Understanding consumer online shopping behaviour from the perspective of transaction costs

3.6.5 Differences Cross Product Categories 
After identifying and categorizing the antecedents and consequences of consumer TCs of 
online shopping, this study further develops hypotheses concerning the differences in the 
hypothesized causal relationships across product categories.
The extant literature has highlighted the importance of product categories in designing 
different marketing strategies and leveraging firms’ resources and capabilities in both 
traditional and online firms (Hassanein and Head 2004, Lian
 et al.
2012, Sharkey
 et al.
2012). 
Given the importance of product categories in formulating company strategies, it is puzzling 
that no previous study has sought to provide empirical support systematically addressing 
what the differences are in the relationships between antecedent factors, TCs and behavioural 
consequences across different product categories. This study attempts to address these issues 
by exploring the differences in the aforementioned relationships between product categories. 
To this end this study will advance the TCT by signifying the importance of product category 
and articulating the possible different relationships across product categories. From a 
managerial perspective, the study attempts to provide guidelines for managers in relation to 
marketing strategies development in terms of the different effects of product categories on the 
linkages between antecedents and TCs, and between TCs and behavioural consequences. 
By drawing up the merits and deficiencies of the prior product classification research, this 
study adopts Nelson’s (1974) search and experience goods classification framework to 

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examine the differences in the relationships between antecedents, TCs and behavioural 
consequences across two product categories. Nelson’s classification (1974) is applicable to 
online shopping context and appears to be a more salient product classification scheme 
compared to the conventional classification framework (Girard
 et al.
2002, Leahy 2011). It 
has been widely used in the previous research (Wright and Lynch Jr 1995, Huang
 et al.
2009, 
Park and Lee 2009, Mudambi and Schuff 2010, Leahy 2011).
According to Nelson (1974), search products tend to represent products for which 
information can be easily obtained prior to purchase, and the customer can have reasonable 
confidence of making the purchase decision without having to use or sample these products. 
In contrast, experience products tend to represent products for which attributes-related 
information cannot be known prior to purchase, and the customer cannot have reasonable 
confidence of making the purchase decision without inspecting, previously using or sampling 
these products. Deriving from Nelson’s definitions, Klein (1998) describes that a search 
good’s quality is verifiable on inspection, whereas an experience good’s quality is difficult to 
judge on inspection. Only on the purchase and usage of an experience good can its true 
quality be revealed. 
Search products require less direct examination (such as books, computer software, airline 
tickets etc.) and are therefore perceived as less risky to buy online as opposed to experience 
goods where customers expect quality assurance (Klein 1998, Liang and Huang 1998, 
Vijayasarathy 2002). Girard et al. (2003) maintain that consumers may prefer shopping from 
homes for search products such as books and toys that involve less uncertainty, whereas they 
may be more brand-conscious and risk-averse toward experience products such as jewellery 
and clothes that involve more risks, and may be more willing to spend time to see, smell, test 

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and feel the products in retail stores. Thus, it can be concluded that the Internet would seem a 
more suitable purchase medium for search products due to the vast availability of information 
online and the need to make a confident purchase without having to physically be present to 
sample or inspect the products (Liang and Huang 1998, Lian and Lin 2008), whilst the brick-
and-mortar store would be a better shopping channel for purchasing experience products 
because consumers can inspect or sample the products at the shopping location, gather more 
information first-hand, and acquire confidence prior to making the purchase (Chocarro
 et al.
2013). To a large extent, consumers’ shopping channel preference depends on the product 
category they intend to buy and consumers' shopping efforts vary with respect to the type of 
products (Girard
 et al.
2002, Park 2002, Vijayasarathy 2003).
In the online context, due to the differences in potential uncertainties and risks in the 
purchase of search products and experience products (Bock
 et al.
2012), consumers’ 
perceived TCs between the two product types may differ in some aspects as the time and 
cognitive efforts involved in the process of searching, evaluating and monitoring may vary 
(Liang and Huang 1998). The search cost represented by the amount of time and effort for 
gathering and processing product attributes-related information prior to purchase depends on 
the amount of discrepancy between what they already know and what they need to know 
about the products that they tare searching for in order to feel confident enough to evaluate 
the quality of the products and finally purchase them (Liang and Huang 1998). The 
discrepancy increases as the products move from search to experience category (Liang and 
Huang 1998). Accordingly, the degree of search cost consumers perceive is expected to be 
lower for purchasing search products, but higher for experience products due to the 
increasing uncertainty in the information quality and difficulty in searching for reliable 
information. A similar rationale can be applied to explain the difference of other components 

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of TCs. Thus, there will be significant differences between search products and experience 
products with respect to the overall perceived TCs. Since the overall TCs differ by the 
product categories, their effects on subsequent behavioural outcomes are expected to be 
different for products from two product categories.
Similarly, the antecedents affecting consumer TCs of online shopping may be varied by the 
product categories. For those who have purchased experience products their concerns about 
product quality, e-service quality, privacy and security, and online environmental uncertainty 
may be higher than those of purchasing search products. Consumers have to spend more time 
and effort evaluating the experience products’ quality prior to purchase because it is very 
difficult to be assured that the quality of experience products are reliable without trying and 
touching them (Chocarro
 et al.
2013), whereas it may be easier for consumers to evaluate the 
search products’ quality as the full information for dominant search product attributes can be 
known prior to purchase and their quality can be ascertained without trying or touching them 
(Liang and Huang 1998). As such, product quality concern has a relatively stronger effect on 
TCs for experience products than for search products. Similarly, in addition to product 
quality concern, other antecedents (e.g., e-service quality, and online store reputation) can 
also pose different impacts on TCs between two product categories.
Building on these discussions, the magnitude of the aforementioned relationships in the 
proposed research model, including the effects of antecedent variables on TCs and their 
effects on online behavioural consequences, may vary depending on the product categories 
online shoppers have purchased. Thus, the study posits the following research hypotheses: 

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H9a. The effects of antecedent factors on a customer’s perceived TCs associated with 
purchasing from an online store are different between experience products and search 
products. 
H9b. The effects of a customer’s perceived TCs associated with purchasing from an online 
store on his/her behavioural consequences are different between experience products and 
search products.