The Influence of Time on Transactional Use of the Internet: Buying, Banking, and Investing Online

The Influence of Time on Transactional Use of the Internet: Buying, Banking, and Investing Online

Syed H. Akhter (Marquette University, USA)
DOI: 10.4018/978-1-60566-699-0.ch026
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The major objective of this chapter was to test the effect of online time and adoption time on the frequency of transactional use of the Internet. Transactional use of the Internet includes activities such as buying products, banking, and investing online. Findings support the hypothesis that online time and adoption time positively and significantly influence the frequency of transactional use of the Internet. Theoretical and strategic implications and recommendations for future research are presented.
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In the last two decades the Internet has had a significant impact on buying behaviors of consumers. Hailed as a path breaking discontinuous innovation, it was not surprising to see predictions of how this new medium would make traditional retail outlets irrelevant. Schneiderman (1980), for example, predicted that Americans would buy fully one-half of all general merchandise without setting foot in a retail store, and Rosenberg and Hirschman (1980) opined that electronic shopping would irreversibly transform conventional retailing. Somewhat later, Benjamin and Wigand (1995) went so far as to suggest that the Internet has the capacity to “eliminate retailers and wholesalers entirely” (p.62). These predictions, of course, have not materialized. The Internet has not made brick and mortar stores irrelevant, but it has established itself as an integral part of modern commerce and commercial discourse.

The commercial use of the Internet has transformed value creation and value delivery activities. Its unique configuration of capabilities has significantly influenced the practice of marketing (Hoffman & Novak, 1996; Quelch & Klein, 1996). Businesses have adopted the medium not only to communicate with customers but also to provide them with a platform for conducting transactions. Most businesses, large as well as small, now have an Internet presence where people can browse, chat, shop, buy, and sell. Online retail sales, as a result, increased from $87 billion in 2005 to $107 billion in 2006 (U.S. Department of Commerce, 2008).

While the growth of online retail sales appears encouraging, recent data on Internet usage continue to show that people are not fully utilizing the transactional capabilities of the Internet. In a Carnegie Mellon University study, for example, the most popular uses of the Internet were obtaining hobby-related information, communicating with family and friends, and enjoying oneself (Kraut et al., 2002). The Stanford University study found that 90% of respondents reported using the Internet for emailing, whereas only 7% used it for trading stocks ( More recently, findings from the Pew Internet Project indicate that, on an average day, 77% of Internet users use the Internet for emailing, 46% for news gathering, and only 18% for online banking (Rainie, 2005). These and other studies show that compared to emailing, chatting, networking, or reading newspapers, other activities such as buying products, banking, and investing online are not as popular.

Key Terms in this Chapter

Online Transactions: using the Internet for buying products, banking, and investing.

Digital Usage Divide: the gap between those who use the Internet for a variety of purposes versus those who do not.

Internet Adoption Time: the total number of years online.

Digital Access Divide: the gap between those with access to the Internet versus those without.

Online Time: the average number of hours spent online per week.

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