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ABSTRACT
The online retail store has emerged as a ubiquitous sales channel. As a medium of business that uses computer systems and internet technology to distribute goods and services, the online retailer must attract the maximum possible number of shoppers to buy online at its website, if it is to succeed. It is important, therefore, for the online retailer not only to understand consumers' online shopping behavior and the factors influencing such behavior, but also to predict online buying potential. In this study, we investigated the contribution of various predictors (independent variables) of online buying behavior using a neural network model. This type of model is known for its competence in examining non-compensatory decision making. Our study is a pioneer in using such a model as a classifying method to predict and explain consumer behavior toward online shopping. An empirical survey was conducted in four Indian state capitals to collect data for our study, and various predictors were identified based on their relative importance to shoppers' online buying. The results of our study indicate that the predictive model developed using the neural network technique has a prediction rate of 97.01%. In addition, we propose a number of suggestions for online retailers and marketers and address future research needs and managerial implications.
Keywords: Online buying, neural network, predictive analysis, e-commerce, cognitive stimuli, Web atmospherics
1. INTRODUCTION
The internet is perceived differently by diverse stakeholders using varied dimensions; viz., as a medium for communication, customer engagement, business transactions, and relationship management. Numerous research studies have revealed shoppers' intentions to use the internet as an information and business medium [Goldsmith and Bridges, 2000; Goldsmith, 2002]. Consumers manifest their shopping behavior through buying habits and choices, and this behavior is influenced by a gamut of cultural, social, and psychological factors as well as various external factors. The World Wide Web has been structured around people where social and professional circles are influential and lead to online buying [Jarvenpaa and Todd, 1996].
E-commerce has experienced exponential growth all over the world. North American sales for electronic commerce reached $262 billion in the year 2014 and is projected reach $370 billion by the end of 2017. On the European continent, the figure is expected to increase from $160 billion...