Researchers now predict that in US alone, over $ 523 billion will be used on online shopping (total sales) annually by 2020, representing a 56% increase from the $335 billion recorded in 2015. This is an era when online shopping is gradually becoming the norm and increasingly replacing the traditional form of store-based shopping. Unfortunately, an increase of online shopping is simultaneously prompting the increase of random purchases. The budgeting process is gradually losing its effect on modern shopping, and most people often remember a budget limit after making an online purchase. It used to take time, effort, and careful planning for people to buy even the most basic of their products and services, thus reducing the expenditure to a level that can be matched by income generation. Spending time before making a purchase often increased consideration of ways to increase savings and helped avoid unnecessary expenses.
Today unfortunately, similar goods and services not only lack the physical comparison with competing alternatives, but they can also be purchased with a single click. The immediacy of making a purchase omits careful consideration and budgeting. Today, almost anything is available within an instant, and the only possible delay is when it is being shipped from and to any global jurisdiction.
Without budgeting, contemporary online purchases are characterized by:
- Excessive expenditure/spending
- Absence of comparative review of competing products/services
- Short-term considerations of otherwise temporal needs
- Increment of instantaneous needs
- Lack of adequate appraisal of product/service features in comparison to need
- Lack of financial foresight to increase savings for every purchase
The biggest loss experienced from modern online shopping, therefore, is the savings account where, without reliable budgeting, expenditure can and often does outweigh the income. If the World Wide Web is only starting what will be its phenomenal and greatest growth phase, then it is only wise to advance your consumption behaviors and tendencies. The article purposed to reviews the three most essential strategies, all synthesized from a comprehensive critical review of contemporary literature, and backed by numerous scientific and empirically credible research studies conducted by highly-esteemed scholars and researchers. As such, using the three strategic steps below, generated by based recent empirical research studies across the globe, can nonetheless help you increase your savings even when shopping online.
3 Research-Based Initiatives to Increase Savings during Online Shopping
1. Exploiting Cost-Saving Avenues
Economic professors from London and Washington DC conducted a study in London posing the question of how “consumers save” during shopping, as part of the “consumer shopping behavior” (Griffith et al., 2009, p. 99). In the study, as published by the Journal of Economic Perspectives, Griffith, Leibtag, Leicester, and Nevo (2009) observed how little modern consumers consider ways to save when shopping, such that the “potential and actual savings” is often decimal (p. 100). The study highlighted ways in which modern consumers can and should save on their shopping cost, including:
- Strategically determining when to buy and how much to buy to save overall costs
- Buying products in bulk, which provides lower price per unit bought
- Purchasing outlets that reduce transport costs
- Exploiting seasonal quantity discounts for specific services of products
- Watching out for temporary price reductions, particularly among companies that offer reward programs for their customers
These same findings accrue in online shopping and can therefore help you acquire significant savings. For example, you can opt to purchase a service/product using coupons and promotion codes, which reduces your checkout costs. Other opportunities to increase savings during online shopping includes exploiting free shipping offers, although it is important to determine the credibility of such offers, but the use of cost savings avenues has been established by many other empirical studies. Example of studies include Deaton (1998) on “getting the price right” (p. 37), Seock and Norton (2007) on “channel choices for purchasing: (p. 571), Katawetawaraks and Wang (2011) on influences of “online shopping decision” (p. 66), Rudansky-Kloppers (2014) on “factors influencing customer online buying” (p. 1187), and Yu and Wu (2007), on the “determinants of internet shopping behavior” (p. 744). All these empirical studies agree that using strategic measures/avenues to save cost while purchasing online can aggregate to immense savings for you every time you shop online.
2. Overcoming Behavioral Uncertainty
A research study published in the first issue of the International Journal of Internet Marketing and Advertising applied the Transaction Cost Economics theory to analyze the shopping behavior of Chinese consumers. The study was commissioned by the School of Business in the National University of Singapore. Following the study, Teo, Wang, and Leong (2004), concluded that, consumers’ online shopping behavior is characterized by six unique and distinctive antecedents, among which were:
- Convenience (to be explored hereafter as studied in India by Ganapathi in 2015)
- Economic utility of product/service consequent of short-term considerations when purchasing otherwise temporal needs (as explained in the introduction above)
- Product uncertainty due to the absence of comparative review of competing products/services as well as increment of instantaneous needs (as explained in the introduction above)
- Behavioral uncertainty among consumers (important for the present discussion)
With over 198 million consumers in the US shopping online in the first three months of 2014, online shopping is slowly becoming the only way people shop globally. Teo, Wang, and Leong (2004) established that, based on the theory of Transaction Cost Economics, online shopping triggered behavioral uncertainty among the Chinese consumers since purchasing decisions were not organized, strategically predictive, or justified by valuation. Rather, the decisions were based on momentary appeal of the products/services being offered. It is therefore critically essential that all your online purchases are deliberate, strategic, value-based, and are strategically founded on the economic utility of whatever you purchase. Only then will you aggregate the occasional, yet avoidable, whims of purchases into considerable savings.
3. Avoiding Self-Serving Convenience and Random Purchases
The digital age has come with an outstanding level of laziness and passiveness among consumers. Focusing on Indian consumers in Chennai, Ganapathi (2015) recently investigated how consumers in Chennai city behave during online shopping. Importantly, the Assistance Professor identified the factors that significantly influence these shoppers’ behaviors. According to the study, regression analysis indicates a significant relation between online shopping behavior and convenience, where the little purchasing decisions are often pegged on what is most convenient for the consumer.
The findings reported by Ganapathi (2015) concur with those reported by other scholars and researchers across the globe, including Teo, Wang, and Leong (2004) in China, Rudansky-Kloppers, S. (2014) in South Africa, Andrew and Vanitha (2004) in the USA, as well as Bulter and Peppard (1998) in the UK, among many others. As such, the first step to increase your savings is to ensure that your purchases are shaped by what you need, and the best available for their price range, and not what is more convenient to you. After all, you will never be obligated to shop for anything, at any time, and at any online shop. It is your personal and deliberate decision to shop.
In conclusion, the aforementioned article has highlighted online shopping can easily lack the physical comparison of products/services with competing alternatives, omit critical budgeting, and lead to excessive wastage of resources. The lack of budgeting in contemporary online purchases is characterized by excessive expenditure/spending, absence of comparative review of competing products/services, short-term considerations of otherwise temporal needs, increment of instantaneous needs, lack of adequate appraisal of product/service features in comparison to need, and lack of financial foresight to increase savings for every purchase.
The article has provided a comprehensive critical review of contemporary literature, punctuated by numerous empirical studies from almost every continent on the globe.
As such, based on the foregoing review on saving costs during online shopping, you will be better advised to:
(a) exploit available cost-saving avenues
(b) overcome negative behavioral uncertainty, and
(c) avoid self-serving convenience and random purchases.
Only then, will your expenditure leave an adequate gap in your income, to generate significant savings.
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