During the period between late 18th and early 19th century, the world experienced the Industrial Revolution era, when major changes in agriculture, manufacturing, mining and transportation had a profound effect on the socioeconomic and cultural conditions in most parts of the world. The commencement of the Industrial Revolution marked a major turning point in human society because almost every aspect of daily life was eventually influenced in some way.
Now, again the world is experiencing a similar kind of a revolution - the era of the Internet. The Internet has already earned a permanent place in history as the innovation that has changed the way the world sends, receives and shares information. The effects of the Internet are felt by everyone from young preschoolers to senior adults, from rocket scientists to casual bloggers. The immediacy of the Internet gives people the means to latest news and updates, to network with friends and to buy almost anything they want or need, without ever having to get off the couch. These phenomena can be attributed to the increasing use of the Internet in conducting businesses.
Overview: Virtual Shopping
From business point of view, the Internet has changed the ways companies sell products to customers and distribute products to retailers. The Internet has sprung e-commerce, by which companies or sites offer to transact or facilitate the selling of products and services online (Kotler & Keller, 2009). Virtual shopping is the process consumers go through to purchase products or services over the Internet and it is a type of e-commerce used for business-to-business (B2B) and business-to-consumer (B2C) transactions (Wikipedia, 2009). Virtual shopping has experienced rapid growth since the early years and it is well known to most of the Internet researchers that, the volume of online business-to-consumer (B2C) transactions is increasing annually at a very high rate. According to ACNielsen (2008), more than 875 million people in the world have shopped online. The 2007 global survey conducted by ACNielsen also revealed that, over 85% of the world’s online population has used the Internet to make a purchase, up 40% from 2005. More than half of Internet users are regular online shoppers, who make online purchases at least once a month. ACNielsen also reported that, across the globe, the most popular and purchased items over the Internet are books (41% purchased), clothing/accessories/shoes (36%), videos/DVDs/games (24%), airline tickets (24%) and electronic equipment (23%). Meanwhile, Forrester (2008) forecasts that online retail sales will grow from US$174.5 billion in 2007 to $235.4 billion in 2009. Similarly, Internet World Stats (2009) cited that about 24.7% of the world’s population in 2009 is Internet users, which represents more than 1.67 billion people on the globe.
The most common method of payment for online purchases is via credit cards, as 60% of global online consumers have used their credit card for a recent online purchase, according to ACNielsen. However, consumers also seek for alternative payment channels and 25% of online consumers do prefer alternative methods such as PayPal, whereby consumers could pay directly by debiting their current or savings account.
Unlike traditional in-store retailing, where shopping information is conveyed to consumers through several channels, i.e. through store environment, product trial, product offering or service (Schiffman et al., 1977), virtual shopping relies solely on the web interface for communication and for managing customer relationships (Jiang & Benbasat, 2002; Benbasat & DeSanctis, 2000). A distinctive feature of virtual shopping is transactions no longer require the physical coordination of buyers and sellers. Now, market participants find each other almost easily on their computer screens. There are many aspects of market interaction which are affected by this online nature of trade. On the supply...