Consumer Perceived Risks Towards Online Group Buying Service for Fashion Apparel Products

Abstract

In recent years, electronic commerce has been gaining its popularity and a new type of online shopping model called online group buying has got much attention. Group buying is defined as a buying event participated by a group of customers who may not know each other and is usually organized by some electronic means, such as the Internet, to approach retailers together in order to get discounts for a particular product or service. Obviously, the collective bargaining power of a group of customers has implied a more favorable price for the product. Due to the rapid growth of group buying, many business challenges and new sources of uncertainties have also arisen. In the literature, it is commonly believed that customers perceive a higher level of risk in Internet shopping than the traditional bricks-and-mortar store shopping (Biswas and Biswas 2004) and the level of perceived risk depends on various factors. If companies can reduce customers' perceived risk level, there will be a higher possibility that customers buy more in quantity and frequency through the Intemet (Doolin et al. 2005). As a consequence, for the long-term development of group buying, group purchase companies should find ways to reduce customers' perceived risk in order to increase their buying intention. Motivated by the observed industrial practices in group buying, this chapter contributes to the literature by achieving the following research objectives: (1) to understand different types of customers' perceived risk when they purchase apparel through group buying companies, (2) to identity the critical factors that will influence the different types of customers' perceived risks, (3) to reveal the relationship between various risk-reducing strategies adopted by customers and individual influential factors that affect their perceived risks, and (4) to provide suggestions to group buying companies on how they could reduce customers' perceived risks. (PsycINFO Database Record (c) 2016 APA, all rights reserved)