Agustiningsih et al., 2017, Brand et al., 2020).

2.4 Perceived Risks by Consumers
Consumers can perceive several risks for any online shopping portal. One of the main risks is the returns policy which is being followed by an online store. This is especially important to take into account, as the companies must have the ability to develop and understand the consumer need for returning a product. Consumers are continuously evolving, and looking for the possibility of free returns. Sites such as Amazon have been successful as they allow free returns. This is central to how consumers buy, as they know that they will be able to return a product without any questions asked. The cost of the return is also another issue, and companies such as Amazon are successful as they can process the returns and pay for the return postage. This is also important to consider, as the returns process has been highlighted as being of prime importance.
Another major risk that consumers have identified in the literature is the risk of financial fraud. Many online sellers are known to take payments and not send the product to the consumer (Agustiningsih et al., 2017, Brand et al., 2020). This concern is a major problem for most consumers, as they feel that they cannot judge the reliability of a portal. In most cases, customers can have problems dealing with financial fraud, in the form of fake items as well as lack of delivery from a small seller (Zhi-Kang and Ogawa, 2017, González et al., 2021). One of the ways companies have been able to control this aspect is based on their ability to use the large brand name of a portal such as eBay or Amazon to increase the confidence level of consumers. This can have a long last impact on the way services are used by the end customers. This can be used to increase the impact of the brand in the mind of the customer, and increase their level of confidence.

2.5 Impact of Consumer Proficiency in Technology
Another factor which has been seen to impact the consumer proficiency in technology is based on the ability of the consumer proficiency of technology. Studies have shown that those consumers who have a high degree of proficiency in the use and adoption of new technologies have a better ability to understand the different ways in which online shopping works (Zhi-Kang and Ogawa, 2017, González et al., 2021). These consumers are often more techno-savvy and therefore can understand how the payment mechanisms work, and therefore have more trust in the online systems. These users must also be able to understand the different ways in which they can understand the review system, and get the best possible products (Zhi-Kang and Ogawa, 2017, González et al., 2021). Research has shown that many technically savvy users are also able to discern the fake reviews and products which do not conform to standards.
However, one of the biggest problems which have been identified within research is that in most cases, users do not have an understanding of online manipulation by companies. These users can often buy fake products, as they are unable to see the real product, and therefore their confidence level in the online buying environment can often be low (Zhi-Kang and Ogawa, 2017, González et al., 2021). These users have to be taught about the different precautions they precaution must have in delivering the different actions, and therefore develop and understand the different markets (Wu and Gereffi, 2018, Cusumano, 2017). These markets must be developed over time, and lead to the long-term development of the trust mechanisms. This is also important to consider as customers must have a high level of confidence in the way they operate. Companies must also develop a system of trust and ranking, and have a returns policy that can allow the individuals to take back money where they are exploited.

3 Methodology
The use of qualitative methods approaches secondary data collection has been suggested for this research due to several reasons. Secondary data collection is easy to amalgamate, as this allows data from a large number of high-quality sources (Liamputtong and Ezzy, 2005, Taylor and Trujillo, 2001). This is less time consuming and ensures that the researcher can collect in-depth data from a variety of sources. This is also important to consider, as the collection from peer-reviewed articles and other high-quality sources is important for verifiable information to be collected. This will increase the reliability and quality of the research (Saunders et al., 2019).
The use of qualitative data helps the researcher to consider many of the issues that they face in dealing only with quantitative data. In many cases, qualitative data which has been compiled about the companies looks into the in-depth reasoning for the success or failure of a company (Saunders et al., 2019). This can have a lasting impact on the way services are adopted by a company and the concerns that a customer has with the data.
Secondary data in periauricular can be collected from a range of sources. The most reliable are the peer-reviewed articles that have gone scrutiny by the academic community. This is most important as it allows the researchers to collect from a large number of sources, and therefore leads to improvement in the way services are presented. In this regard, the ability of the end-user to develop and understand the different needs of the customers can be developed. Other sources such as online articles and reports can also allow the collection of data about a potential source, and be used along with the academic research. This can help in building a complete picture when answering a research question, and increase the reliability of the results which have been generated (Liamputtong and Ezzy, 2005, Taylor and Trujillo, 2001). Thematic analysis has been conducted by highlighting the main themes which have been discussed as part of this data analysis.

4 Findings and Discussions
Based on the analysis of the data generated from secondary sources, and several results have been generated. These have been generalized, which has allowed the researcher to grenade the different issues which pertain to Amazon.

4.1 Consumer Trust in Amazon is Paramount
Increasingly, the data suggests that the biggest competitive advantage that large portals such as Amazon have in attracting customers within the online arena is the level of trust that they can build. This is highly important, as the consumer confidence in large brands can be highly important, and allow companies to charge a premium (Wu and Gereffi, 2018, Cusumano, 2017). Research suggests that in many instances, the consumers are willing to pay extra when the ‘Fulfilled by Amazon’ stamp is used. This shows that many customers feel that when an order is fulfilled by Amazon, this has an extra value attributed to it. This can allow the customers to have a high level of confidence in the services that they are being provided. In this regards, large companies such as Amazon can use the online services in a way that can ensure and allow the customers to buy with confidence. This can also be important for the end customer, as they feel that they will not be tricked by a small company. The trust level that a company has built can be used to its advantage (DONICI et al., 2012, Heng et al., 2018), allowing the end-user to develop and understand the different functions over time, and lead to a long-term change in the way services are being used. Using the Trust level is also important for the end-user, which can lead to a structured measure of success for the end-users (DONICI et al., 2012, Heng et al., 2018). One of the factors which are important to consider is that the management must have the ability to understand the changes that they are being presented and lead to a continuous change in the way services are being adopted.

4.2 Increase Adoption by Consumer Education
Another factor that has increasingly been highlighted in the literature and data is that consumer adoption is often based on the wider learning that the consumers are undertaking. If the consumers are well versed in the level of technology that they use (Hansen, 2018, Majed et al., 2018), this can have a high degree of confidence in the way services are adopted. This is also important to consider, as the top level of support for the end-users is also important, as it can help these users to understand the risks that they undertake. A high level of confidence in the trust mechanisms which are adopted by a company such as Amazon can also help the company generate the different types of actions (Wu and Gereffi, 2018, Cusumano, 2017).
Another factor that is important for the adoption of any online retailer is that the financial information of any user is taken into account. This is also important to consider, as top management support is needed for the long-term working mechanisms to work. In this regards, top management must have the ability to secure the financial information and use international standards to increase the level of support that they are providing to a particular individual (DONICI et al., 2012, Heng et al., 2018). Another factor that is important to consider is that the ficain security which is provided by companies such as eBay can be highly important for any companies, which can lead to long term change (Rittiboonchai et al., 2019, Khanna and Sampat, 2015). In this regards, top management must have the ability to deliver new changes in the management of the various initiatives. Having a structured approach to financial management can also ensure that the companies can get the best possible returns, as consumers can be these internal guarantees to adopt these online shopping facilities (Hansen, 2018, Majed et al., 2018).

4.3 Importance of Consumer Facilitation and Ease of Use
Another factor that is increasingly important for the consumer is the ease of use of the online portal. These portals need to understand that users do not want to make new accounts (Rittiboonchai et al., 2019, Khanna and Sampat, 2015). In many cases, portals have been using Google and Facebook account connections to ensure that consumers do not have to make a new login for their service. This increases the consumer adoption of the portal, as the ease of use has been reportedly been highlighted as one of the factors which can influence the user uptake. By adopting the different functions which can ease the use of the site, the adoption of the online services can be increased. Another factor that is especially important for the end-user is that they must have the ability to develop and understand the different functions which can be developed in increase use (Hansen, 2018, Majed et al., 2018).
The ability of the end-user to adopt an online services portal such as Amazon from the phone via a mobile app has also been highlighted in the data as being of paramount importance (Smits and Nikdel, 2019, Patil and Sharma). This is important as it allows the end-users to not only adopt the new site but also leads to a systemic creation of the different initiatives (DONICI et al., 2012, Heng et al., 2018). In this regard, the ease of use of the mobile phone app can also be a major factor that can increase the level of adoption for the customers (Al-Marzooqi and Nobanee, 2020, Wang, 2021). The generation of the various initiatives which can be important to consider is also important, as consumers must have the ability to develop and understand the different mobile-based action, and this can be a major factor in the success of the online systems. This facilitataion will increase sales of Amazon, as shown in figure 1 below.

AMAZON QUTAERLY EARNING
FIGURE 1: AMAZON QUTAERLY EARNING

4.4 Improving User Experience of Shopping by Amazon
Amazon can improve the user experience of the shopping which is adopted by the end customers in several ways. One of the problems which are often highlighted by the end-user is that there is a need to have more control over the smaller retailers (Rittiboonchai et al., 2019, Khanna and Sampat, 2015). While the Amazon marketplace is wide and varied, the level of service by the smaller retailers is often not at the level which Amazon provides. One of how this level of service can be improved is by ensuring that the consumers get the same guarantees and money-back initiatives that they get when they are dealing with Amazon (Sharma et al., 2019, Svatosova, 2020). This is paramount for the consumer experience, as they must feel that their money and account details are safe with Amazon. This must be considered for the long-term initiative, and lead to a system that can bring similarity for all the stakeholders.
Another way of improving the user experience on Amazon is to ensure that the abuse system is not exploited. This is especially important, as the customers must have the ability to develop and understand the importance of review, which can be trusted (Al-Marzooqi and Nobanee, 2020, Wang, 2021). Many smaller sellers can exploit the review system, as they use fake purchases to give positive reviews (DONICI et al., 2012, Heng et al., 2018). These must be vetted out by a team of experts. The review system is the backbone of online purchasing, and therefore any exploitation of this system must never be allowed by Amazon (Johansson, 2021, Collis et al., 2018). Ensuring that consumer confidence in the online review system is increased can be a major factor in the long-term success of Amazon. Companies must be able to increase the level of trust that the end-user has, which can lead to a sustainable competitive advantage for companies such as Amazon (DONICI et al., 2012, Heng et al., 2018).

5 Conclusions and Recommendations
5.1 Main Conclusions
Several conclusions can be drawn from this research. The online reexperiences that customers have with Amazon can be improved by ensuring that the end-user is getting complete information and support from Amazon. One of the key factors which are degrading the user experience is the use of the Amazon marketplace. The secondary retailers often do not provide the same level of trust and services which Amazon is providing to the consumer. Amazon must have a system put in place, where all the retailers can produce a similar system of high-quality service, which can allow the end-users to have trust in the system. By having a similar system of trust, the end-user must develop and understand the challenges that they face in dealing with innovations, and lead to changes in the way services are adopted by the end-user.
Improving the end-user experience is also based on the ease of use of the mobile app which has been adopted by Amazon. These services can be continuously improved over time, and lead to a continuous change system. The end consumer must continuously understand the problems which are faced by Amazon, and increase the trust. Another conclusion from this research is that the level of trust that consumer has in online shopping should be increased. This can be undertaken through a system of continuous change, and ensure that the end-user can understand the returns and exchange program. This program must be more generous than the brick-and-mortar system, as consumers cannot physically see the products which they see. A consistent approach to the product description by all the retailers presents on the Amazon system is also needed as this can also ensure that the customer confidence in the system is improved.
Amazon must also have a structured process of vetting for the small retailers which provide services on Amazon. This will ensure consistency in the level of services that are used by the customers. Customer satisfaction can only be improved if Amazon can develop and understand a system that can help them adopt the different types of services without any risks. Risk reduction in the mind of the customer must be undertaken which can allow the user to understand the challenges that they face, and lead to long term improvement in the output. Output by the users must also be considered when dealing with rogue traders, as customer satisfaction should have paramount importance for the customers.

5.2 Further Recommendations
Several main recommendations can also be drawn from this research. Companies working in the online arena must have the ability to understand the different types of recommendations which can be considered in improving the level of services that are generated. Companies must continuously evolve their online services, and use the data generated to engage the customers. Continuous learning and support for customers must be enabled over time, which can increase the level of support for customers. Often customers which are not tech-savvy will not adopt technology with ease. This can be a major issue in the development of the business potential, and lead to a long term, improvement in the adoption of the customer. By having an education and support system, companies will be able to adopt the different types of technologies with ease and increase consumer trust in the support they are provided. Another recommendation for online companies is that they must have a no questions asked return policy, which provides free return postage for the customer, to ensure that the trust in the online environment can keep on improving for the end-user. This can have a long-term positive impact on the end-user, leading to a proper system for the management of the expectations of the end-user.

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