Group 2: Virtual Shopping: The Pros and Cons of Online Shopping - Dhaliwal Navdeep, Ho Erika Daphne, Rempfer Colby Jacob, Tam Wade Doug

Introduction to Online Shopping
In the 21st century, there are many luxuries to us that make everyday chores and hobbies faster and much more convenient. One of these popular comforts is online shopping. Often, people would rather not leave their home to do shopping, and now, they don’t have to. Online shopping is usually quick, thanks to easy-to-read size charts, color charts, and quantity options. Also, there are many features that make giving your credit card number safer, because we all want to be careful who we give personal information to in an age of computer hacking and identity theft. Online shopping can be an advantage in many ways, but it can also be undesirable as well. On many occasions, people may want to take the time on a Sunday afternoon to go to the mall and shop casually with friends. Online shopping doesn’t allow you to do this, and it doesn’t allow you to try clothes on or ask for a second opinion. In all, it comes down to what you feel like doing at the time you want to shop. But since we’re talking about online shopping here, if you’re looking for an easy way to get some shopping done, turn on your computer, sit back, and get ready to do some serious browsing.

Pros of Online Shopping
There are many advantages to online shopping. The most obvious one is the fact that it is very convenient. There is simply no restriction on when you can buy products using online shopping. It is open twenty four hours a day. All you need is a computer with internet access. Also, you can do it in the comfort of your own home. By not being required to travel anywhere, you save money on the gas you would need to drive to a store. Since you do not have to deal with the traffic and weather, it also saves you time. When you enter a store there could potentially be a very long lineup. With online shopping there is no lineups and requires just a credit card to do the purchase.

Another benefit of online shopping is that there are usually wider selections of goods online. Sometimes, when you go to a store they may not have the item in stock or the size you are looking for. In addition, some products are not offered in the area you live in. Today, you can buy almost anything online as anyone can put something for sale using Ebay. The variety of products offered online range from airplane tickets, to groceries, to music and movies (which can be downloaded from, e.g., Itunes). It is very easy to compare prices and find a sale too. Instead of going from store to store, you can look at multiple stores with a click of a mouse.

On the website for the store you are shopping at, usually there is a search engine to find the product quickly. This is a much better alternative then having to search through numerous aisles looking for what you want. When you walk into a store you are often pressured to buy things. By shopping online you do not have to deal with a salesperson, who typically just wants to make an easy commission and quite often offers bad advice. There are consumer reviews on the websites which would provide more accurate advice.

Examples of Pros
As we have discussed in the majority of this report, we feel that like most things, online shopping has both pros and cons. Some of the main pros we found were that the consumer has more freedom over the product they purchase, prices are generally cheaper, and there is greater selection. Apple illustrates an example of the freedom of choice given to the consumers through online shopping, by giving their customers the option of making changes to their product, before purchasing it. When buying a computer from Apple, the consumer is able to add or remove certain parts of the computer, and modify it to fit their needs exactly. This is an option only available when a computer is purchased online through Apples website. This gives the consumers an added flexibility with their product and money.

As we mentioned before, generally speaking, online prices are less than in store prices. In fact a study done by Postrel found that prices were 6 to 16 percent lower online than offline. The reason for this is because online sellers are able to cut down on their overhead costs because they do not have to display their product in a facility, and this means that they can cut some of the marginal cost on products, which in turn means lower prices for customers. Another reason for lower prices is that more often than not, buyers are buying directly from the suppliers, which eliminates the added mark up put on by retailers and distributors. Apple is another great example of this, a couple months back, if an individual was to buy a Mac computer online, they would find it cheaper than in stores, not only that, but each customer making a purchase of a computer also received a free iPod. An example of where its cheaper to buy directly from the supplier is in the month of January, if a customer was to buy any of Lacostes product directly from their site, it cost less than what other retailers were charging for the same product.

Another advantage of online shopping we explored was a greater selection. We found that certain products were only found online, and could not be purchased in stores. For example, we took a look at Best Buy’s website and found that a number of goods were only available online, and beside each of these products in clearly stated that it was an online offer only.

Cons Points
As the premise of this project has been to inform individuals about the pros and cons of online shopping, it has also been our goal to help consumers weigh the risks and rewards of this convenience, and to do that, the cons must also be looked after. Even though online shopping has many pros, we as a group feel that it also has its major drawbacks, one main falter being Internet fraud. Every year millions of people are victimized by hackers stealing valuable information, which they then use to commit fraud. When an individual makes an online purchase, they put a lot of key information about themselves onto the Internet, and if a hacker was to get a hold of this information, they would be able to use your identity for their own malicious wants, leaving you with the deal with the aftermath.

Another con that may cause online shoppers to shy away from the Internet when making purchases is the uncertainty of the product. When most people make large purchases, they like to shop around, and be certain that what they’re buying is exactly what they want, this unfortunately can be quite difficult if that product is being purchased online. When making an online purchase, the customer doesn’t have much to go on, and they must place most of their faith in the seller’s word. The consumer is never 100 percent sure of what the product looks like until they physically get it.

An uncertainty in the product can lead us to an uncertainty of satisfaction, since initially we mostly only have the sellers word, we may not always be satisfied with the product we receive, and returning the product may be a bigger hassle than most people bargain for. In some cases, product bought online cannot be returned, and if it is returnable, the individual may have to pay for the shipping expenses twice. Not only would the consumer be stuck paying for a product they don’t like, they may also not get their money back right away. Shipping often takes seven to ten business day, so not only would the customer have to wait for to get their product, they may have to wait even longer to get their money back for product they were not satisfied with.

A main reason some people choose to make their purchases using the internet is because it saves a great deal of time, but what they may not realize is that it may cause the individuals to spend more money. The ease of online shopping may actually be a downfall, because with everything you want just a simple click away, it makes it easy to overspend. When shopping online there are no tangible limits, it may make it harder for consumers to stay within limits they may set for themselves, and cause them to spend a larger amount of money that they initially wanted.

Examples of the Cons of Online Shopping
Ticket Sales

A common and increasingly frustrating experience occurring nowadays is trying to buy tickets online. In theory, this method of purchasing tickets from the comforts of home sounds like a convenient and efficient way in the technological world of the 21st century. One no longer has to line up the night before in a tent (or some other camping device appropriately conditioned for the time of year) outside a Ticketmaster location. Now, people can log online at the appropriate time in your pyjamas and score a pair of tickets with a laptop, credit card in hand, and a simple click of a button. This sounds perfect, one step closer to a technological utopian society, right? Unfortunately, this method is not as perfect as it sounds.

Recently, an article in the Calgary Herald addressing the ticket sale issue, was sparked due to the frustrated buyers trying to obtain tickets to a Coldplay concert. The article explained that often times, since there are thousands of people logging on the system at the same time, the system will be extremely slow, inefficient, and sometimes the suppliers’ server can crash and you can lose your place in “line”. In addition, many tickets are sold before the general sale due to Internet presales, and tickets are also held for the band members, VIP ticket holds, and season ticket holders. Therefore, by the time the general sale occurs, buyers are already given a limited selection. On top of what was already mentioned, there are hackers and scalpers who know how to either bypass and hack the Ticketmaster system or have some kind of inside connection to get the better tickets and resale them for a much higher price.

An example of this occurring would be an incident reported by the Calgary Herald that a woman living in Edmonton paid roughly $1200 for tickets to a Charley Price concert, when they really should have cost $67.50. The woman’s son, outraged by this, contacted Charley Price’s manager. Charley Price flew from his home in Texas to Edmonton to personally present the woman with a refund for the tickets and better tickets to his show. Charley Price commented, “I would not like to pay that much to see myself.”

The above shows how online shopping can be a bad thing when it comes to ticket sales. Not only do you already have a limited selection to choose from, you also don’t get the tickets you want without paying a higher price from a scalper. Also, the system does not accommodate people who have difficulty using a computer.

eBay Scams

Online shopping might make buying things a lot easier nowadays, but, there one should always be aware of the dangers of online shopping. One of the most common online shopping sites is eBay. Users log on and can buy and sell their items. The only problem with this is that the credibility of both buyer and seller are questionable, and often it is hard to track internet crimes. An example of this is when a woman a twenty-two year old woman from the U.K. was trying to purchase a car online through eBay. She sent the buyer $4900 through Western Union (a cash transfer service between customers). Later, the buyer asked for $1800 more for “delivery costs”. At this point, the woman knew it was a scam.

The above example illustrates how easily it is for someone to steal money from another person through online shopping. In the example, it was only money, but often credit card numbers can be stolen and even identity theft can occur if one is not careful.

Cross-border fees

Online shoppers need to be extra careful when making purchases from merchants not located in their home country. While cross-border shopping has potential for savings and worldwide selection, there are often hidden fees such as duties, brokerage and exchange surcharge that are not disclosed at the time of purchase. For Canadians, duties and brokerage may come as a separate bill form the CRA or shipping carrier after the item is delivered. For example, a $100 leather hand bag may incur $12 duties and $30 brokerage (UPS ground shipping). There are websites that specifically assists Canadians with cross-border shopping, but it is advised that an accurate written quote with all fees included be obtained from the merchant before completing the purchase.

Conclusion
So the question stands, is online shopping really better than shopping in a store? We believe that, after weighing the pros and cons, it depends on the person doing the shopping, what they are buying, and what kind of mood they are in. If they are pressed for time and need to do things quick, online shopping might be the best choice, but if they want to take their time with friends and want a second opinion on what they’re buying, going into the store would seem like the better option. The best thing to do is decide what you feel like doing, heading out for a day of shopping, or staying in and quick clicking your way to the check-out line. An important piece of advice to remember is, although the threat of computer hackers is out there, as long as you are cautious about your personal information, online shopping saves you time, saves you from traveling, and gives you the convenience of shopping at any time, from any location.