Understanding consumer online shopping behaviour from the perspective of transaction costs

6.2.5 Product Category Comparison 
Hypotheses 9a and 9b propose that different product categories may give rise to differences 
in the relationships between TCs and their antecedents as well as the relationships between 
TCs and their behavioural consequences (i.e., online purchase behaviour and customer 
loyalty). The findings show that the magnitude of the proposed relationships varies 
depending on the product categories online shoppers have purchased.
Specifically, the search products have a greater tendency to be bought online. The findings 
are in sync with the extant literature (Girard
 et al.
2002, Girard
 et al.
2003, Byramjee and 
Korgaonkar 2004, Balasubramanian
 et al.
2005, Chocarro
 et al.
2013) which suggest that 
consumers’ preference to shop online is significantly higher for search goods than for 
experience goods. The possible reason for this would be that the information for search 
products can be easily obtained prior to purchase through using the Internet as an information 
source and search tool, therefore strengthening the confidence from consumers for making 
online purchases. The results also indicate that the effects of online buying frequency, e-
service quality, and reputation of online store on TCs are stronger among consumers who 
have purchased search products than for consumers who have purchased experience products. 
Also, the relationship between customer satisfaction and loyalty appear stronger for search 
products relative to experience products, which bear support for past literature (Byramjee and 
Korgaonkar 2004) wherein similar results have been found.

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On the other hand, experience products have a greater tendency to be bought in-store. The 
impacts of perceived Internet expertise, Internet access availability, perceived convenience, 
product quality concern, and privacy and security concerns on TCs are stronger for the 
experience products, as compared with those for the search products. The Internet expertise is 
related to the costs of learning. Purchasing experience products involves a higher level of 
learning costs as such products required consumers to own more Internet skills for the 
purpose of examining the products and comparing the subjective features, and thus perceived 
Internet expertise has stronger effect on TCs for experience products. Since experience 
products require more inspection and are thus regarded as more risky to buy from online 
stores, consumers would have to spend more time and effort searching for relevant 
information and checking their qualities, and would perceive less convenience, thereby 
significantly increasing their perceived TCs of online shopping. In other words, the lack of or 
inadequate information about the experience products increases the uncertainty and difficulty 
in examining the product quality, leading to a high level of the TCs. Consistent with Lee and 
Kim (2008), consumers perceive low quality of “high touch” products such as apparels and 
high quality of “low touch” products such as computer software. When purchasing the 
experience products (e.g., shoes, cosmetics, and perfume), consumers may also need to give 
more personal information to online vendors so that they can find out the most suitable items 
for their customers. In this case, consumers may worry about the protection of their personal 
information which may be misused by online vendors for other purposes, thus, they may 
spend additional time and efforts monitoring online vendors’ behaviour and would bear more 
psychological costs, finally resulting in the increased perceived TCs.
Results also indicate that there are significant differences between search products and 
experience products with respect to the effects of TCs on behavioural consequences. The 

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findings show that consumer TCs has stronger effects on online purchase behaviour and 
loyalty towards purchasing experience goods. The possible explanation is that, due to the 
difficulties in getting full information of key experience product attributes and determining its 
quality, consumer confidence level decreases and perceived TCs rise as the amount of 
information available decreases, which will in turn affect consumer’s online purchase 
behaviour and loyalty. In addition, the effect of TCs on satisfaction appears stronger as well. 
Such stronger effect is consistent with the previous findings (Engel
 et al.
1995, Klein 1998, 
Liang and Huang 1998)
which state that experience goods have the highest amount of 
consumer dissatisfaction than other product categories. 
The results based on product category comparisons clearly show that the hypothesized 
relationships differ in the strengths when purchasing search goods and experience goods. 
This study extends the extant literature on product comparison by advocating a theoretical 
conjecture that the product categories influence the consumer TCs, their causes and effects in 
the online shopping environment. Importantly the findings provide guidelines for marketing 
practices in firms seeking to develop different strategies for different product categories to 
better meet consumer needs, further entice online purchase behaviour and develop long-term 
relationships with customers.
In this section, the statistical results presented in chapter five were discussed in detail. The 
next section addresses the theoretical and managerial implications of the study.