Bulletin, December/January 2006


Clicking Instead of Walking: Consumers Searching for Information in the Electronic Marketplace

by Kuan-Pin Chiang

Kuan-Pin Chiang is an assistant professor of marketing, School of Business, Long Island University, 1 University Plaza, Brooklyn, NY 11201. He can be reached by phone at 718-488-1147 or email at kuan.chiang at liu.edu.

In theory the Web provides vast possibilities for information search and comparisons unconstrained by time and place, which have traditionally restricted consumer search behavior in the physical marketplace. Because of this reduction of search costs, studies have taken the economic perspective in analyzing the efficiency of the electronic market (for example, Brynjolfsson & Smith, 2000) and implications for consumers searching for information online (for example, Hoque & Lohse, 1999; Wu, Ray, Geng & Whinston, 2004). Although none have yet focused strictly on paid search, the implications are probably transferable.

This article looks at surveys that compare search cost between online and physical environments. Additionally, using search pages resembling Yahoo! paid search result pages in online experiments, we studied the effects of personal and system factors on the number of websites visited and time spent per site.

Several reasons suggest that conventional economic theories do not adequately explain consumer online search behavior. First, the fundamental premise of economic theory is that the amount of information search will increase when search costs are reduced. Empirical evidence, however, has not shown such behavior with online shopping. For example, by examining the shopping patterns of online users over time, Johnson et al. (2004) found that the amount of online search is actually quite limited. On average, households visit only 1.2 book sites, 1.3 CD sites and 1.8 travel sites during a month in each product category. Another study by Jansen et al. (2000) revealed a similar pattern from the analysis of logs containing 51,473 queries posed by 18,113 Excite users. The results show that Web queries are short. Most users had only a few queries per search, and 76% of users did not go beyond their first and only query.

Second, it is cognitive, not physical effort that affects consumers searching for information online. Although physical efforts such as going to stores have been reduced to finger clicks, it is possible that cognitive challenges of interacting with computers and online information exist that potentially limit consumer information search in the electronic marketplace.

In addition, the Internet has transformed consumer behavior in two ways: (1) by transforming consumers into online shoppers requiring the use of computers and (2) by transforming physical stores into an online market space that is information technology intensive. In order to understand consumer online search behavior, it is necessary to include the interaction between the combined roles of consumer/computer user and the information technology provided by the online stores. These factors impose certain search costs on consumers and influence their online search behavior.

Information Search

Information search is a stage of the decision making process in which consumers actively collect and utilize information from internal and/or external sources to make better purchase decisions. Internal search occurs when consumers access information previously stored in memory. It is the primary source used for habitual and limited decision-making. On the other hand, external search, which is the focus of this article, involves searching for information from sources outside of memory because the required information was not previously acquired or cannot be recalled from memory. To facilitate their decision-making, consumers often utilize sources such as friends, advertisements and magazines like Consumer Reports. Lately, the Internet has joined other traditional media and become a major source of information for many products and services for consumers because of its abundance of information and convenience.

To explain information search, the economics of information identifies two types of search costs that influence information search – external and cognitive. The costs of resources consumers invest in search, such as monetary costs to acquire information or opportunity costs of time during acquisitions, are external search costs. Such costs are influenced by factors beyond consumers’ direct control. They are exogenous and depend on situational influences. On the other hand, cognitive search costs are internal to the consumer and reflect the cognitive effort consumers must engage in to direct search inquiries, sort incoming information and integrate it with stored information to form decision evaluations. These costs are influenced by consumers’ ability to cognitively process incoming information.

In the electronic marketplace, external search costs have been significantly reduced to finger clicks. However, information in such an environment is highly visual and perceptual. It increases cognitive search costs that affect consumers’ search for information. In addition, information search online is characterized by human-computer interaction requiring consumers' ability and knowledge to acquire information (Hodkison et al., 2000). In order to search online, consumers must not only be able to locate the websites of interest and move between sites but also to acquire information within the sites. There are several ways to identify the location of websites: (1) via search engine, (2) via manual entry of a URL and (3) via the memory aid of a browser such as bookmarks. Given the vast amount of information available on the Internet, these search techniques will affect consumer information search. As a result, the Internet imposes a certain degree of cognitive search cost on consumers that could potentially prevent consumers from searching for more information.

Effects of Personal and System Factors

From the consumer perspective, the Internet has changed the relationship between buyers and sellers because of the unprecedented increase in the number of choices and levels of control over the message. It has also changed the decision-making environment by the amount, type and format of information available to consumers because it provides tools for information storage, for information search and for decision analysis. Tools such as bookmarks, search engines and decision aids such as shopbots are likely to influence consumer’s information search behavior. Personal factors such as domain (ability to identify information in the product category) and system expertise (skill in using computers and the World Wide Web for information search) as well as system factors such as information load and interruptions impose certain search costs on consumers and influence online information search.

Analysis and Results

In order to explore specific actions of online shoppers, we constructed a custom Web browser designed to emulate the look and feel of Microsoft Internet Explorer. This custom Web browser included five basic control buttons - Back, Forward, Stop, Refresh and Home - necessary for navigation on the Internet. The URL address bar was removed from the custom Web browser in order to maintain some degree of control over the experiments. Embedded in the custom browser was a computer program that provided the functions necessary for experimental control and data collection. Each participant was given a task scenario regarding shopping for a digital camera starting from the Yahoo! homepage. Participants were instructed to enter a keyword related to the task and a search result page was displayed with experimental conditions.

Results from surveys show two different perceptions of search costs between the physical and online environments. In an online environment, perceived external search cost is lower and perceived cognitive search cost is higher. Results from online experiments show participants with a lower level of domain expertise perceive greater cognitive search cost online. They visited fewer websites and spent more time at each site than those with a higher level of domain expertise. Moreover, participants with a higher level of system expertise visited more websites than those with a lower level. Overall, these findings suggest that although physical efforts have been reduced to finger clicks, the cognitive challenge of interacting with computers and online information limits consumer information search in electronic marketplace.

Conclusion

The online market offers consumers vast opportunities because it reduces physical efforts of information search and provides access to a large amount of information and choices. What may have been substituted, however, is the cognitive effort required by the consumers to interact with computers. This effort may prevent consumers from taking advantage of the opportunities to search for more information.

There are several unique characteristics of the Internet that make it a fruitful environment in which to study search behavior. Its rapid growth makes it a vibrant marketplace that competes with all other conventional channels. As the Internet evolves, consumers’ online search behavior will also change. The implications for consumers in terms of availability of information, access to greater numbers and sources of product information, and privacy and security issues, to name a few, will require continued attention and investigation.

Additional opportunities to examine information search also include personal and computer system variables, effects of website position on a Web page and "location" of the site in the cyberspace, and the use of a custom browsers to better understand the dynamic and complex process of information search in electronic marketplace.

For Further Reading

Brynjolfsson, E., & Smith, M. D. (2000,). Frictionless commerce? A comparison of Internet and conventional retailers. Management Science 46, 563-585.

Hodkison, C., Kiel , G. & McColl-Kennedy, J. R. (2000). Consumer Web search behavior: Disgrammatic illustration of wayfinding on the Web. International Journal of Human-Computer Studies, 52, 805-830.

Hoque, A. Y., & Lohse, G. L. (1999). An information search cost perspective for designing interfaces for electronic commerce. Journal of Marketing Research, 36, 387-394.

Jansen, B. J., Spink, A., & Saracevic, T. (2000). Real life, real users, and real needs: A study and analysis of user queries on the Web. Information Processing and Management, 36, 207-227.

Johnson, E. J., Moe, W., Fader, P., Steven, B., & Lohse, J. (2004). On the depth and dynamics of online search behavior. Management Science, 50, 299-308.

Wu, D., Ray, G., Geng, X., & Whinston, A. (2004). Implications of reduced search cost and free riding in e-commerce. Marketing Science, 23, 255-262.