A Study of the Effect of Risk-reduction Strategies on Purchase Intentions in Online Shopping

The rise of online shopping has gradually changed consumer behavior. Not only does it offer convenient shopping with a variety of products, but also allows quick price comparisons and fast access to product information. Though it has developed rapidly in recent years, it is still perceived immature due to risks. This study is to explore the differences between the perceived risks and risk reduction strategies by different product types, as well as the effects of online shopping experiences and consumer innovation on perceived risks. And it also examines insecure factors formed by perceived risks in online shopping and consumers’ risk mitigation plans, and eventually determines if risk reduction strategies encourage consumers’ purchase intention. The study finds that experience goods possess a higher perceived risk than search goods does, and therefore requires a more effective risk reduction strategy. Abundant online shopping experiences are more helpful in handling perceived risks of shopping. Innovative characters are capable in taking more risks. Perceived risks are positively associated with risk reduction strategies. Finally, risk reduction strategies increase consumers’ purchase intention.