Impacts of Perceived Risk and Perceived Quality on Online Purchase Decisions of UK Customers - Research Paper Example

The questionnaire survey method is applied to collect primary data from the students of Northampton University, which are used in the research for ascertaining the effect of the three factors on online consumer behavior. The questions are analyzed with the help of the statistical tools, SPSS. Moreover, the discussion section is developed so as to link the literature with the findings of the research finally leading to a lucid conclusion. Recommendations are also provided based on the conclusion of the research.

Online shopping or electronic commerce has encountered tremendous growth in the recent few years due to the wide acceptance of consumers worldwide. Previously, online shopping was preferred and used by the business executives, however in recent years it is widely accepted by students and employees due to its convenience and increased number of options (Karakaya and Charlton, 2001). The potential global market has encouraged the rise in new e-commerce businesses and e-retailers. This is due to the growing demand for online shopping by consumers.

Hence, in this contemporary era, the internet has not only become the main medium of communication but it has also encouraged online shopping. These online retailers are observed to have gained enough profit due to the increasing sales amount in the last few years. Moreover, the sales of these online retailers are also expected to rise in the future as described in the figure below.From the figure provided above it can be stated that the online retail sales are expected to grow by 14.7% in 2014 and amount to £38.

3 billion in 2014, which is equivalent to 11% of the overall retail sales in the UK. This amount will rise to about £69.3 billion (18.4%) by 2019 according to the forecast made by Mintel (2014) (Refer to Figure 2). However, if the online retail industry surpasses this performance it is expected to read £82 billion by 2019. Moreover, if the industry encounters uncertainties recession, inflation, and a threat to technology then the amount may also decrease to £57 billion by 2019 (Mintel, 2014) (Refer to Figure 1).

It is observed that the annual growth in the online retail industry with respect to sales has remained high during 2013, which has defied the normal slowing growth rates. The increase in participation in online shopping is executed through smartphones and tablets. Hence, it can be signified that advanced technology such as tablets and smartphones has encouraged the growth of online shopping.