The Role of Social Class as Consumer-Oriented Online Purchasing Adoption

Cloudeth Almonte, Kim Carla Carino, Anther Dynne Manangod, Joanna Katrine Ocampo,
Sofiarose Anne Tapec and Roberto M Arguelles

MARKETING RESEARCH

We envision Saint Louis University as an excellent

missionary and transformative educational institution
zealous in theformation human resources who are
imbued with the Christian Spirit and who are creative,
competent and socially involved.

SCHOOL OF ACOUNTANCY AND BUSINESS MANAGEMENT

SAINT LOUIS UNIVERSITY

PHILIPPINES
ABSTRACT

There is no doubt that electronic commerce change brings about social change. Advances in
technology, is generally not equitably shared within society. According to the results of
MasterCard’s Online Shopping Behavior Study 2012 in 14 Asia Pacific countries. Dominating
the Philippine e-commerce landscape are local deals and promo websites, although the most
visited website is eBay (12.5%). It is followed by Sulit (10.1%), Metrodeal (7.2%), Cebu Pacific
(6.0%), Ensogo (5.5%), and Amazon (5.1%). 

Data was gathered by floating questionnaires to 200 respondents. In this research we use
innovation adoption theory with technology acceptance model and two other perspectives to
study how social class impacts perceptions of customers in using Internet as medium of
purchasing online.

Keyword: electronic commerce, adaptation, social class, online purchasing

INTRODUCTION

Electronic Commerce (EC or E-commerce) describes the process of buying, selling, transferring,
or exchanging products, services, or information via computer networks, including the Internet.
[H.T.Ong 2013] E Commerce benefits organizations by making national and international
markets more accessible and by lowering the cost of processing, distributing, and retrieving
information. (Rainer and Turban, 2009).

E-commerce will help customer to do transactions for the product or enquiry about any
product/services provided by a company anytime, anywhere from any location. They can do
transactions 24 hours of each seven days of a week. A customer can put review comments about
a product and can see what others are buying or see the review comments of other customers
before making a final buy. Customers can also have readily available information. A customer
can see the relevant detailed information within seconds rather than waiting for days or weeks.

The major benefit to society is the ability to easily and conveniently deliver information, services
and products to people in cities, rural areas, and developing countries (Rainer and Turban, 2009).
The use of consumer-oriented electronic commerce is an increasingly global phenomenon as
consumers’ worldwide turn to the Internet as a means for purchasing goods and services. [Straub
et al., 1997; Van Slyke et al., 2004] As of year 2013 over $1.22 Trillion increase on sales on
Global Ecommerce which means the growth of using the Internet as medium of purchasing
products and new trends in technology have facilitated the introduction of ecommerce and
promise to provide new ways of impacting and serving customers in the future.(Balasubramian,
Peterson and Jarvenpaa 2002; Reynolds 2000; Sivanad, Gesta and Sulep 2004) Conducting
transactions online is accepted widely by consumers nowadays but not all uses it. Many factors
are affecting this, such as the social class where consumers belong. Social class can have a
profound effect on consumer spending habits. Perhaps the most obvious effect is the level of
disposable income of each social class. Because of this factor consumers may be affected when
purchasing online.

Though e-commerce business is growing, several are still not using Internet as means of
purchasing goods and services. Surveys said that roughly 75million people are actively
purchasing online. It is important to know how social class affects the use of e-commerce. With
the use of innovation adoption perspective we are about to study whether social class affect
consumer-oriented e-commerce adoption.

Research of the Internet shopper has typically included demographic questions of age, education
and household income (Fram & Grandy, 1995). Over time the Internet buyer, once considered
the innovator or early adopter, has changed. While once young, professional males with higher
educational levels, incomes, tolerance for risk, social status and a lower dependence on the mass
media or the need to patronize established retail channels (Ernst & Young, 2001; Mahajan,
Muller & Bass, 1990), today’s Internet buyer shows a diversity of income and education (U. S.
Dept. of Commerce, 2003).

For Internet buyers, gender, marital status, residential location, age, education, and household
income were frequently found to be important predictors of Internet purchasing (Fram & Grady,
1997; Kunz, 1997; Mehta & Sivadas, 1995; Sultan & Henrichs, 2000). Sultan and Henrichs
(2000) reported that the consumer’s willingness to and preference for adopting the Internet as his
or her shopping medium was also positively related to income, household size, and
innovativeness. In 2000, women represented the major online holiday season buyer (Rainne,
2002; Sultan & Henrichs, 2000). According to a report by the Pew Research Center (2001), the
number of women
(58%) who bought online exceeded the number of men (42%) by 16%. Among the woman who
bought, 37% reported enjoying the experience “a lot” compared to only 17% of male shoppers
who enjoyed the experience “a lot”. Akhter (2002) indicated that more educated, younger, males,
and wealthier people in contrast to less educated, older, females, and less wealthier are more
likely to use the Internet for purchasing.

Factors influencing peoples’ online shopping attitude have been researched and documented in
the context of traditional consumer literature. A review of empirical studies in this area shows
that the Acceptance Model (Davis, 1989) is among the most popular theories used to explain
online shopping behavior (Limayem et al., 2003). For online buyers, social class is one
frequently found to be important predictors of online purchasing. (Fram & Grady 1997; Kunz
1997; Mehta & Sivanas, 1995; Sultan & Hendrichs, 2000) Also researchers had found that the
consumers’ willingness to and preference for adopting Internet as medium in purchasing was
positively related to social class which include income, household, innovative, etc.

Results of the study will affirm the compound relevance of social class in E-commerce adoption.
Also this study aims to signify that social class has both direct and indirect impacts on intention
in purchasing products online and also influences the intentions of consumers.

LITERATURE VIEWS

Social class and E-commerce

Factors influencing people’s online shopping attitude have been researched and documented in
the context of traditional consumer literature. A review of empirical studies in this area shows
that the theories of Reasoned Action(Fishbein and Ajzen, 1975) and Acceptance Model(Davis,
1989) are among the most popular theories used to explain online shopping behavior (Limayem
et al.,2003). Therefore, the theoretical framework of this study Delafrooz et al. 201is based on
this theories.

Consumers have different personalities, which may influence their perception and how they
perceive their online shopping behaviors (Wolfinbarger and Gilly, 2001). Consumers’
personalities that lead to different shopping behaviors can be classified in two main orientations,
that is, utilitarian and hedonic. According to previous studies, consumers’ characteristics and
goals have been found to influence their behaviors such as purchasing, revisiting intentions and
attitudes toward a website (Shwu-Ing, 2003; Wolfinbarger and Gilly, 2001).

If we focus on the demographic characteristics of the in-home shopper, in general, the higher the
level of education, income and occupation of the head of the household, the more favourable the
perception of non-store shopping [Cunningham and Cunningham 1973; Darian 1987; Gillett
1970; Mulhern 1997; Peterson et al. 1989; Reynolds 1974; Reynolds and Darden 1972; Wotruba
and Pribova 1995]. One of the most successful systems of direct sales is Internet. In relation to
the sociodemographic profile of the Internet shopper, the literature review reveals that system’s
main users are young men, with a high level of income and a university education [Brennan
2000; Dholakia and Usitalo 2002; Hoffman et al. 1995; Joines, Scherer and Scheufele 2003; Li et
al. 1999; Vrechopoulos, Siomkos and Doukidis 2001], however, this profile is changing and in
the United States is becoming like that of the average consumer to encompass all genders, ages
and social classes.

Yaminand Sinkovics [Yamin and Sinkovics 2006] point to the particular dangers connected with
over-reliance on digital media. They argue that by being close to customers but distant from
markets, companies may become susceptible to falling into a ‘virtuality trap’. Appropriate
relational governance mechanisms [see e.g. Wu et al. 2007] are considered necessary to reduce
the possibility of this virtuality trap. Boshoff [2007] suggests that with the Internet as a retailing
channel, distinctive service delivery and service quality criteria need to be developed. The study
by Lynch and Beck [2001] is particularly relevant in this respect. They point out that the rapid
growth of the internet created an exaggerated expectation that it would enable companies to
create a new, standardized mode of communication, one where ‘buyers would speak and be
comfortable with the same “electronic language”, regardless of region culture or class’ [Lynch
and Beck 2001]. However their empirical finding indicated that ‘even with increased electronic
interaction ‘people still need to feel culturally and contextually engaged with vendors, even
online’[Lynch and Beck 2001]. Later studies have confirmed these findings.

Technology Acceptance Model

In our research, we consider using the TAM (Technology Acceptance Model) in assessing
customers’ perceptions in using Internet as medium in purchasing their product. We had
considered one variable from TAM which is the perceived ease of use.

Technology Acceptance Model proposed by Davis (1989) in the MIS Quarterly. With thousands
of studies testing Technology Acceptance Model in the information system area, Technology
Acceptance Model is increasingly applied as a fitting theory for the information management
context.

Technology Acceptance Model is more appropriate to be applied in online contexts for several
advantages. First, Technology Acceptance Model is specific on information system usage for
applying the concepts of ease of use and usefulness. Besides, Technology Acceptance Model is
more parsimonious. Furthermore, Technology Acceptance Model is more robust in various
information system applications. In the Technology Acceptance Model, there are two
determinants including perceived ease of use and perceived usefulness. Perceived usefulness is
the degree to which an individual believes that using a particular information system or
information technology would enhance his or her job or life performance. Perceived ease of use
is the degree to which a person believes that using a particular information system or information
technology would be free of effort. (Chi, Li, Yi Li., 2011)

Perceived ease of use and perceived usefulness positively affect the attitudes toward an
information system; and further, positively affect the individuals’ intentions to use and the
acceptance of the information system. In addition, perceived ease of use positively affects the
perceived usefulness, and both of perceived ease of use and perceived usefulness are influenced
by external variable. (Chi, Li, Yi Li., 2011)

Up to date, many researchers added new variables based on the Technology Acceptance Model.
Agarwal and Prasad (1998a, 1998b) added the construct of compatibility in the Technology
Acceptance Model. Dishaw and Strong (1999) integrated Technology Acceptance Model with
Task-technology Fit. Agarwal and Karahanna (2000) added cognitive absorption, playfulness
and self-efficacy based on Technology Acceptance Model. Venkatesh and Davis (2000) added
subjective norms with Technology Acceptance Model. Chau and Hu (2002) integrated peer
Influence with Technology Acceptance Model. Chiu et al. (2005) added personal innovativeness
with Technology Acceptance Model. Gefen et al. (2003) and Wu and Chen (2005) added the
construct named trust with Technology Acceptance Model. Walczuch et al. (2007) and Lin et al.
(2007)integrated technology readiness with Technology Acceptance Model.Chen et al. (2009)
synthesized the essence of technology readiness, Technology Acceptance Model, and Theory of
Planned Behavior to propose an integrated model for understanding customers’ continued use of
self-service technologies. Lee (2009) united the Technology Acceptance Model with Theory of
Planned Behavior, perceived risk and perceived benefit to understand the adoption of internet
banking.

Technology Acceptance Model has been applied in various information technology and
information system areas. Moon and Kin (2001) extended the Technology Acceptance Model to
explain the users’ acceptance of World-Wide-Web context. Lin et al. (2007) extended
Technology Acceptance Model to clarity the e-stock users’ behavioral intention. Chen and Chen
(2009)reexamined the Technology Acceptance Model to understand the automotive telematics
users’ usage intention. Stern et al. (2008) proposed a revised Technology Acceptance Model to
investigatethe consumers’ acceptance of online auctions. Serenko et al. (2007) modified
Technology Acceptance Model to assess user acceptance of interface agents in daily work
applications. Chen et al. (2009)proposed an integrated model including Technology Acceptance
Model, Theory of Planned Behavior, and Technology Readiness to explain the users’ adoption of
self-service technologies. Muller-Seitz et al. (2009) use the Technology Acceptance Model with
security concern to understand customer acceptance of Radio Frequency Identification (RFID).
TAM has proven to be a useful theoretical model in helping to understand and explain use
behavior in the information system implementation. It has been tested in many empirical
researches and the tools used with the model have proven to be of quality and to yield
statistically reliable results. (Chi, Li, Yi Li., 2011)

Innovation Adoption Theory

We also used Innovation Adoption Theory as one theoretical basis for this research. We had
adopted the two variables of IAT which includes perceived relative advantage, and compatibility.
Innovation Adoption Theory is process by which individuals and groups make the decision to
adopt and reject an innovation. Customers perception of characterize of an innovation have a
strong influence on decisions in adopting innovation. Many researchers had used Innovation
Adoption Theory in their research which is related IT-innovations. This theory includes
perceived related advantage, complexity, compatibility, observability and triability. (Van Slyke,
Lou, Belangeer, Sridhar, 2010.) Result Demonstrability and Perceived image construct one of the
broader variable of Innovation Adoption Theory which is perceived observability.
There are two other variables which we had included in our research; these are perception on
trustworthiness and image. TAM framework introduced trust successfully in online shopping,
either as direct antecedent of purchase intention and as an antecedent of intention to transact,
perceived usefulness and perceived ease of use (Hallegate Nautel;) Trust of the customers to the
merchants in online purchase is important to consider because it can affect their perceptions in
purchasing their products. As defined by Van Slyke, perceived image is the degree to which
innovation is seen as enhancing an individual image, also influences customers’ retention to shop
online. That thinking leads us researchers to assess perceived image to have positive
relationships to use intention.
Framework Model and Hypotheses Development

For us to study our research we had developed a research model base shown in the figure below.

Hypotheses:

H1: Social Class has a positive impact on intentions to purchase goods and services online.

H2a: Social Class will have a positive impact with consumers’ perceptions of the relative advantage of e-
commerce.

H2b: Social Class will have a positive impact with consumers’ perceptions of the result demonstrability
of e-commerce.

H2c: Social Class will have a positive impact with consumers’ perceptions of the compatibility of e-
commerce
H2d: Social Class will have a positive impact with consumers’ perceptions of the ease of use of e-
commerce.

H2e: Social Class will have a positive impact with consumers’ perceptions of the image of e-commerce.

H2f: Social Class will have a positive impact with consumers’ trust in e-commerce merchants.

According to researchers, there are factors affecting the purchase of products. Demographics
such as age, gender, education and income impact the perception on purchase of customers
online. (Bigne, Ruiz, Sanz; 2005) Based from the study of Armstrong and Kotler (2000) a
person’s purchase choics are influence by four factors including perception. In general, the
higher the level of education, income and occupation of the head of the household, the more
favorable the perception of non-store shopping. (Cunningham and Cunningham 1973; Gillett
1970; Mulhem 1997; Peterson and Darden 1972; Wotruba and Pribora 1995) This leads us,
researchers to formulate our hypothesis:

H1. Social Class has a positive impact on intentions to purchase goods and services online.

Relative advantage is the degree to which an innovation is seen as being superior to its
predecessor according to Rogers. If customers believes that using Internet as medium in
purchasing products would enhance his or her life performance, they will see that it has a relative
advantage to them. Example would be, customers find IT innovations to have relative advantage
than those traditional way like in purchasing products. This leads to our next hypothesis:

H2a. Social Class will have a positive impact with consumers’ perception of the relative
advantage of ecommerce.

“Result Demonstrability is the degree to which the results of using an innovation are perceived
to be tangible.” (Chin and Gopal, 1995; Plouffe et al. 2000)

“Result Demonstrability is defined as the tangibility of the results of using innovation. (Moore
and Benbaat,” 1999. P 203)

As defined by different authors, it clearly states that result demonstrability should visibly
improve the quality or effectiveness of the customers purchase online. Example would be that it
is easier for the costumer to discuss it with others because it’s better than purchasing product
offline. Customers who use Internet as medium for their purchase of product consider results of
using it. We, researchers expect that customers from different social classes view ecommerce
having a higher demonstrability which leads us in forming the hypothesis:

H2b. Social Class will have a positive impact with consumers’ perception of the result
demonstrability of ecommerce.
Compatibility or the degree to which an innovation is compatible with existing values, beliefs,
experience and nee of adopters are thought to affect adoption decision. (Taylor, 1986; Moore and
Benbasat, 1991, Rogers, 1995; Van Slyke et al, 2000) For example, a individual place a high
social value on time management, an innovation that conserve time, such as online purchase is
consistent with valuing time and thus will be positively related to adoption. For that reasoning
we develop the hypothesis:

H2c. Social Class will have a positive impact with consumers’ perception of the compatibility
of ecommerce.

Gathering information (information systems) through internet that users perceive easier to use
and less complex will increase the likelihood of its adoption and usage (Teo et al. 1999). In
accordance with the classic TAM, it is hypothesized that the perceived ease of use will influence
usefulness because an easy to use information technology is more useful (Davis 1989; Davis et
211 1992). Social Class influence the ease of use of customers on e-commerce, for example, if
you are in the upper class you have clear understanding on purchasing online because you are
expose on technologies we have nowadays unlike if you are in the lower class, because you don’t
have a proper education you might not know about purchasing your products online. We think
that social class will impact ease of use of customers.

H2d. Social Class will have a positive impact with consumers’ perception of the ease of use of
e-commerce.

Perceived image or status has been included in studies of IT-based innovation adoption (Aqarwal
& Prasad, 1997, Van Slyke et al., 2002) although there has been little empirical support for its
relationship to use intentions. Some studies suggest perception of image-enhancing impacts of
innovation has an important role in the context of web-based ecommerce. Social class affects our
status in the society and how person is perceived in the society. An example would be if you are
in the upper class you are known to be well-educated and have a high income and other people
respect you. Researchers provide the hypothesis:

H2e. Social Class will have a positive impact with consumers’ perception of the image of
ecommerce.

Trust is important because it helps consumers overcome perceptions of uncertainty and risk and
engage in “trust-related behaviors” with Web-based vendors, such as sharing personal
information or making purchases. These perceptions may be especially salient when interacting
with an unfamiliar vendor. Thus, a particularly critical form of trust in e-commerce may be a
user’s initial trust in a Web vendor. (McKNIGHT, CHOUDHURY, AND KACMAR)

Relationships are more difficult to establish and maintain online, which may lead to lower trust
in web merchants.( Van Slyke, Lou, Belanger, Sridhar) The fact that prior purchase have a strong
effect on intention to purchase (Brown et. Al., 2003) or that simply the frequency of visiting a
site positively impact the propensity to buy (Moe & Fader, 2004) is another support of the idea
of the effect of trust on behavioral intention, since one major way of building trust is through real
interaction with the other part. The higher the customers’ trust the website, the less effort the
consumer has to scrutinize the details of the site to assess the benevolence of the merchant.

H2f. Social Class will have a positive impact with consumers’ perception of the trust of
ecommerce.