Journal of Business and Psychology

, Volume 22, Issue 1, pp 55–64 | Cite as

The Influence of Perceived Product Risk on Consumers’ e-Tailer Shopping Preference

  • Pradeep A. Korgaonkar
  • Eric J. Karson


Increasingly, retailers are combining Internet and store based operations to become “multi-channel” as they attempt to attract and retain customers. This study investigates how the type and level of perceived product risk (specifically economic and psychosocial risk) influence patronage preference for shopping from three types of e-tailers. The e-tailer formats studied are: pure play e-tailers (e.g.,, value-oriented store based e-tailers (e.g.,, and prestigious store based e-tailers (e.g., The hypotheses, based upon prior research in the area of perceived product risk, show that type and level of risk do matter. Further, e-tailers linked with prestigious stores have an advantage over both other e-tailer types. Results also show an interaction between perceived product risk and the e-tail format. Based on samples from the Northeast and Southeast USA, the results are found to be similar in these diverse regions, improving the generalizability of the findings.


Risk Internet e-Tailing Online shopping Store patronage 


  1. ABC News Poll. (2003). 2003 Holiday shopping season: More shoppers plan to go online. Retrieved November 23, 2005, from Spending.pdfGoogle Scholar
  2. Akaah, I. P., & Korgaonkar, P. K. (1988). Conjoint investigation of the relative importance of risk relievers in direct marketing. Journal of Advertising Research, 28(August/September), 38–44.Google Scholar
  3. Bauer, R. A. (1960). Consumer behavior as risk taking. In R. Hancock (Ed.), Dynamic marketing for a changing world: Proceedings of the 43rd conference (pp. 389–398). Chicago, IL: American Marketing Association.Google Scholar
  4. Benjamin, R., & Wigand, W. (1995). Electronic markets and virtual value chains on the information superhighway. Sloan Management Review, 36(Winter), 62–72.Google Scholar
  5. Bettman, J. R. (1973). Perceived risk and its components: A model and empirical test. Journal of Marketing Research, 19(May), 184–190.CrossRefGoogle Scholar
  6. Bhatnagar, A., Misra, S., & Rao, R. H. (2000). On risk, convenience, and internet shopping behavior. Communications of the ACM, 43(November), 98–105.CrossRefGoogle Scholar
  7. Bhattacherjee, A. (2000). Acceptance of e-commerce services: The case of electronic brokerages. IEEE Transactions on Systems, Man, and Cybernetics: Part A, 32(July), 411-420.CrossRefGoogle Scholar
  8. Cheskin Research and Studio Archtype/Sapient. (1999). E-commerce trust study. Retrieved from
  9. Cheung, C. M. K., & Lee, M. K. O. (2001). Trust in internet shopping: Instrument development and validation through classical and modern approaches. Journal of Global Information Management, 9(July–September), 23–36.Google Scholar
  10. Corbitt, B. J., Thanasanki, T., & Yi, H. (2003). Trust and e-commerce: A study of consumer perceptions. Electronic Commerce Research and Applications, 2(Autumn), 203–215.CrossRefGoogle Scholar
  11. Cox, D. F., & Rich, S. U. (1964). Perceived risk and consumer decision making—the case of telephone shopping. Journal of Marketing Research, 1(November), 32-39.CrossRefGoogle Scholar
  12. Darden, W. R. (1979). A patronage model of consumer behavior. In R. Stampfl, E. C. Hirschman (Eds.), Competitive structure in retail markets: The department store perspective (pp. 43–52) Chicago, IL: American Marketing Association.Google Scholar
  13. Derbaix, C. (1983). Perceived risk and risk relievers: An empirical investigation. Journal of Economic Psychology, 3(March), 19–38.CrossRefGoogle Scholar
  14. De Figueiredo, J. M. (2000). Finding sustainable profitability in electronic commerce. Sloan Management Review, 41(Summer), 41–52.Google Scholar
  15. Donthu, N., & Garcia, A. (1999). The internet shopper. Journal of Advertising Research, 39(May–June), 52–58.Google Scholar
  16. Dowling, G. R., & Staelin, R. (1994). A model of perceived risk and intended risk-handling activity. Journal of Consumer Research, 21(June), 119–135.CrossRefGoogle Scholar
  17. eMarketer. (2004). Internet users in the EU-15 who have ever purchased products and/or services online by country, September 2003, (March 1), Retrieved from
  18. Festervand, T. A., Snyder, D. R., & Tsalikis, J. D. (1986). Influence of catalog vs. store shopping and prior satisfaction on perceived risk. Academy of Marketing Science, 14(Winter), 28–36.CrossRefGoogle Scholar
  19. Forsythe, S. M., & Shi, B. (2003). Consumer patronage and risk perceptions in internet shopping. Journal of Business Research, 55(November), 867–875.CrossRefGoogle Scholar
  20. Girard, T. R. S., & P. K. Korgaonkar (2002). Influence of product class on preference for shopping on the internet. Journal of Computer-Mediated Communication, 8 (October), Retrieved from Scholar
  21. Grewal, D., Iyer, G. R., & Levy, M. (2004). Internet retailing: Enablers, limiters and market consequences. Journal of Business Research, 57(July), 703–713.CrossRefGoogle Scholar
  22. Ha, H. (2002). The effects of consumer risk perceptions on pre-purchase information in online auctions: Brand, word-of-mouth and customized information. Journal of Consumer Mediated Communication, 8(October), Retrieved from Scholar
  23. Higgins, M. (2004). Pop-up sales clerks: Web sites try the hard sell. The Wall Street Journal, (April 15) D1–D2.Google Scholar
  24. Hisrich, R. D., Dornoff, R. J., & Kernan, J. B. (1972). Perceived risk in store selection. Journal of Marketing Research, 9(November), 453–459.Google Scholar
  25. Jahng, J., Jain, H., & Ramamurthy, K. (2000). Effective design of electronic commerce environments: A proposed theory of congruence and an illustration. IEEE Transactions on Systems, Man, and Cybernetics: Part A, 30(July), 456–471.CrossRefGoogle Scholar
  26. Jarvenpaa, S. L., & Todd, P. A. (1996–97). Consumer reactions to electronic shopping on the world wide web. International Journal of Electronic Commerce, 1(Winter), 59–88.Google Scholar
  27. Jacoby, J., & Kaplan, L. B. (1972). The components of perceived risk. In M. Venkatesan (Ed.), Proceedings, 3rd annual conference association for consumer research (pp. 382–393). Chicago, IL: Association for Consumer Research.Google Scholar
  28. Jones, J. M., & Vijayasarathy, L. (1998). Internet consumer catalog shopping: Findings from an exploratory study and directions for future research. Journal of Internet Research: Electronic Networking Applications and Policy, 8(4), 322–330.CrossRefGoogle Scholar
  29. Kling, R., & Palmer, J. W. (1997). Electronic commerce in retailing: Differences across retail formats. The Information Society, 13(January–March), 75–91.Google Scholar
  30. Korgaonkar, P. K. (1982). Consumer preferences for catalog showrooms and discount stores: The moderating role of product risk. Journal of Retailing, 58(Fall), 76–88.Google Scholar
  31. Korgaonkar, P. K., & Moschis, G. P. (1989). The effects of perceived risk and social class on consumer preferences for distribution outlets. In P. Bloom, R. Winer, H. H. Kassarjian, D. L. Scammon, B. Weitz, R. Spekman, V. Mahajan & M. Levy (Eds.), American marketing association educators’ proceedings: Enhancing knowledge development in marketing (pp. 39–43). Chicago: AMA.Google Scholar
  32. Korgaonkar, P. K., & Wolin, L. D. (1999). A multivariate analysis of web usage. Journal of Advertising Research, 39(March/April), 53–68.Google Scholar
  33. Liebermann, Y., & Stashevsky, S. (2002). Perceived risk as barriers to internet and e-commerce usage. Qualitative Market Research, 5(November), 291–300.Google Scholar
  34. Mayer, R. C., Davis, J. H., & Schoorman, D. F. (1995). An integrative model of organizational trust. Academy of Management Review, 20(July), 709–734.CrossRefGoogle Scholar
  35. Mitchell, V. (1999). Consumer perceived risk: Conceptualizations and models. European Journal of Marketing, 33½., 163–195.CrossRefGoogle Scholar
  36. Miyazaki, A. D., & Fernandez, A. (2001). Consumer perceptions of privacy and security risks for online shopping. The Journal of Consumer Affairs, 35(Summer), 27–44.Google Scholar
  37. Pastore, M. (2001). Half of American adults now shop online, (April 24), Retrieved from
  38. Perry, M., & Hamm, C. (1969). Canonical analysis of relations between socio-economic risk and personal influence in purchase decision. Journal of Marketing Research, 6(August), 351–354.CrossRefGoogle Scholar
  39. Peter, J. P., & Tarpey, Sr. L. X. (1975). A comparative analysis of three consumer strategies. Journal of Consumer Research, 2(June), 29–38.CrossRefGoogle Scholar
  40. Peterson, R. T., Balasubramanian, S., & Bronnenberg, B. J. (1997). Exploring the implications of the internet for consumer marketing. Journal of the Academy of Marketing Science, 25(Fall), 329–346.CrossRefGoogle Scholar
  41. Prasad, K. V. (1975). Socioeconomic product risk and patronage preferences of retail shoppers. Journal of Marketing, 39(July), 42–47.CrossRefGoogle Scholar
  42. Roselius, R. (1971). Consumer rankings of risk reduction methods. Journal of Marketing, 35(January), 56–61.CrossRefGoogle Scholar
  43. Rosen, K. T., & Howard, A. L. (2000). E-retail: Gold rush or fool’s gold? California Management Review, 42(Spring), 72–100.Google Scholar
  44. Sheth, J. N. (1983). An integrative theory of patronage preference and behavior. In W. R. Darden & R. F. Lusch (Eds.), Patronage behavior and retail management (pp. 9–28). North-Holland, NY, NY: Elsevier Science Publicator Company.Google Scholar
  45. Shimp, T. A., & Bearden, W. O. (1982). Warranty and other extrinsic cue effects on consumers’ risk perceptions. Journal of Consumer Research, 9(June), 938–946.Google Scholar
  46. Spence, H. E., Engle, J. F., & Blackwell, R. D. (1970). Perceived risk in mail-order and retail store buying. Journal of Marketing Research, 8(August), 364–369.CrossRefGoogle Scholar
  47. Stone, R. N., & Gronhaug, K. (1993). Perceived risk: Further considerations for the marketing discipline. European Journal of Marketing, 27(3), 372–394.CrossRefGoogle Scholar
  48. Tan, S. J. (1999). Strategies for reducing consumers’ risk aversion in internet shopping. The Journal of Consumer Marketing, 16(2), 163–180.CrossRefGoogle Scholar
  49. U.S Census Bureau, Retail 3Q. (2003). E-commerce report (November 21).Google Scholar
  50. White, J. D., & Truly, E. L. (1989). Price-quality integration in warranty premium evaluation: A preliminary test of alternative models of risk assessment. Journal of Business Research, 19(September), 109–125.CrossRefGoogle Scholar

Copyright information

© Springer Science + Business Media, LLC 2007

Authors and Affiliations

  1. 1.College of BusinessFlorida Atlantic UniversityFort LauderdaleUSA
  2. 2.Department of Marketing, Villanova School of BusinessVillanova UniversityVillanovaUSA

Personalised recommendations