The factors that influence online consumer behavior are demographic factors, social factors, consumer online shopping experience, knowledge of using internet and computer, website design, social media, situational factors, facilitating conditions, product characteristics, sales promotional scheme, payment option, delivery of goods and after sales services play an import role in online shopping (Pandey et al., 2019).
Also, switching cost, marketing content, digital device types, online advertising types and channels, hedonism and utilitarianism are factors that affect on the intention to purchase of consumers (Kumar, R., 2022 and Angell, A., 2020).
2.2.1. Demographic Factors
Demographic factors include variables such as race, age, income, marital status, and educational achievement, among others (Igiglobal.com., 2022).
Demographic factors have a significant influence on buying behavior (Bhattacharjee et al., 2019).
Pascual-Miguel et al., (2015) found that women perceive shopping online to have higher risk than men and Bhattacharjee et al., (2019) found that younger shoppers spend more on lifestyle, fun and fashion goods, while the elderly shoppers spend mostly on health-related goods.
However, a study conducted by Chahal (2015) revealed that the perception of online shoppers is independent of their age and gender but not independent of their education and income.
24
Nevertheless, demographic factors not only influences buying behavior but also help the online businesses to categorize their products or services more efficiently as well as to develop effective marketing strategies and market segmentation (Bhattacharjee & Chetty, 2019).
2.2.2 Social Factors
Social influence often occurs because people believe that others have a more in-depth knowledge about, for instance, a brand or a product. This information is used to help them to make an informative purchase decision based on other people's knowledge (ask Roberto for reference, his copy).
The main sources of social influence are from reference groups (social groups, work groups, family, or close friends), opinion leaders and aspirational reference groups that consumers admire given their popularity and notoriety (ask Roberto for reference, his copy).
Cetină et al (2012) argued that the online consumer behavior is mostly influenced by WOM (Word-of-mouth) in the virtual groups they belong to and positive electronic word-of-mouth (eWOM) reinforces consumers’ belief and attitude towards vendors in the aspect of trust (Cheung, 2009). Tokinomo.com (2022) echoed that eWOM will help to increase brand awareness, gives positive impact on trust and loyalty, connecting with shoppers and increase sales.
In the online consumer decision model, consumers are influenced by eWOM.
When evaluating alternatives, consumers tend to read online reviews, compare products & services online and eventually search for the company or brand that best fit their expectation (Torreno, 2018).
25
Figure 2.5: Online consumer decision model (Source:
www.marketingtutor.net)
In McEahern (2014) Online Shopper Hierarchy of Needs model which was adapted from Maslow’s 5 tiers of hierarchy of needs model remarked that to meet the safety needs, the consumers not only look for secure checkouts, product reviews, credible look and trust the site enough to make a purchase as well as looking for belongingness to meet their connectedness needs, in terms of fulfilling their social needs, such as friendship, family and romantic relationships and the information provided by these social contacts influence their purchase decision.
Figure 2.6: Online Shopper Hierarchy of Needs. (Source: McEachern, 2014)
There are various forms of electronic word-of-mouth marketing and they are social shout-outs, generated user contents, recommendations, reviews, press mentions, employee advocacy, brand ambassadors or influencers; Electronic word- of-mouth marketing could be encouraged by providing great products and customer service, offering an amazing shopping experience; curate and share user-generated content and use incentive to boost referrals (Tokinomo.com, 2022).
2.2.3. Consumer Online Shopping Experience
Shopping experience is everything that involves the interactions and sensations that the consumer had in his purchase journey with a company. It starts long before the purchase itself and extends beyond that moment (Schiavini, 2022).
The concept of shopping experience is not new and not limited to digital environment. Customers no longer base their loyalty on price or product but on their
26
experience, which makes the brand different and shopping experience is important to create customer loyalty, generate brand awareness and win over customers and their recommendations (Dourado, 2020)
Gullick (2022) stated on that to enhance the customer experience, ecommerce businesses should provide easy to Navigate Website; a fast website; easy payment options; great customer service and personalised options.
Schiff (2015) added some ways to ensure that the online shopping experience is a pleasant one, they include making sure that site loads quickly, whether on a computer or a mobile device; Focus on navigation – and don’t forget about site search; remember that a good photo can be worth a thousand words; less is often more when it comes to content; include customer reviews; use color psychology; let customers know if an item is in stock, or what the backorder date is, right on the product page; make it easy for customers to contact you, get a quote or sign up for email; offer live chat; Provide a self-service option or FAQ page; Make checking out simple – and allow shoppers to save their carts and offering free shipping.
Schiavini (2022) also suggested some ways to improve online shopping experience, they are know your customer; always be transparent; offer a variety of options; make resources available to get to know the product; share knowledge and information; recommend relevant items; customize the shopping experience; bet on cause marketing and take care of after-sales.
2.2.4. Knowledge of Using Internet and Computer
With the evolution of technologies, such as email, social media, mobile phone, a more interactive environment and content creation by users was enable.
The first iPhone landed on our doorsteps in 2007, and ever since then the internet has been far more accessible. Smartphones give consumers quick and easy access to technology no matter where they are (Springfair.com, 2019).
The number of smartphone users was more than 1 billion in 2012 and it has been forecasted that it will be more than three times in 2021 (Statista, 2021). Mobile commerce sales rose from £25.5 billion in 2017 to £29 billion in 2018 so there’s no sign of it slowing down (Springfair.com, 2019).
27
Figure 2.7: Number of smartphone users worldwide from 2012 to 2021 (in billions) (Source: Statista, 2021)
The use of social media worldwide between 2019 and 2024 in which the social media users accounted for almost 3 billion in 2019 and it is predicted to growth in the forthcoming years where more than 80% of users are active on social media (Insider Intelligence. 2021)
The earlier adopters of innovations are usually the younger adults and there are notable differences in tech use between U.S adults under 30 and those 65 and older (Faverio, 2022). Similarly, older people are less active in Vietnam in using the internet than younger people but Vietnam is ranked sixth in the Asia Pacific region and third in the ASEAN after Indonesia and the Philippines for the number of Internet users (Nguyen, 2022) with 72.10 million internet users; 76.95 million social media users; 70.40 million Facebook users; 62.50 million YouTube users; 11.65 million Instagram users; 39.91 million TikTok users aged 18 and above; 54.00 million Facebook Messenger users and 4.20 million members, all in January 2022 (Kempt, 2022).
To excel, the Vietnamese government has developed the Vietnam’s National Digital Transformation Program with a vision for 2030 improve citizen’s digital literacy and skills to form a digital culture and society with the motto “no one will be left behind” (Nguyen, 2022).
Nowadays given the variety of instruments accessible of Digital Marketing, marketers use multichannel strategy to market their products and brands in the virtual
28
space. Various digital marketing activities with the greatest commercial impact in 2017. It is notable that the Content Marketing Communities and the Big Data management is having the highest commercial impact on the business of the company followed by Marketing Automation, Mobile Marketing and Social Media (Bala and Verma, 2018).
2.2.5. Utilitarianism & Hedonism
Consumer behavior is a result of attitudes, motives and values and may evidence into purchase and consumption behavior. Literature reviews on consumer behavior suggest that consumer purchase goods and services and perform consumption behavior because of the two basic reasons (Teller et al., 2008; Millan, Howard, 2007; Batra, Ahtola, 1990; Holbrook, Hirschman, 1982; Millar, Tesser, 1986): hedonic gratification (from sensory attributes); utilitarian reasons concerned (from functional and nonsensory attributes).
Hedonic value is associated with satisfaction of the senses enlarged by experiences of pleasure, entertainment, fantasy and fun (Holbrook, Hirschman, 1982;
Babin et al., 1994). Utilitarian value can be characterized as task-related needs fulfillment. Constructs like monetary savings and convenience contribute to utilitarian value, as hedonic value can be described by using entertainment and exploration constructs (Chandon et al., 2000; Turley, Milliman, 2000; Rintamaki et al., 2006).
Monetary savings mitigate the pain of paying (Chandon et al., 2000). Convenience can be defined as a ratio of inputs to outputs, time and effort being the relevant inputs (Seiders et al., 2000; Rintamaki et al., 2006).
Wirtz (2003) divides products into functional products and hedonistic products, and customer satisfaction will be affected if the performance level of functional attributes and hedonistic attributes of a product is not consistent with customer expectation level. Cvejic et al. (2012) also confirmed the influence of product-related attributes on the formation of consumer attitudes. Yang Jie et al. (2011) proved through empirical research that consumers’ evaluation of product attributes will affect brand attitudes and purchase intentions.
Consumers inevitably consider the utilitarian and hedonistic attributes of products/ services at the same time when evaluating products. The utilitarian attribute
29
of the product provides a rational explanation for consumers’ purchasing behavior.
The hedonistic property of a product can attract consumers, induce buying behavior, and bring positive emotional reaction to consumers. These two attributes of the product will have a direct impact on consumer satisfaction. Consumers are not completely rational people. If the products only pay attention to utilitarian attributes and the consumption lacks emotional experience, consumer satisfaction will be affected. If a product only focuses on the hedonistic attribute, even if some factors effectively induce consumers to buy the product, consumers will still have a feeling of guilt for buying the unpractical product, which will also affect the satisfaction level of consumers. In addition, due to the upgrading of consumers’ consumption preferences, researchers have found that starting from the utilitarian attributes of products to seek the differentiation of technology and quality, comfort and cost performance can only achieve half the result with effort double effort, and the key to improve satisfaction lies in the hedonistic attribute (Zhao, 2019).
2.2.6. Switching Costs
Switching costs are costs a consumer must pay because of changing a service, product or supplier (Sinha, 2022). Switching costs are important as it impacts purchasing choices of customers such as repeating purchasing from the same company or making a purchase from a competitor if switching costs are high or low (Indeed.com, 2021). The three categories of switching costs are:
Financial switching costs, whereby consumers would determine if the switch is worth the costs by performing a cost-benefit analysis.
Procedural switching costs which is the cost for evaluating potential alternative offerings, set-up costs, learning and training fees.
Relational Switching Costs which include the losses from ending the long-term business relationships resulting to the loss of loyalty perks and incentives for long term customers (wallstreetprep.com, 2022).
30
Figure 2.8: Switching Costs (Source: Wall Street Prep.com (2022) According to Grant (2020), switching costs can also be monetary, psychological, effort-based, and time-based.
Switching costs do not only affect market shares of existing SMEs but also the new entrants as it deters new entrants from entering the market, which makes new entrants difficult to obtain market share (Wallstreetprep.cm, 2022).
Figure 2.9: Porter’s Five Forces (Source: visual-paradigm.com (2022) However, SMEs could seek a favorable position by building brand value on the web for their consumers (Smith, 2022), likewise for the new entrants who are facing strong and durable barriers to entry (Mindtools.com, 2022).
Smith (2022) highlighted some ways of building brand value on the web for SMEs and they are telling your story; ask for reviews; build an email list; community outreach; create valuable content; invest in social media advertising; engage on social media; focus on customer service, embrace video and use live videos.
31 2.2.7. Marketing content types
To attract viewers' attention and make them potential and loyal customers, businesses must have marketing tactics. One of the effective marketing tactics in the overall marketing strategy of the business is content marketing.
According to Bunn (2019), content marketing is a marketing technique based on creating and publishing relevant, valuable content to attract and gain the response of target customers in order to achieve profitable actions from customers with the purpose of attracting and retaining users, thereby promoting purchase intent and converting them into customers. There are many ways to convey marketing content, but there are 6 main forms of content marketing that are applied by the majority of marketing professionals to their brands: Blogs, Ebooks, videos, Infographic (conveying all information through images with charts, icons, figures), email, social media channels such as Facebook, Youtube, Twitter, LinkedIn, ...
Content marketing doesn't just stop at attracting potential customers to product introduction content category, stopping to consult a business's Fanpage and deciding to buy, but also a way to maintain, pull, entice customers to return to buy the company's products. According to marketing experts, the role of Content Marketing in promoting products and building brands for businesses is very important. Arturas Kaklauskas et al (2018) argued that an attractive promotional content marketing must be short messages, with content worth watching. According to Adam Khoo (2014), a good content marketing can create a "hit" for a brand or brand of a business. The success of a content marketing promotion is an effective combination of content, color, sound, celebrity and movement. For content marketing to be successfully promoted, it is necessary to tell the story of the consumer. The best way to connect with your customers is to make them part of your content marketing strategy (Tran Phi Hoang et al., 2016).
2.2.8. Digital device types
Digital devices, exceptionally smart mobile devices, are significant for day-to- day operations (Islam et. al., 2013). The retail sector has seen the enormous potential of mobile technology, which was the beginning of the rapid development of mobile purchasing (Grob, 2015), as smartphones are, according to many scientists, large
32
shopping opportunities (Bang et al., 2013; Chong, 2013). According to DESI (2020), 71% of Europeans already use transactional activities on the Internet, such as shopping. The latest Global Web Index survey (2017) confirmed the changing consumer behaviour concerning online purchasing because users rather prefer smart mobile devices instead of PC’s/laptops. The Statista statistical portal (2017) stated that consumers are visiting online stores and gaining more information about the product via smartphones than desktops. Gender is also one of the most influential factors affecting the general use of the Internet (Jackson et al., 2008). Several studies have reported that men have a significantly more positive attitude towards new technologies compared to women (Mitra et al., 2005; Zhou et al., 2007). A study by Hart et al. (2007) found that men have poor shopping experience during the purchase and therefore prefer an online environment for purchasing. Further research has pointed out that men tend to try new things, while women prefer traditional methods (Doolin et. al., 2005). Therefore, it is expected that the preferences of digital devices used to buy products in the online environment are different between men and women and digital device types do influence the purchasing intention of consumers.
2.2.9. Online advertising types
Online advertising has been widely used by companies and advertisers to promote their products and services (Kaye and Medoff, 2001) and is the new platform for generating attention and awareness among consumers (Rowley, 2001). A great number of companies have spent huge amounts of money on online advertising.
Considering the huge sums spent, it is critical that companies ensure that online advertising is effective in generating reasonable returns. According to Rodgers and Thorson (2000), online advertisements can be in the form of banner advertisements, pop-advertising, sponsorship, hyperlinks, and websites. According to Tsang and Tse (2005), online advertising is effective if it is able to generate an immediate response from consumers. Multimedia, pictures, and content are one of the main types of online advertising (Escalas and Rutgers, 2003). Multimedia is a form of expression describing elements of online content such as audio, video, and animation (Rosenkrans, 2007). Tsang and Tse (2005) found that consumers respond favorably to animated colors, text, and graphics on websites. Companies, therefore, develop digital video advertisements to increase consumer involvement with their brands. Pictures
33
and images can make advertisements appear more attractive to potential customers (Taylor et al., 2008). Kumar (2008) found that pictures are more effective than content in capturing consumers’ attention in online advertising. Content is the third feature of online advertising. It provides consumers with written information about products and services. According to Baltas (2003), short, concise messages lead to effective banner advertisements. Adam (2003) found that advertisers focus on delivering concise messages on banners in order to draw favorable consumer responses.
2.2.10. Online advertising channels
Digital channels have a global reach capability, which makes marketing campaigns reach many customers in a fast and effective way, something that was not possible with traditional channels. While the existence of multiple channels is an opportunity, it is also a challenge. Consumers browse multiple channels and absorb different types of content from multiple devices. It is therefore important for retailers to thoroughly understand consumer behavior and which channels consumers use the most and thus tailor them to their marketing strategies (Ashraful, A., 2021). An appropriate choice of channels can help develop engagement between brands and customers and enable companies to achieve greater financial returns. Digital channels, according to Wagner et al. (2020), are “digital shopping formats that businesses use to offer online shopping opportunities to consumers”. Straker and Wrigley (2019) divide digital channels into some types: (1) functional, in which website and email are included; (2) social, in which social media are included; (3) community, in which forums and blogs are included and (4) corporate in which online advertising is included. Hallikainen et al. (2018) consider the following types: (1) functional type, which contains the website, email, search engines, and online chat; (2) social type, which encompasses social media, such as social networks and photo and video content sharing pages and (3) the community type, such as blogs and forums.
Labanauskaité (2021) on the other hand, identify the website, email, social media, and search engines through the search engine optimization tool as the channels used by companies to communicate with customers. Duarte (2018) proposed that digital channels are classified into website, digital advertising, email marketing, and social media. The authors established the relationships between the stages of the decision
34
process and the digital channels, indicating which channels are more appropriate for each stage of consumer behavior. Based on the analyses of different authors, this study will look at what are considered the five major existing digital channels: (1) the website or e-commerce platform (e-bay, shopee); (2) search engines (google); (3) email; (4) social media or networking platforms (facebook, twitter, linkedIn, instagram), (5) messaging application (Zalo, Viber).
2.2.11. Online sales promotion strategies
Online sales promotion is the activities, using all kinds of inducements, to stimulate the target consumers and accelerate their buying intention to the particular product/service (Pathak, et al., 2010). Prior marketing research focused on how sales promotion impacts the behavior of consumers, particularly their purchasing decisions (Neslin et al, 1985; Neslin et al, 1995; Zhang et al, 2000). Most studies conclude that sales promotion can significantly impact the behavior of consumers and their purchasing decisions, although the effect of its various components might be different (Neslin, 2002). Similar to other retail methods, online channels have various promotional tools such as logos, banners, pop-up messages, e-mail messages, and text-based hyperlinks to web sites, etc. These types of promotions have positively affected online buying (Gallagher et al., 2001; Thota, et al., 2010).
Promotions are used for cognitive evaluations of a product and purchasing decisions (Raghubir, 2004). The American Marketing Association (AMA) defines a company's total promotion mix as the specific blend of advertising, sales promotion, public relations, personal selling and direct marketing tools that a company uses to persuasively communicate customer value and build customer relationships (Ehrman, 2011). Kotler (1999) defined sales promotions as “short-term incentives used to encourage the purchase or sale of a product or service” in which sales promotion includes a wide variety of promotion tools designed to stimulate earlier or stronger market response. Online retailers provide diverse sales promotions, such as free gifts, discounts, or free shipping to attract shoppers to their websites. Promotion is also one of the important attributes that contribute to generating positive store image (Collins- Dodd & Lindley, 2003; Thang & Tan, 2003).