Understanding consumer online shopping behaviour from the perspective of transaction costs

2.3.3 Online Vendor/Store and Product Characteristics 
As Swaminathan et al. (1999) assert, vendors have the potential to influence consumers’ 
online shopping behaviour. For example, a well-known vendor name may help relieve 
consumers with respect to perceived risk and establish trust in them, and hence motivate 
consumers to shop at an online store (Lee
 et al.
2011a, Aghekyan-Simonian
 et al.
2012). The 

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literature also notes that product characteristics affect consumers’ choices among online 
stores, traditional stores and other shopping options (Chen
 et al.
2010, Lee
 et al.
2011a, 
Aghekyan-Simonian
 et al.
2012). In this section, online vendor/store and product 
characteristics are thoroughly reviewed with a summary of the findings in Appendix B.
2.3.3.1 Risk Reduction Measures 
In the context of online shopping, several studies have been conducted in relation to the 
concept of risk reduction. Risk reduction measures, such as a money-back guarantee policy, 
can be seen as a process-based trust production mechanism (Akçay
 et al.
2013, Chang
 et al.
2013). Although some customers may not consider this to be a risk reliever, it is still 
perceived as an effective measure to act against the unreliable online transaction 
environments (Suwelack
 et al.
2011, Souza
 et al.
2012). Kim and Kim (2004) and Van den 
Poel and Leunis (1999) concluded that providing a money-back guarantee for consumers 
increases the likelihood of purchasing online. Consumers who are concerned about product 
return difficulties are more likely to abort an online transaction (Cho 2004, Foscht
 et al.
2013). In addition to a money-back guarantee, buying products from a well-known online 
store is another effective way to reduce product risk (Van den Poel and Leunis 1999, 
Jarvenpaa
 et al.
2000, McKnight
 et al.
2002, Mark and Harris 2007, Lee
 et al.
2011a). Other 
studies investigated whether the reduced price would increase the likelihood of purchase 
online (Van den Poel and Leunis 1999, Kim and Kim 2004), and the results showed that 
selling at a reduced price has a significant positive effect on consumers’ online shopping 
intention with respect to the specific vendors. Moreover, a large volume of published studies 
(Grewal and Dharwadkar 2002, Kim and Kim 2004, Mark and Harris 2007, Lee
 et al.
2011a, 
Tsai
 et al.
2011, Ha and Stoel 2012) described the role of security and privacy measures on 
online shopping adoption. The findings revealed that security and privacy protections reduce 

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risks of online shopping and increase the purchase intention of online customers. For example, 
the presence of privacy policy improves consumers’ trust in online vendor and further 
increases their intention to purchase online (Lee
 et al.
2011a) . 
2.3.3.2 Online Store Features 
In the online environment, customers interact with a retailer through its website, which is 
essentially an information system (i.e., online store). Therefore, the feature of this 
information system play an important role in shaping the customer’s shopping experience 
(Luo
 et al.
2012). Previous studies examining the impacts of online store features on 
consumer decision-making mainly derive from three research steams, namely information 
content/quality, online store design and online store image (Mark and Harris 2007, Verhagen 
and van Dolen 2009, Pearson