E-Commerce & Security & Consumer Behavior

Electronic Commerce: Security and Consumer Behavior

According to Kamali and Loker (2002), Internet retail sales represent a new and increasingly vital commercial milieu. E-commerce or electronic commerce saw sales revenues grow 12.1 percent in 2001 to $31.4 billion - a figure expected to reach $81.1 billion by 2006 (Kamali & Loker, 2002). While it is clear that many more consumers are electing to shop online than in the past - a shift in behavior that may be due to the sense that online shopping is safer and more secure than it was initially and to the adoption of alternative shopping avenues. This essay will examine these issues, arguing that browsers become buyers in cyberspace as perception of safety, product quality, and retailer reliability increase - an idea also advanced by Li, Luo, Lepkowaska-White and Russell (1999).

Atanasov (2001) contends that it is anticipated that the worldwide market for business-to-business and business-to-consumer e-commerce will total $3.1 trillion in 2004 as compared to $350.4 billion in fiscal 2000-2001. Among the most profitable products and services sold online are consumer goods such as books, videos, music, computers and other tech products, and travel (Schmerken, 2001). Other profitable sectors include investment transactions, which Schmerken (2001) considers to have generated a wave of corporate spending on e-commerce.

The Internet and its myriad e-commerce or marketing sites, represents what researchers believe to be a

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the security concerns of online shoppers and potential shoppers. These researchers and others reported that online buyers are also concerned about security issues when making online purchases. Though many consumer concerns regarding the inherent safety of financial transactions online have been resolved through the development of sophisticated encryption programs, many consumers require additional assurance that their financial data will be held in confidence. Other security issues that were identified by Mauldin and Arunachalam (2002) focus on retailer disclosures, information risk, product risk, and familiarity with the retailer and the product. Generally, Mauldin and Arunachalam (2002) found that intent to purchase rather than merely browsing online increases in direct association with a sense of security and comfort. Retailers who offer their products online are therefore advised to emphasize product disclosure and retailer disclosure and reduced information risk in their e-commerce sites. Though most online retailers do provide clear descriptions of security procedures, some Internet shoppers still avoid using credit cards online. Overcoming resistance to this fear is one of the key tasks that must be undertaken in o

Category: Business - E