Social Networking Atmosphere and Online Retailing ARTICLE BY: Min-Sook Park, Kong-Kuk Shin, and Yong Ju PRESENTATION BY: Abbey Midanik

Intro Environment of online shopping becoming more important Music, colours, symbols, and other non-product related factors Atmospheric quality of medium major determinant of effectiveness

High-Task/Low-Task High-task relevant environment  Price, delivery, return policy, and pictures of merchandise Low-task relevant environment  Website colour, fonts, and sounds Two environments were hypothesized to influence consumers’ online shopping outcomes Web esthetics, esthetic formality, and esthetic appeal influence shopping responses

Social Networking Services (SNS) Development of SNSs leads to large number of online retailers that have begun to connect website with SNSs Facebook and Twitter SNS users share interests and activities in real time on social networking sites Most valuable asset of social networking services is rich personal profile and personal social network

Contributing Factors Social cue: employee/customer interaction Non social cue: merchandise’s quality Social cues in retail websites may help improve perception of employee presence Avatars can have effect on social interaction Customer-to-customer interaction in commercial context enhanced service value perceptions

Research First: Seeks to fill gap and find out whether online stores connecting with SNSs to create a customer-customer social environment can influence online shopper’s response Second: research model and hypotheses are presented to explicate how social networking environment can affect online shopping outcomes Third, some managerial and research implications are discussed

Social Networking Environment of Online Store Online retailers connect website with social networks Third-party websites can utilize users’ online “social graph” Social Graph: map of SNS user’s relationship Social Commerce Platform: Connect with online network friends and facilitate consumers’ participation in buying and selling products and services Social Commerce environment includes 4 components: 1.People – individual consumers and sellers 2.Information – user/consumer-generated content 3.Management – business strategies, models and polices 4.Technology – hardware, software infrastructure, applications

Stimulus-Organism-Response (S-O-R) Donvan and Rossiter first adapted S-O-R in retail store environment to study effects store atmosphere on shopping behaviour Environmental cues act as stimuli that affect individual’s cognitive and affective reactions, which affect behaviour Stimulus: factors such as store environment, product display,etc. Organism: refers to individual’s cognitive and affective states Responses: include nonverbal responses, such as word-of- mouth communication How web esthetic formalist and web esthetic appeal influence online consumers’ psychological reactions

Convenience and Satisfaction Convenience perceived as one of major benefits Non-Internet shoppers more likely to seek convenience E-Satisfaction: Measure of satisfaction with Internet shopping Current study views convenience as ease of sharing and interacting with like-minded people Hypothesis: The perceived convenience of social networking environment will positively affect customers’ satisfaction with online store atmosphere

Convenience and Perceived Usefulness Individual’s perception that using new technology will enhance or improve performance Significant characteristic of social networking environment is that through its use, its easy to share and connect Online retailers design websites to provide consumer with website that is easy to navigate Current study posits convenient design of social networking environment is employed because easy to share, connect and interact with others Hypothesis: Perceived convenience of social networking environment will positively affect customers’ perceived usefulness of online store atmosphere

Personalization and Satisfaction Personalized service can only be offered when online retailers are able to acquire customers’ information Information about customers and their profiles always been of great importance to sellers Allows vendors to target customers on one-to-one basis Users will be satisfied when recommended content fits user interests In current study, social networking environment can provide personalized service based on open profiles of consumers’ and friends’ SNS person profiles Hypothesis: perceived personalization of social networking environment will positively affect customers’ satisfaction with online store atmosphere

Personalization and perceived usefulness Recommendation system based on five sources: 1.Person’s expressed preferences 2.Preferences of other consumers 3.Expert recommendations 4.Item characteristics 5.Individual demographics Information usefulness refers to degree to which information is perceived to be valuable, informative, and helpful Personalized services can reducde information overload and increase user satisfaction Reducing information overland can help consumers shop more effectively Hypothesis: The perceived personalization of social networking environment will positively affect customers’ perceived usefulness of online store atmosphere

Social surveillance and satisfaction Surreptitious strategies individuals use in communication technologies to gain awareness of another user’s offline or online behaviour Contemporary surveillance involves collection of information from other individuals, as opposed to traditional view of surveillance as close of observation of suspects Logistical support, technological characteristics, information characteristics, homepage presentation, and product characteristics are significantly correlated with customer satisfaction Social netowrking environment facilitates consumers’ observation of others to find more valuable information to help by products in online store Hypothesis: Perceived social surveillance benefit of social networking environment will positively affect consumers’ satisfaction with online store atmosphere

Satisfaction and purchase intention Satisfaction leads to positive attitude toward purchase experience, products, and service Can positively influence future purchase intentions Oliver’s Expectancy-Disconfirmation model  Attitudes about purchase experience are led by consumer expectations  After consumer purchases and/or uses product, evaluate purchase experience of product relative to initial expectations  Outcome of evaluation is decision to be satisfied/dissatisfied Current study views satisfaction as response to social networking environment Hypothesis: Satisfaction with online atmosphere will positively affect consumers’ purchase intention in online store

Perceived usefulness and purchase intention Subjective perception that using technology would improve users’ performance in completing task Positively associated with satisfaction and information system continuance intention Perceptions of usefulness are most powerful predictor of e- shopping Satisfaction and perceived information usefulness anticipated as important predictors of actual continuance behaviour Consumer cognitive states have impact on shopping outcomes In study, perceived usefulness of social networking environment is cognitive statement Hypothesis: perceived usefulness of online store atmosphere will positively affect consumers’ purchase intention in online store

Moderating effect of gender Males and females have different attitudes Men more like to purchase product online Women more rational than men and want more accurate description Women perceive online shopping as lacking real feelings of shopping Women more concerned with privacy issues of online shopping Men more sensitive to characteristics on social networking Men pay more attention on achieving own objects and satisfying own needs Women more interested in what others talking about or products

Moderating effect of gender Hypotheses Perceived convenience of social networking environment has greater influence on satisfaction among males Perceived convenience of social networking environment has greater influence on perceived usefulness among males Perceived personalization of social networking environment has greater influence on satisfaction among males Perceived personalization of social networking environment has greater influence on perceived usefulness among males Perceived social surveillance benefit of social networking environment has greater influence on satisfaction among females Perceived social surveillance benefit of social networking environment has greater influence on perceived usefulness among females

Data Collection Study adopted online survey system concentrated on Korean SNS users 270 valid questionnaires used for final analysis 50.7% men and 49.3% women 83% between ages of 20 and % less than 20 13% between 26 and % 30 or older Mainly university students 25.9% use computer for less than 1 hour per day 55.9% use computer for 1-3 hours per day 13.7% use computer 3-5 hours per day 4.4% use computer more than 5 hours per day

Moderating effect of gender Data set split into male/female groups SEM analysis conducted with equality constrained mode where stimulus factors and organism factors are fixed

Conclusion S-O-R used to explain consumers’ behaviour in social networking environment Social networking environment assumed to affect consumers’ behaviour in complex way rather than through simple input- output process Characteristics of social networking environment can be stimulus factors in framework and internal states, such as satisfaction (affective) and perceived usefulness (cognitive) of service, were adopted as organism factors Purchase intention was adopted as response to social networking environment

Conclusion cont’d Three characteristics of social networking environment were proven Customer-to-customer social networking environment should be emphasized on these three dimensions 1.Convenience: ease of sharing, connecting, and interacting 2.Personalization: providing personalized information based on consumers’ SNS profiles 3.Social surveillance: providing information on other customers and online social network friends’ activities Three characteristics can affect customers’ affective and cognitive internal states Satisfaction with online store atmosphere and perceived usefulness of online store atmosphere can directly affect customers’ purchase intention

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