The Impact Of Social Media On E-Commerce And Social Commerce Adoption In Nigerian Students

The Impact Of Social Media On E-Commerce And Social Commerce Adoption In Nigerian Students

Abstract

The purpose of this study is to examine the role of social media in e-commerce and social commerce adoption of Lagos state university students. The study uses a PLS-SEM method to evaluate the influence of social networks on consumers’ intention to buy through social networking sites. The results of data analysis indicate that social media increase the level of trust in consumers and indirectly encourage intention to purchase through social network sites. It also shows that perceived usefulness has more influence than trust on intentions to buy. This study also aims to serve as an indicator to potential readers (companies) of how they can tab into the decision making process via social media sites.

Chapter One

Introduction

1.1 Background to the Study

New technological inventions can have a great impact in organizations through its contributions to change the social environment while expediting sharing of knowledge and the development of new ideas. (Kling et al, 2005). Social Media will come in handy as a good example of new technological innovation that is making a great impact in the organizations of today.

In time past, the social media inspired technologies were seen as a chapter. But time has proven that wrong. We have seen the world being transformed daily by these new collective technologies, which is giving a new hope to organizations with impacts which were never considered to exist initially.

Today, most organizations are mainly interested in incorporating social media into the business structures of their organization, but do not have a proper know-how of what social media is all about. They also don’t have a tangible channel to ascertain the gain that these technologies hold for them. In a survey carried out in 2009 by McKinsey and Company, it was discovered that with the appropriate use of the social media a lot of organizations were able to benefit from each other in ways such as sharing of ideas, communication becoming better and the workplace environment becoming enhanced. The value that social media adds in organizations is huge as an increasing number of organizations are already endorsing and exploiting the various opportunities in social media technological innovation. This is to enable them find support for their various organizational and business practices (Starmark, 2008;).

Social media hold a lot of interesting opportunities, but it is important to understand how to utilize it with its accompanying impact in an organizational context beside where it is applicable in real‐life projects. The present day organizations should ask questions like how can employees use social media technologies to do their work and what impact these have on employees. These should be pivotal questions for modern day organizations. These questions can help organizations to understand how social media technologies work effectively at workplace. Thus, it affords them the opportunity to review and understand how to utilize what it offers with its impact on how people interact and work among them as earlier discussed.

Hill (2009) portrayed Globalization as the deviation towards a more unified and co-dependent economy which is historically merging different national markets into one global enormous marketplace. The Economic Intelligence Unit (2009) announced that, the global market place was overwhelmed by variations in exchange rates, the purchasing behavior of consumers and inflation in the course of the recession that started in 2007. These economic developments have ended up compelling organizations to redesign their business strategies so they can be able to communicate their brands more effectively. Davis (2001) writes that brand is one of an organization’s most prized assets which simply imply that there is a demand on the present day organization to understand that it is important for them to capitalize on their brand. This can help them maintain a profitable growth and achieve sustained profitability objectives.

There are various means of building brands, which can come in form of advertising, meeting specific needs of customers, attaching a particular image to a service or product, identifying and meeting a need that competitors are to identify, combative communication and strategizing price (Burger et al, 2009). As recessions is towering in recent times of high, it became very imperative for organizations to maintain honest, clear medium of communication and retain a good image in a cost effective means (Unit for Economic Intelligence, 2009). Social media marketing was one of the popular channel organizations used to communicate their brands during the recession. Some of those mediums are; online electronic media which helps facilitates participation, responsiveness, consultation, connectivity and networking amongst online end users (Mayfield, 2008).

Social media channels like Twitter, Facebook, YouTube, LinkedIn etc are some of the dynamic tools that have helped facilitate online rapport (Golden, 2011). Relatively, it is a low cost pattern of marketing which allows organizations to engage direct end-users through their contacts (Heinlein and Kaplan, 2010).

Brands and consumers have a changing role to play in the organization’s strategy given the choices made available to consumers and the prominent role of social media marketing being that they now have an impact on the economy (Mayfield 2004, Lindeman, 2008). Brands have huge influence on customer choice and customers influence other customers. Affecting repurchases are these series of events, which goes on to affect earnings in the future and long term organizational continuity (Oliveira and Sullivan, 2003).

Thus, consumer’s buying behavior is often influenced by a leading brand. This value is created by generating demand (via repurchases) and securing of future earnings for the organization (Sullivan and Oliveira, 2003). Therefore social media marketing serves as opportunities for communication and depends upon new and unusual thought patterns (Heinlein and Kaplan, 2010; Kweskin, 2008). This helps customer’s product and brand experience.

This new era of digital communication and social engagement is preeminent for strategizing in business. Therefore as organizations are becoming more competitive globally, it is pertinent for them to explore marketing strategy in a more compelling and innovative way so as to attract larger number of customers (Rockendorf, 2011).

1.2 Problem Statement

The coming of the Internet and its acceptance by the public, have altered quite a lot in the way organizations promote their services and products as well as the channels of communication between them and their customers.

This is seen in the way they market and communicate their brands and products nowadays which is becoming a challenging project.

Customers are overwhelmed by marketing commercials and promotional events. The sensitivity of customers to get excited is fading out on promotional events and consumers are beginning to resist the efforts of some companies at marketing them.

Basically, the promotional focus of some organizations is on the conventional mass media advert style which includes commercials on TV, radio jingles and advertisements in print formats such as newspapers and magazines along with billboard placements. It is now on record that as the Internet is fast advancing across the global marketplace, the effectiveness of traditional mass media is fast on the decline.

1.3 Objectives of the Study

The main objective of this study is to examine the impact of social media on buying behavior of consumers. Specific objectives of the study are:

1. To examine students’ perception towards shopping online.
2. To examine factors that motivate student buyers to shop through social media platforms.
3. To examine how social media channels have affected buying behavior of Lagos state university students.

1.4 Research Questions

1. What perception do students’ have towards shopping online?
2. What factors motivate student buyers to shop through social media platforms?
3. How have social media channels affected buying behavior of Lagos state university students?

1.5 Research Hypotheses

1. HO: Students have negative perception towards online shopping.
   Hi: Students have positive perception towards online shopping.
2. Ho: There is no significant relationship between social media channels and buying behavior of consumers.
   Hi: There is a significant relationship between social media channels and buying behavior of consumers.

1.6 Scope of the Research

With regard to the objectives, conducting the research from the perspective of consumers would be a considerably suitable approach. The researcher realizes that there are many available reports and studies which rather aims to help businesses to gain a better understanding in social media marketing but not to help consumers to identify reasons that social media has changed their decision making process. Since the purpose of marketing is, in sum, about consumer; therefore, by having the starting point from the perception of consumer, and by collecting data from consumers’ point of view, fresh insights can be gathered. The research also aims to serve as an indicator to potential readers (companies) of how they can tab into the decision making process via social media sites. The research focuses on the behavior of end consumers (individuals) and particularly within the retailing industry, for instance clothing, food and beverage, consumer electronics, and so on.

Chapter Five

Summary of Findings, Conclusion and Recommendations

5.1 Summary of Findings

The first objective of the study was to examine students’ perception towards shopping online. Findings from the study show that at a significant level of 0.05, students’ perception towards shopping online is positive. Majority of the students agreed that online shopping is the fastest and safest means of purchasing goods and services.
Findings from the study also shows that various factors such as demographic factors and risk evasiveness of students shape the way and pattern they purchase goods and services online. Female are more prone to buying products online than men.

The third objective of the study was to examine the influence of social media on consumer buying behavior. From the study, students also asserted that social media adverts have also shaped and influenced their buying behavior. Catchy adverts on social media sites such as facebook, amazon, yotube etc has made them more confident to shop online. Seeing a product on a well trusted site tends to make more students to purchase products from ecommerce sites. At a significant level of 0.05, there is a positive relationship between social media channels and buying behavior of consumers. The results show that trust, encouraged by social media, significantly affects intention to buy. When potential consumers are encouraged to trust in vendors by their peers, and also to trust in the SNS itself, they are more likely to buy through social networking sites. This confirms the related hypothesis and answers the second question of the research. In addition, perceived usefulness is the other construct of the research that significantly affects intention to buy. When participants experience high levels of system quality or information quality, they are more likely to buy through social networking sites. Data analysis shows that perceived usefulness has more influence than trust on intention to buy through social networking sites. Hence, improving the quality of websites enhances perceived usefulness in their consumers. The other data revealed by analysis confirms that trust has a positive and significant effect on perceived usefulness. Once participants accepted trust, not only had they more intention to buy, but they also found increased perceived usefulness in the site. This highlights the mediating role of trust in social commerce adoption. Therefore, trust has a significant role in e-commerce by directly influencing intention to buy and indirectly influencing perceived usefulness.

5.2 Conclusion

Recent advances on the internet and the development of social media have facilitated the interconnectivity of consumers. Consumers have social interactions through social media such as online forums, communities, ratings, reviews and recommendations. These developments have introduced a new stream in e-commerce, called social commerce, which empowers consumers to generate content and influence others. These interactions provide different values for both business and consumers.

Both are involved in the co-creation of value. The present study borrows constructs from the technology acceptance model, and integrates them with trust and social media concepts to propose a model to examine the role of social media in e-commerce and social commerce adoption. The model has been validated through a PLS-SEM method, indicating that social media increase the level of trust in consumers and indirectly encourage intention to buy through social networking sites. The results of data analysis reveal that social media empower participants to generate content through online communities, reviews and recommendations. Consumers, facilitated by social media, generate online social support for their peers. Consequently, these interactions establish trust in the networks used.

5.3 Recommendations

Today, any marketer or business owner understands the importance of internet marketing. Marketing a business on the web implies leveraging social media to create a lot of buzz in relation to a brand. Social media platforms offer immense possibilities for fostering relationships with consumers in an online environment. This study suggests different approaches for online marketers and managers looking to invest in advertising on social networking sites and hence improve their ads’ performance regarding clicking the advert and generating positive reactions towards it. One approach implies understanding the sources of trust in online information provided by sources social media users may or may not know, and how their concern for privacy influences their reactions to online advertising.

Managers should be aware of the importance of social media sites in influencing online shopping by identifying and targeting different types of customers and taking initiatives to recognize and highlight customer interests.

In order to be successful in social media marketing, companies need to create a buyer persona and then develop and constantly adjust the online marketing strategy according to the interests of customers for long-term success.
Figuring out what goes best for which particular audience leads to success. Regarding these aspects, companies can use online reputation systems in order to provide the right online incentives to the right online customers.

True customer engagement means commitment-focused, not transaction-focused. The companies that master this aspect are the ones that are truly successful. They undergo continuous online marketing research and must be sensitive to changes in consumer behavior patterns and to identify new areas of consumer values and interest.

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