Perceived Risk for Multiple Services in the Consumer Buying Cycle

This study compares consumer perceived risk between five e-service delivery systems and their traditional (non-Internet) counterparts over each stage of the buying cycle. Using a survey methodology, the authors find that in general consumers perceive e-services as riskier than traditional services. The difference in perceived risk, which the authors define as the Internet risk premium, is significant for each service and each stage of the buying cycle. There is a spike in perceived risk at the purchase stage in the buying cycle for each of the five services. This pattern is also evident in the four services with traditional delivery systems. Perceived risk affects the consumer throughout the buying cycle and is not alleviated in the information search stage. Different risk factors drive perceived risk at various stages in the buying cycle. The authors provide both research and managerial implications of these findings.