Social Networking Atmosphere and Online RetailingARTICLE 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 sellers2. Information – user/consumer-generated content3. Management – business strategies, models and polices4. 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 preferences2. Preferences of other consumers3. Expert recommendations4. Item characteristics5. 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 25• 3.3% less than 20• 13% between 26 and 29• 0.7% 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 dimensions1. Convenience: ease of sharing, connecting, and interacting2. Personalization: providing personalized information based on

consumers’ SNS profiles3. 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

Youtube• http://www.youtube.com/watch?v=vLorfbxj8TI