ESSAY
THE
EFFECT OF PRIVACY, SECURITY, AND TRUST ON INTENTION TO HAVE ONLINE TRANSACTION
Oleh:
Retno Susanti
NPM : 15.0101.0021
STUDY
PROGRAM MANAGEMENT
FACULTY
OF ECONOMICS
UNIVERSITY
MUHAMMADIYAH OF MAGELANG
2015/2016
DAFTAR
ISI
INTRODUCTION...................................................................................................
1
LITERATURE REVIEW........................................................................................
2
DISCUSSION........................................................................................................
9
CONCLUSION
.....................................................................................................10
REFERENCE........................................................................................................
11
THE EFFECT OF PRIVACY, SECURITY, AND TRUST ON INTENTION TO HAVE
ONLINE TRANSACTION
INTRODUCTION
Changes in behavior patterns and needs of consumers
due to technological development and the flow of information in the modern era
make consumers behave in a more practical. It means that consumers require
speed and accuracy in the fulfillment of their needs. This makes the
manufacturers try to meet the needs of consumers with e-commerce. e-comerce
offers a competitive advantage that removes the concept of space and time.
It is known globally that, in today’s market, it is
extremely difficult to start a new small-scale business and its sustenance with
competition from the well-established and settled or brand owners. Most often,
even if the quality of the product is really good, due to a lack of
advertisement or business at the small scale, it just becomes another face in
the sea, and the product does not reach a larger group of customers. In fast
paced life of today when everyone is squeezed for time, the majority of people
are finicky when it comes to doing physical shopping. Logistically, a consumer
finds a product more interesting and attractive when they find it on the
website of a retailer directly and are able to see item’s details
online(Gupta,2013).
Online shopping is a new technology that has been
created along with the development of the Internet. It is a convenient method
of shopping and allows for a vast array of products to be at your fingertips.
However, fraudulent use of the Internet is often a concern for many shoppers.
Cyber thieves steal identities of shoppers and then exploit them causing a
theft of their identity. This leads to a variety of problems, causing
fraudulent credit card charges, opening new credit accounts, and misuse of
current accounts. This concern is on the minds of Americans who are the largest
buyer of online goods. Most however, feel as though it is worth the risk, or it
is only a limited possibility
At the beginning of shopping via the internet is
rarely desirable. The reasons are the feeling of being fooled, unsatisfactory,
long periode of delivery and confusing booking system. Various websites seek to
guarantee the security of the products in order to attract consumers buying
through their website.
The Internet and its shopping applications continue to
grow not only in terms of quantum but also in terms of their importance to
people and their lives. The population of Internet users continues to
experience rapid growth (Internet World Stats 2011c, 2011b, 2011a) but the use
and adoption of online shopping by online consumers lags behind (Hendery 2006;
Lee & Cheung 2004; Lee & Turban 2001). This suggests that there is
hesitation by online consumers to purchase online, as well as an opportunity to
grow the B2C e-commerce online shopping industry. In essence, there is a gap
between the general use of the Internet for information and communication
purposes versus the specific use for online shopping (Lee & Turban 2001).
Starting from the above presentation it is necessary
to conduct a study that has a close relationship with the intention of
consumers interacting online. The authors took the initiative to conduct
research by lifting the title, "THE EFFECT OF PRIVACY, SECURITY AND TRUST
ON INVENTION TO HAVE ONLINE TRANSACTION.
By exposure to the above, the
formulation of the problem is “How effect of privacy,security,and trust on invention
to have online transaction?”
This essay was
written to complete one of the tasks of teaching English by Miss umi rahmawati
and to find out how the influence of privacy , security , and trust in
simulutan and partially to the intention of consumers to online transaction.
LITERATURE REVIEW
Marketing
Marketing is a social process with the
process of individuals and groups obtain what they need and want by creating,
offering, and freely exchanging products and services of value with others, for
the definition of managerial, marketing is often described as the art of
selling produk.Kotler (2007: 10),
Consumer behavior
Gerald Zaltman and Melanie Wallendorf
elaborated in Mangkunagara (2002: 3) that: "Consumer behavior is the
actions, processes, and social relations by individuals, groups, and
organizations to obtain, use or other product, service, and source- other
sources ".
The Theory of Planned Behavior
According to the theory planned
behavior, the actions of individuals in a certain behavior is determined by the
individual's intention to perform the behavior. Intention itself influenced
attitudes toward behavior, subjective norms that influence behavior, and
perceived behavioral control. According Azjen (1985), attitudes toward behavior
is a positive or negative evaluation in conducting behavior. Attitudes towards
behavior shows the level a person has a good evaluation or unfavorable about
certain behaviors.
Major Characteristics of Online Consumers
The typical Internet user of the twentieth century
is young, professional, and
affluent with higher levels of income and higher
education (Palumbo and Herbig,1998). They value time more than money which
automatically makes the working
population and dual-income or single-parent
households with time constraints better candidates to be targeted by non-store
retailers (Burke, 1997). Actually, both demographics and personality variables
such as opinion leadership or risk aversiveness are very important factors that
are considered in studies trying to determine the antecedents of Internet
purchases (Kwak et al., 2002). Confirmatory work shows that income and purchasing
power have consistently been found to affect consumers’ propensity to shift
from brick-and-mortar to virtual shops (Co-mor, 2000). Internet usage history
and intensity also affect online shopping potential. Consumers with longer
histories of Internet usage, educated and equipped with better skills and
perceptions of the Web environment have significantly higher intensities of
online shopping experiences and are better candidates to be captured in the
wellknown concept of flow in the cyber world (Sisk, 2000; Hoffman and Novak,
1996;Liao and Cheung, 2001). Those consumers using the Internet for a longer
time from various locations and for a higher variety of ser-vices are
considered to be more active users (Emmanouilides and Hammond, 2000). As
Bellman et al. (1999) mention, demographics are not so important in determining
online purchasing potential. Whether the consumer has a wired lifestyle and the
time constraints the person has are much more influential. Risk taking
propensity is also a powerful factor. E-shoppers have higher risk taking
tendencies. Consumers with high levels of privacy and security concerns have
lower purchasing rates in online markets but they balance this characteristic
with their quest for making use of the information advantage of the environment
(Kwak et al., 2002; Miyazaki and Fernandez, 2001). These educated individuals,
as more confident decision makers, are much more demanding and have greater
control over the purchasing process from initiation to completion (Rao et al.,
1998).
Online
Shopping Behavior
Identifying
pre-purchase intentions of consumers is the key to understand why they
ultimately do or do not shop from the Web market. One stream of research under
online consumer behavior consists of studies that handle the variables
influencing these intentions. A compilation of some of the determinants researchers
have examined are: transaction security, vendor quality, price considerations,
information and service quality, system quality, privacy and security risks,
trust, shopping enjoyment, valence of online shopping experience, and perceived
product quality. (Liao and Cheung, 2001; Saeed et al., 2003; Miyazaki and Fernandez,
2001; Chen and Dubinsky, 2003). The lists of factors having a positive or
negative impact on consumers’ propensity to shop do not seem to be very
different from the considerations encountered in offline environments. However,
the sensitivities individuals display for each variable might be very different
in online marketplaces. Factors like price sensitivity, importance attributed
to brands or the choice sets considered in online and offline environments can
be significantly different from each other (Andrews and Currim, 2004). Uncertainties
about products and shopping processes, trustworthiness of the online seller, or
the convenience and economic utility they wish to derive from electronic shopping
determine the costs versus the benefits of this environment for consumers (Teo
et al., 2004). Further studies aiming to complete the full set of factors influencing
consumers’ prepurchase intentions are still much awaited. The Online Purchasing Process
Many studies frequently mention that there is a vast
amount of window shopping taking place online but the number or the rate of surfers
who turn into purchasers or regular buyers are very low (Mayer, 2002; Betts, 2001;
Oliver, 1999). This might happen because of the lack of consumer intention to purchase
an offering from the online environment at the outset. It might also happen because
of various problems that arise during online shopping driving the consumer to abandon
the task in the middle. Therefore, while one stream of research should identify
the reasons behind the purchase reluctance of consumers, another area of concentration
should be why people abandon their shopping carts and stop the purchasing
process in the middle. Such attempts can help to understand how to turn surfers
into interactors, purchasers, and finally, repeat purchases by making them enter
into continuous interaction with this environment (Berthon, 1996). Common
reasons for purchase reluctance are the difficulties and costs of distance
shipping, inadequate amount of purchase related information, troubles experienced
after the purchase such as delivery or refund problems, general security fear,
and various perceived risks such as financial, product-related or psychological
risks (Mayer, 2002; Chen and He, 2003). On the other hand, the reasons of abandoning
purchases are much more technical such as unexpected shipping costs or transaction
complexity (Harvard Business Review, 2000). In other words, some consumers
accept to shop from the Internet in principle but technical complexities or ineffective
systems discourage them. Regardless of the pessimistic state of events,
marketers should not be hopeless about the future. Once the risks consumers
perceive about shopping through the Webare reduced, the environment still
promises a high potential for selected consumersegments. Studies show that
consumers who search for product related information through the Web have
stronger intentions to make purchases online (Shim et al., 2001). Therefore,
building on the information advantage can be expected to pay off in the future.
Constructing effective decision support systems and assisting consumers with
interactive decision tools are also successful attempts that need to be
developed further (O’Keefe and McEachern, 1998; Barber, 2001). However,
investing on the pre-purchase stages of the decision making process is not
adequate. Developing and testing the effectiveness of specific “selling”
strategies and tactics for the cyber market are also crucial. Studies that
focus on currently unavailable but possible tools of cyber shopping in the
future, such as the use of artificial shopping agents that work on behalf of
consumers in the online market (Redmond, 2002), are also very valuable efforts
enlightening the road for future studies.
Consumer
Satisfaction and Loyalty in the Online Market
Investing in consumer satisfaction from the online
experience and creating brand or site loyalty are critically important for
companies that want to have a long run presence on the Web. There are two
approaches taken to induce loyalty into consumers in an online context. One
approach is to focus on concrete factors. For example, creating a convenient
and well-designed online store and offering secure transactions are the
keystones of satisfying e-consumers (Szymanski and Hise, 2000). However, all
satisfied consumers do not become loyal. Personalization attempts and
increasing the social value of online experiences are very important to make
consumers build strong brand relationships in the cyber world. Although Nunes
and Kambil (2001) argue the opposite, some studies find that personalized Web
sites and customer communities are highly influential on the consumer brand
relationship especially for experienced Internet consumers (Thorbjornsen,
2002). Besides, businesses that can create trust and increase the perceived
value of online shopping can turn their satisfied consumers into loyal ones in
the e-marketing environment, too (Anderson and Srinivasan, 2003). The online
environment accommodates so many opportunities for creating loyalty that even
offline offerings can be effectively facilitated with supporting after sale
services provided through the Web (van Riel et al., 2004).
Online vs Offline Shopping
According to Tauber (1972), experiences are an
important part of consuming and shopping. Shoppers are not always simply
looking to buy products, but also want to get pleasure from the shopping
activity .This experience is affected by the customer’s shopping goals, what
they expect, and what their motivations are (Demangeot & Broderick, 2006).
Motivation for shopping online is an important factor to consider when
analysing the shopping experience (Swatman & Chin, 2004). Holbrook and
Hirschman (1982) established that it is highly important to create hedonic
significance through good experiences in order to toughen up the relationships
with consumers. Customer experience involves engaging several of the customer’s
aptitudes to satisfy and create value while he interacts with the organisation,
its products and its other customers. Similarly, an online retailer’s role is
to establish an appropriate environment to help customers in gaining a positive
experience while shopping online (Pentina et al., 2011). When people shop
online, they are not only consumers but also users of the computer (Demangeot
& Broderick, 2007). Huang (2003) stated that the online shopping
environment is highly interactive. Content of the website is a critical aspect
in terms of how accurate and relevant it is. The website design is also very
important if the company wants conduct a successful e-retailing business (Colla
& Lapoule, 2012). The website visuals include: colour themes, font usage,
photos, logos, graphic qualities and so on. These visuals capture the consumers’
attention by communicating a distinct image of the organisation and its
products and services (Demangeot & Broderick, 2006). Factors such as low
prices, good customer service, easy navigation, and also plainly stated return
and exchange policies, are a part of the online shopping experience (Xu &
Paulins, 2005). It is possible to improve the experience of online shoppers by
responding to the problems they may face, particularly safety concerns. The
best way organisations can handle this issue is through communication. They
should let the consumers know that their website is secure and that privacy
protection is a priority for the organisation (Strategic Direction, 2012). Companies
should strive to constantly improve their online services for consumers. A
sound service delivery will have great positive impacts on the experience of an
e-shopper (Ahmad, 2002). A study into online service quality showed that trust
is a critical factor which influenced the consumer's contentment. Thus, online
shops have to work towards becoming more reliable in terms of delivering
products on time, giving proper information, and most importantly,
making sure that shopping on their website is
completely safe and secure (Lee & Lin, 2005). Perception of Online Shopping The consumer's perception of their experience
while shopping online is also a factor to consider. When the consumer’s
experience exceeds their expectations, there is a high chance they will become
loyal towards that particular online shop. This satisfaction is based on a number
of features such as: how fulfilling the experience was, how smooth the
transaction was and the ease of interaction (Chen & Chang, 2003). The
shopper’s perception will also vary depending on what kind of product they are
looking to purchase. For instance, Klein (1998) said
that products which require searching before purchase
(such as books) will be different from products that are purchased through
experiences (such as clothes). Zhou et al (2007) also stated that the online
shoppers’ perception will vary depending on the type of product because the
risk factors are different for each (Liu & Forsythe, 2010). Some consumers
do not shop online because they perceive traditional shopping as being soothing
and fun. It improves their mood and turns into a social activity which they can
do with their friends (Liu et al., 2013). Other factors which may affect the
perception of online shoppers are: how exposed they are to the market, market
ambiguity and the position of competitors in the market (Gong et al., 2013).
Comparatively, generation Y is very attached to online shopping and spends
their time looking into and fantasising about online products. They are
attentive towards sales promotions and are influenced by celebrities when it
comes to fashion (Hill et al., 2013). A recent research found that almost half
of the respondents were spending a minimum of one hour every day on online
retail websites. It was also found then men’s fashion has led more men to
participate in online shopping (Lachman & Brett, 2013). Overall, consumers
are now freely accepting the concept of online shopping and this phenomenon is
continuously growing. However, it should also be noted that traditional
shopping is still equally relevant to the retailing business (Watson
et al., 2002).
Benefit
of online transaction
1.
Online
shoping more effective and save time because
online shop available 24
hours , it is easier for everyone to
shopping without having to leave home . In addition to shopping online can save
time because it can be done anytime and anywhere .
2.
The price comparison
shopping online allows you to save
costs for transportation
In addition , you can
also choose a variety of goods at wholesale prices and can choose the
appropriate price of your pocket .
3.
Easy
payment
Shopping at the mall or store offline
requires us to carry cash more or take time to withdraw cash at atm machine
because we do not know how the price offered without prior notice of appeal at
the same storefront prices from one store to another . Shopping online offers
the ease of payment . The banks have offered a transfer system using internet
banking or mobile banking . Or if they do not have two facilities before, we
simply go to the nearest atm to transfer funds from a transaction that has been
done on the online store . After payment is done we just need to confirm to the
online store and the goods will be delivered to your hand .
4. Providing seamless product
Online stores usually offer a wide selection of products . There you can find clothes for the entire family , jewelry , home and garden decoration products , and even personalized gifts for those very special people in your life . Even wider selection available at online shopping sites for buyers who are looking for computers , mobile phones and other electronics .
5. Collectibles
For the collectors or hobbyists certain goods , browsing to shop online is a quick way to get the goods you desire that is not offered at offline stores . Miscellaneous goods collection can be found on the Internet with just a search engine . Collection of goods in online store was more varied than in offline stores and will be plenty of options for you
Disadvantages of online transaction
1. The
lag time between shipment and payment
2. Do
not physically seen the items
3. Shippig
charges
4. Mobile
phones can be expensive
5. They
can damage your ear
6. Sometimes
the reception is poor in some areas, limiting your connectivity (you can't talk
underground or on planes).
7. People
use the phone while they are driving, and this can cause problems.
8. They can limit your face to face time with
friends and family
9. They
can get you in trouble at school
10. Can
be expensive
11. Can
be hard to find the right package
12. Can ruin the connection to the computer.
DISCUSION
This study provides a large and beneficial impact on
consumer intentions to online
transaction. In this study shows that factors affecting consumer goodwill gesture
to online transaction privacy, security, and trust. These results indicate that
the factors associated with privacy, security, and trust must be considered
properly. Increased privacy, security, and confidence in e-commerce
transactions on the business sector can be influential on consumer intentions
to transact online unruk which eventually increased in e-commerce users.
E-commerce transactions should also be tailored to the needs and the desire of
consumers so that e-commerce can develop optimally. From the results of this
study are also expected to provide input for businesses the e-commerce system
in order to focus on factors such as privacy, security, and confidence in
applying and developing the e-commerce transactions. This matter aims for e-commerce
transactions can develop optimally in Indonesia as an alternative to sale and
purchase transactions in addition to transactions conducted directly, In order
to achieve this goal, the company must find out what the
needs, desires and expectations of consumers. Implications
of the research should be done adlah as follows.
Variable Privacy
Based on this research, it is known that the privacy
variable has influence
intention significantly to online transaction and have
the positive values, so that if there is an increase in the privacy of the
variable, it will directly help improve the intent to online transaction. As
for the indicator for privacy variables, namely: Personal Information Shows Concern For The
Users,the legal protection of personal information and consumer information
awake.
Variable Security
Based on this research, it is known that the security
variables influence
significantly to the intention to transact online in
OLX.co.id, and has niali
positive so that when there is an increase in security
variables, directly
will help increase the intent to transact online in
OLX.co.id. As for
indicators for security variables are: security when
sending of personal information,security when personal information governanc
and sense of security that web have enough to technical capacity.
Variable Trust
Based on the findings, note that variables influence
trust
significantly to the intention to transact online in
OLX.co.id, and has niali
positive so that when there is an increase in the
privacy of the variable, it will directly
help improve the intent to transact online in
OLX.co.id. As for the indicator
for the variables of trust, namely:can fulfill promise,information
offered characteristically honest,can meet responsibilities and provides
consumers against insurance.
CONCLUSION
Based on the analysis and discussion of the that has been done , it can be concluded that the privacy , security , and trust stimulant effect on the intention of consumers to transact online. Therefore , it is in determining the strategy to sell online must pay attention to the privacy , security and consumer confidence so that consumers feel satisfied and become loyal customers of the products sold .
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