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The extent to which privacy and security affect on consumer behavior during shopping online Essay Example

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The extent to which privacy and security affect on consumer behavior during shopping online


Today the online shopping is increasing rapidly changing the business environment. With tight schedule and advancement, people have made it a habit to purchase just from where they are provided they can access the internet. As such, the situation has become convenient and less expensive compared to directly buying from the company. Even though, online shopping has increased speed of purchase, security and privacy issues are some of the reasons hinder online purchasing. This paper defines security and privacy based on online shopping and analyses the extent to which privacy and security affect on consumer behavior when shopping online especially technologically.


As the 21st century rolls on, technology is changing the business environment rapidly while increasing competition among the organization. In fact, it is considered that business that does not adopt technology in this is likely to be driven out of the market. Internet technologies have created in a new delivery channels and electronic transactions are growing fast (Nazir, 2012, p.486). In fact the report of 2012 by internet world stats shown that there are 2.3 billion internet surfers in the world (Internet world Stats, 2012). In 2001, the online sales posted a revenue of $48.3bn, signifying a yearly rate of growth 45.9 %, (Huang, Schrank& Dubinsky, 2004, p.40). With the increase of internet usage, the need to satisfy customers has increased; it is not just about the quality of products the organization offers but also the quality of service they provide in regards to privacy and security. Majority of the individuals who use the internet technologies to buy products online are still reluctant due to privacy and security. As such, this essay discusses the extent to which privacy and security affect on consumer behavior during shopping online. The essay will argue that privacy and security issues reduce confidence, influences consumer perception, and reduce trust on e-mails and credit cards.


Consumer definition could difficult to define in a single entity but has several dimensions in which it can be described. Tsai et al. (2011, p.255) described 4 dimensions of customer privacy issues including collection of individual information, illegal secondary application of private information, errors in individual information, and inappropriate access to someone’s personal information. In online shopping, these frameworks of challenges have been understood to refer to sets of individual information, restriction over the utilization of private data, and understanding of practices concerning privacy and how individual information can be used (Tsai et al. (2011, p.255). On the other hand, security is described as the data protection against intentional or accidental disclosure to any unauthorized individuals, or illegal destruction or modifications (Godwin, 2001, p. 165).

Privacy and security issues reduces consumer confidence and willingness during shopping online

Customers’ information privacy and security for online purchase is a crucial concern of decision making for buying. Majority of Americans think that their right to privacy remains “under serious threat”, and utter concern with organizations which gather their private data (Tsai et al. 2011, p.254). Based on surveys, such challenges affect customers’ confidence and willingness to buy online and even to register with websites. Lack of confidence is created by a situation where hackers are able to phish their information while the organization is powerless to help sort the mess. Organizations tackle these privacy challenges by posting the privacy policies (Tsai et al. 2011, p.254) so as to express the organization information practices. However, 70 percent of individual surveyed differed with the statement which claims that “privacy policies are simple to comprehend”, and few individuals make efforts to read the privacy policies (Tsai et al. 2011, p.254). Equally, empirical proof advocates that customers do not completely comprehend meaning of privacy seal (Tsai et al2011, p.254). Various researches have also shown that most individuals are keen to put aside privacy problems, offering personal information for small incentives. A 2005 research carried out by Privacy & American Business, for example, established that problems concerning the utilization of private information had 64 percent of participants from shopping from an organization, while 67 percent of participants refused to register with a website which offers online shopping since they established the privacy guidelines to be complicated or imprecise (Tsai et al. 2011, p.255). Some of the issues that discourage consumer and changes their attitude towards online shopping is that their personal information is collected or phished by the website of cyber criminals. The USA Federal Trade Commission report of 1999 (1999a), claims that information is collected online both directly and indirectly (Godwin, 2001, p.166). When a consumer gets into a chat room talk, he or she places the message on the bulletin board, then registers into that commercial website, orders goods, he or she knowingly and directly sends information into the cyberspace. That report further claims that the data can be collected indirectly without the knowledge of the consumer. For instance, a consumer’s surfer around a Website is tracked by a component referred to as a «cookie’’ left on hard drive of a computer on the consumer’s first visit of that page. Since the Website collect information or data directly and indirectly, it can build up a complete information picture of a person and his or her family (Godwin 2001, p.166). Internet surfers desire to feel their privacy is safeguarded. A privacy professional greatly recommends government intervention, whilst business managers are advocating for self-regulation (Godwin, 2001, p.166). Presenting customers with information regarding how their private data are utilized and looking at the possibilities of providing customers privacy preference are amongst the concerns they think must be tackled. According to Godwin (2001, p.167) The US federal management has been proposing self-regulation policy as oppose to government regulation.

Privacy and security influences consumer perception

As mentioned earlier, consumer perception about security and privacy play a big role on whether the consumer will purchase only. Perception extends to the customer services, website design and security information. Yao & Jong, 2010, p.4065) argued that privacy and security over the Internet or sites ought to be a concern between consumers and organization management, since majority of the consumers are only keen to trust websites that disclose personal information. Yao & Jong (2010 p.4065) argue that several research have demonstrated that perceived effectiveness influences whether or not consumers will apply technology. Effective quality service is utilized to measure the precision and excellence of the services which online customers get. Previous researchers have claimed that consumers’ perceived effectiveness of products is associated with the online service quality that proves the significance of network services. Several scholars think that perceived simplicity of use coming up from a well-developed website makes customers to have confidence (Yao & Jong, 2010, p.4060). The visual design of the website will influence customers’ willingness to surf through and shop from it. If its design is very ordinary, it cannot attract consumers, a situation that will make sure they register their personal information. Yao & Jong. Yao & Jong (2010, p.4060) claim that website appeal has a major relationship with consumers’ perceived risk of information privacy, security and intention to purchase. A number of scholars have studied whether perceived simplicity of website use has a major influence on intention to buy, whether indirect or direct (Yao & Jong, 2010, p.4060). the outcomes shows that consumers get into the process of online shopping owing to a design style of the website, and risk perceived of information privacy and security considerations goes up when website design is not visually pleasing, therefore, sites cannot draw consumers. Yao& Jong (2010, p.4060) established that perceived easiness of use considerably influences consumer adaptation intentions. From a different perspective, Yao& Jong (2010, p.4060) argue those web visual influence online surfers’ feelings towards a site, which further influence their intention to purchase. Yao& Jong (2010, p.4060) stated that a well-developed website raises positive perception of a consumer towards a website, reducing perceived risk of security information, and a surfer having a positive perception will probably become a purchaser. Perception on brand name also plays in consumer placing the order. Strong brand name is perceived not to be risky as compared to weak brands. Debatably, brand name can efficiently reduce customers’ uncertainty concerning their perception of risk and product quality and regarding their purchase decisions in usual shopping places (Huang, Schrank & Dubinsky, 2004, p.44).

Privacy and security affects consumer trust on e-mails and credit cards

Another issue that has led to reluctant of consumer towards online shopping is the insecurity and inadequate privacy the email accounts. Current and in the past, communication has grown over e-mail. Today, an e-mail account is not just for communication but plays a key role when registering with the commercial websites. Therefore, most cyber criminals and hackers targets email accounts for consumer information. E-mail privacy and security has become an issue of substantial debate (Godwin, 2001, p. 167). In spite of new advancements in the encryption and even with the new legislation, privacy of the e-mail has shown to be of key challenge to the consumers. In the recent past, there has been an increasing issue over the noticeable rise in the unsolicited e-mail which is normally referred to as spam or junk e-mail. This practice of distribution of spam ads has turned out to be more common and also a security threat to many consumers. According to Godwin (2001, p. 167) organizations are more and more embracing policies that tackle e-mail privacy issues. There are also the concerns of credit security which make some consumers reluctant to adopt online shopping. Even though, much of the hype concerning Internet security has concentrated on the possible risks to customers who use their credit cards to purchase online, payment scam is also a key threat to Internet-based businesses. Non-creditworthy or fraudulent orders represent up to one-sixth of every attempted buying on the websites (Godwin, 2001, p. 167). Security threats do not just comprise of technology disturbance and break-ins, but also impersonation, identity theft and a stalking, are serious concerns that every consumer and business owners should be worried about (Godwin, 2001, p. 167) hacking of computer is another major problem. Computer hacking could be either a kind or a malicious action. Commercial organizations and governments are putting a large sum of money in developing secured techniques of data transferring. With secured websites, customers can trust credit card information and rely on details sent in the encrypted form.


From the look of things, technology has led the businesses to a new step of online shopping, and there is no point of return. Competition is now led through technology; that is the level of customer service and satisfaction. As such, managers have the responsibility to provide quality products, in a manner that is secure to the customer perception.
For this to take place manager concerned with online shopping has to focus on network security technologies like virtual private networks, firewalls, virus prevention techniques and intrusion detection systems to support online security.


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