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Available literature demonstrates that the adoption and use of e-commerce can provide businesses with a multiplicity of benefits that allow them to reach more customers, reduce costs, and enhance productivity (Chang, Magobe, & Kim, 2014).
Additionally, the use of e-commerce solutions in the business domain has been associated with enhanced flexibility as well as faster time-to-market and speed-to-market capabilities in the increasingly competitive environment (Demirkan, 2015). However, despite all these benefits, the adoption and use of e-commerce have lagged behind in some contexts and countries due to a variety of reasons embedded in structural and technological barriers, customer perceptions and preferences, as well as lack of awareness (Goswami, 2012). The present paper looks into the topic of e-commerce adoption with the view to delineating customer-specific barriers that hinder optimal use and outlining what needs to be done to address the challenges.
E-Commerce and Adoption Barriers
E-commerce has been defined in the literature as “any economic or business activity that uses information communication technology (ICT)-based applications in its transactions” (Chang et al., 2014, p. 53).
Although most of the transactions revolve around marketing, selling, and buying over the Internet, e-commerce can be used in business-to-business (B2B) and business-to-customer (B2C) contexts to share data and information, conduct marketing research, undertake communication activities and retain customers (Goswami, 2012). E-commerce provides businesses with the leverage to use low-cost information delivery avenues to enhance their performance, improve coordination of activities with business partners, reduce operation costs, increase inventory efficiency, and expand markets across borders (Chang et al., 2014).
However, it is evident that many businesses in the developing world are yet to obtain these benefits due to low adoption and use levels. Available literature shows that “the effect of new technology on firm performance depends on the extent to which the technology is used in the organization’s key value chain” (Chang et al., 2014, p. 56). As such, it is difficult for businesses to reap maximum benefits from the use of e-commerce solutions if adoption and use levels remain low. Using the learning curve theory, it can be argued that most customers in developing countries are yet to learn and internalize the immense benefits of e-commerce, leading to projected behaviors of aloofness and uncertainty in the online environment (Goswami, 2012).
One of the customer-specific barriers to e-commerce adoption relates to the fact that many individuals are yet to realize the immense benefits associated with e-commerce applications, and are therefore unwilling to take the risk of transacting over the Internet (Mirmiran & Shams, 2014). For example, many people in developing countries are yet to realize that conducting banking transactions over the Internet is more cost-effective and time-saving than visiting their local bank branches to transact. As demonstrated in the literature, having the knowledge of perceived benefits has a positive effect on the scope of e-commerce adoption and use, implying that more people are likely to use e-commerce platforms if they understand the benefits involved (Chang et al., 2014).
Another e-commerce adoption barrier relates to confidentiality and security concerns, where customers desist from using online communications for fear of losing critical personal information or finances (Mirmiran & Shams, 2014). For example, although it is easier and convenient to use the PayPal service to receive global financial transfers, many people are yet to buy this proposition for fear of losing their hard-earned cash to fraudsters. Consumer characteristics (e.g., gender, age, income, and educational level) have also been documented as a major barrier to the adoption and use of e-commerce (Goswami, 2012).
Here, researchers have noted that young and highly educated people are more likely to use e-commerce applications than the elderly and less educated (Mirmiran & Shams, 2014). Additionally, it is clear that the adoption of e-commerce is related to the level of disposable income among the population, implying that economically stable people are more likely to adopt and use e-commerce than poor individuals (Goswami, 2012). Lastly, it is evident that a substantial number of customers are not satisfied with initial online shopping experiences due to technical issues and other structural or relational concerns (Mirmiran & Shams, 2014).
Addressing the Barriers
Businesses using e-commerce platforms need to undertake comprehensive marketing campaigns to create awareness of the benefits associated with the use of online applications to transact business. Such marketing initiatives need to convey information about the security of online transactions to allay fears that limit the adoption and use of e-commerce. It is also possible for governments in the developing world to address some of the barriers related to consumer demographic characteristics by not only developing policies that encourage the elderly to use e-commerce applications but also ensuring equitable distribution of resources to address high poverty levels (Mirmiran & Shams, 2014).
Lastly, organizations need to ensure that they develop intuitive, responsive, and customer-friendly Web applications to minimize unwanted experiences and, in turn, enhance customer satisfaction levels.
This paper has discussed e-commerce, with a focus on identifying customer-specific adoption challenges and outlining some of the ways that could be used to address the issues. Overall, it is evident the e-commerce has immense benefits for customers and businesses alike, though optimal advantages are not being realized by both parties due to the discussed challenges. As such, it is important to use the challenges espoused in this paper to address the challenges and hence encourage e-commerce adoption and use in contemporary business contexts.
Chang, B.Y., Magobe, M.J., & Kim, Y.B. (2014). E-commerce applications in the tourism industry: A Tanzania case study. South African Journal of Business Management, 46(4), 53-63.
Demirkan, H. (2015). Special section: Enhancing e-commerce outcomes with IT service innovations. International Journal of Electronic Commerce, 19(3), 2-6.
Goswami, S. (2012). Measuring impact of consumer and product features on e-commerce adoption in India: An empirical study. XIMB Journal of Management, 11(2), 81-94.
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Mirmiran, S.F., & Shams, A. (2014). The study of differences between e-commerce impacts on developed countries and developing countries, case study: USA and Iran. New Marketing Research Journal, 5(3), 79-100.