The Effect of Social Rewards and Perceived Effectiveness of e-Commerce Institutional Mechanisms on Intention to Group Bu
Previous studies have stressed the functionality and usability of group buying systems, although few studies have focused on social and psychological factors and the business perspective of online group buying. We believe that factors related to consumer
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Abstract Previous studies have stressed the functionality and usability of group buying systems, although few studies have focused on social and psychological factors and the business perspective of online group buying. We believe that factors related to consumer psychology, relation exchange, and institutional mechanisms have not been fully explored by previous studies. These psychological and consumer behaviors are crucial for marketers seeking to increase sales rates. The phenomena are worthy of attention, given the potentially significant market gains offered by this novel business model. This study focuses on the application of social rewards in the group buying context and identifies the issue in the context of online group buying by incorporating factors such as reciprocity, reputation, trust, satisfaction, and perceived effectiveness of e-commerce institutional mechanisms (PEEIM). These factors are identified as critical factors affecting both online and physical shopping. With an online survey, we perform PLS analysis and the results suggest that PEEIM has significant effect towards online group buying intention. The results also suggest that SET factors contribute substantial impact to customer’s online group buying intention. Theoretical and managerial implications were discussed.
Keywords Online group buying Social rewards Intention to use Perceived effectiveness of e-Commerce institutional mechanisms
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M.M. Luo (&) Department of Information Management, National Chung Cheng University, No.168, Sec. 1, University Rd., Min-Hsiung Township, Chia-yi County 621, Taiwan, ROC e-mail: [email protected] S. Chea Business and Information Management, Delaware Valley University, 700 E Butler Ave., Doylestown, PA 18901, USA e-mail: [email protected] © Springer International Publishing Switzerland 2017 J.I. Kantola et al. (eds.), Advances in Human Factors, Business Management, Training and Education, Advances in Intelligent Systems and Computing 498, DOI 10.1007/978-3-319-42070-7_77
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M.M. Luo and S. Chea
1 Introduction Online group buying has become popular with the emergence of U.S.-based sites such as Groupon, launched in 2008. The term group shopping refers to social or collective buying where items can be purchased at significantly reduced prices when enough buyers participate in the purchase. The transaction proceeds only when the required number of buyers is reached. Significant savings can be made by purchasing more products together to reduce the price [1]. This popular trend in online shopping experienced significant growth during 2010 and 2011. In the United States and Europe, online group buying is highly popular and successful, and is based on a simple but powerful concept: consumers enjoy receiving significant discounts on premium products, although merchants are only willing to provide these discounts if they can sell high quantities [2]. A CNN report in 2010 indicated that this concept has motivated a new category of “group buying” websites, at least one of which may be valued
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