General Discussion

The Internet and the advent of online shopping provides managers and researchers with an interesting glimpse into consumer behavior in an environment that is not entirely natural or familiar. While a number of generations have grown up in North America with the traditional retail setting of a bricks and mortar store, only the next and following generations will grow up shopping in electronic environments. As a result, it is interesting to examine how consumer learning and skill acquisition, which can be observed from a relatively immature starting state, affect the formation of perceptions and preferences. According to an Ipsos-Reid survey, as of 1999 only 28% of Internet users worldwide had made a purchase online, by 2000 that number had grown to 36% and by 2002 it had grown to 62% (Gilbert, 2003). In other words, most Internet users have only just begun shopping online and many consumers are still not Internet users. Understanding how people learn to consume in electronic environments, and how that learning affects their judgement and decision making, promises to be an interesting area of research for many years to come.

This is not to say that the experience will necessarily alleviate the lock-in or the perceptual changes that occur with use. In fact, researchers in the field of human computer interaction have recognized that in learning to use a computer interface, people prefer to 'jump right in' and begin using the system by applying knowledge they have from previous experience with other relevant tasks . This creates the paradox of the active user . Users prefer to focus their learning on achieving goals (as opposed to learning for the sake of learning alone) and they tend to rely on past experience to guide current behavior. As a result, 'when situations appear that could be more effectively handled by new procedures, they [users] are likely to stick with the procedures they already know, regardless of their efficacy' (Carroll and Rosson, 1988, p. 81). In other words, as experience with computer interfaces increases , especially those interfaces that are linked to particular goals (shopping, reading news articles, checking stock quotes, etc.), the difficulty in transferring to different types of interfaces is likely to increase.

Managerial Implications

The managerial implications arising from this line of research center around three strategic decisions: interface design, market entry and market research. My view on interface design echoes that of Johnson et al. (2003) who argued that 'a navigation design that can be learned rapidly is one of a Web site's strongest assets the layout of a site can be an important strategic tool' (p. 72). In particular, I would argue that any computer interface that can facilitate the development of non-transferable skills has an advantage over its competitors, because consumers that acquire such skills will, as a result, perceive the competitors to be of lower quality. A commonly used example of such a design feature is Amazon.com's one-click technology. 'One-click' expedites the purchasing process for Amazon's customers. In many online stores once a product has been selected for purchase the customer has to go through a lengthy process of entering credit card and shipping information. In contrast, when a shopper at Amazon.com finds an item that they wish to purchase they simply click on the 'one-click' button and the checkout process is automated. Amazon has vigorously and litigiously defended this feature arguing that it is a patented technology of central importance to Amazon's customer relationships.

Lands' End's My Virtual Model ^TM is another example of a Web site feature that aims to make online shopping, in this case for clothes, easier. After an initial registration process, that takes less than 10 minutes to complete, My Virtual Model ^TM allows the shopper to 'try clothes on' while browsing through the e-store. You can even e-mail your model to a friend or family member, which allows them to see how the clothes would look on you before they make a purchase. Learning to effectively use My Virtual Model ^TM to shop for clothes online leads to a set of non-transferable skills that should help Lands' End lock more customers into its online shopping experience.

Innovative interface features like Amazon's 'one-click' and Lands' End's My Virtual Model ^TM offer clear advantages to online shoppers. However, it is important to recognize that the effects demonstrated in this chapter arise from much more subtle differences between the two interfaces. In other words, if simply exchanging radio buttons for pull- down menus can create a 33% difference in market share over only six trials with a task that at its peak takes an average of 76 seconds to complete, the switching costs that can be built into more sophisticated real-world Web sites have the potential to create a meaningful competitive advantage.

On the other hand, if a company is a second-mover, competing with a market leader that has already developed an installed base of skilled customers, this research suggests that a copycat strategy may be beneficial. Specifically, a second-mover should attempt to maximize the degree to which skills gained using the market leader can be transferred to the follower's Web site. For example, Barnes and Noble's Internet store developed its own version of Amazon's 'one-click' technology, which allowed customers to automate the checkout procedure on bn.com in much the same way that they could at Amazon.com.

Barnes and Noble's top-screen navigation features are also very similar to Amazon's 'tab-based' navigation. While such a copy-cat strategy alone may not be enough to overcome the first-mover advantage (Carpenter and Nakamoto, 1989) that a site like Amazon has acquired , recent research has demonstrated that the copy-cat approach can make the second-mover much more appealing than any other competitors and it can do so without causing any negative customer reactions - e.g., the second-mover being perceived as a poor imitation (Warlop and Alba, 2004). Extrapolating from the current research, part of the appeal of a copycat may be a perception of higher quality inherited from the market leader.

Finally, this research reinforces the conclusions of Murray and H ubl (2003), who argued that:

Early in the market research and product development process an effort [should] be made to understand the accumulated human capital of the target user group (s). It is important to consider that, from a user perspective, the cost of a new piece of software or of a purchase at a new online store incorporates not only the price of the product, but also the time cost associated with learning to use the product or to complete the purchase transaction.