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Introduction
Background
At the turn of a new millennium, the business environment
has undergone a rapid transformation with the Internet, making it possible for a large number of
users to access vast amounts of information through a diverse array of technical tools and
services. Never before have consumers been able to shop from anywhere at anytime with a few clicks
of their mouse. As a result, online shopping, an unforeseen event only a few years ago, has
continued to grow. Between 1998 and 1999, business-to-consumer Internet sales in the United States
grew by 120%, to approximately $33.1 billion (Shop.org & Boston Consulting Group, 2000). In
2000, Forrester Research (2001) reported that online sales to consumers amounted to $48.3 billion,
representing an annual growth of 45.9%.Despite these impressive sales growth rates, evidence suggests that many consumers search
retailer Web sites intending to purchase, but subsequently abandon these purchase attempts. Jupiter
Communications reported that approximately 72% of online users research products once per month
(Shop.org, 2001). Such high levels of search activity should translate into similarly high purchase
levels. However, it was estimated that business worldwide lost approximately $6.1 billion in 2000
due to failed purchase attempts (Blank, 2000). Conversion rates, the proportions of consumers
buying from sites visited remain low, ranging between 2.8% and 3.2% according to a 2000 Boston
Consulting Group study (Shop.org & Boston Consulting Group, 2000).Moreover, a recent survey of 9,500 online shoppers conducted by BizRate.com revealed that as
many as 55% of online shoppers abandon their shopping carts prior to checkout, and 82% abandon them
at the point of sale (Shop.org, 2001). These statistics suggest that while the Internet has become
a significant source of product information, several barriers exist that inhibit consumer movement
from information search to product purchase. Among reasons commonly cited include reluctance to
supply personal and credit card information, technical problems with Web sites, and difficulty in
locating products.
Problems
In theory, the Internet provides vast possibilities for
information search and comparisons unconstrained by time and place which traditionally restricted
consumer behavior in the physical marketplace (Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer and
Wood, 1997; Bakos, 1997; Sheth and Sisodia, 1999). To examine this distinctive change, several
studies have adopted the economic perspective in analyzing the efficiency of the electronic market
(Bailey, 1998; Bakos, 1997; Brynjolfsson and Smith, 2000) and implications for consumer information
search with the focus on search costs (Degeratu et al., 1998; Hoque and Lohse, 1999; Lynch and
Ariely, 2000). These studies, using conventional economic theories, have simply assumed that
consumers search the same way in an online environment as they do in the physical environment.
Furthermore, these studies presume a total separation of the physical and electronic marketplaces
and often limit their investigation to a particular Web site and its design.Several reasons suggest that conventional economic theories do not adequately explain
consumer behavior in this new marketspace. First, the fundamental premise of economic theory is
that information search will increase when search costs are reduced (Stigler, 1961). Empirical
evidence, however, has shown otherwise. By examining the shopping patterns of a large panel of
online users over time, Johnson et al. (2000) found that the levels of search across three product
categories are fairly low, ranging from 1.1 (stores for books) to 1.8 (stores for travel-related
products). Another study by Jansen et al. (2000) revealed a similar pattern from the analysis of
transaction logs containing 51,473 queries posed by 18,113 users of Excite (http://www.excite.com). The results show that Web
queries are short. Most users had only few queries per search. In fact, 76% of users did not go
beyond their first and only query.Second, convenience is often cited as the major reason for consumers to shop online (Burke,
1998; Jarvenpaa and Todd, 1997). When consumers perceive greater search costs in the physical
marketplace, it is likely they search for information online where search costs are relatively
lower. If consumers’ motivation to shop online is to reduce effort and save time, why should one
expect that consumers will search for more information online even if the search cost is relatively
reduced?Third, it is cognitive, not only physical effort that affects online search behaviors.
According to the Roper Starch Survey, it takes about 12 minutes on average before a user gets
frustrated when searching the Internet (“Just the Facts,” 2001). Although physical efforts (e.g.,
going to stores) have been reduced to mouse clicks, the cognitive challenges of interacting with
computers and online information remain that limit consumer information search within and between
sites.In order to provide a clearer understanding of online information search behavior, one needs
to recognize that the Internet is not an isolated channel. It coexists, complements and competes
with other conventional channels used by consumers to search for information and make decisions
(Peterson et al., 1997). What remains unexplored is the impact of consumer choices of these
established channels on subsequent information acquisition online, and how the process of
information search occurs – not only within a Web site but also between different Web sites in an
environment characterized by human-computer interaction. This chapter maintains that a consumer’s
decision to search for information in a particular channel is likely to influence subsequent
information acquisition. Therefore, when investigating online consumer search behavior, it is
necessary: (1) to incorporate consumers’ online information search in reference to conventional
channels, that is consumers’ motivation to search information online, and (2) to recognize
consumers’ perceived search costs in the context of online environment. This chapter provides a
systematic examination and a conceptual framework for online consumer information search
behavior.
