Online shopping has become increasingly popular in recent years and is expected to continue to grow exponentially in the United States alone. In 2015, total sales for online shopping reached $335 billion, but it is predicted that by 2020, this number will increase by 56% to $523 billion. While online shopping is convenient and easy, it also poses a threat to traditional budgeting practices. Many shoppers tend to overspend and give in to impulsive purchases when shopping online.

To combat this issue, a comprehensive review of contemporary literature and empirical research studies suggests three research-based initiatives to help increase savings during online shopping.

1. Exploit Cost-Saving Avenues

According to economic professors from London and Washington DC, consumers tend to overlook simple ways to save money while shopping (Griffith et al., 2009). In a study published by the Journal of Economic Perspectives, the professors suggest consumers strategically determine when and how much to buy to save overall costs, purchase products in bulk, buy from outlets that reduce transport costs, exploit seasonal discounts, and watch for temporary price reductions, particularly those offered by companies that provide customer reward programs.

These same findings apply to online shopping, offering opportunities to take advantage of cost-savings by purchasing items using coupons and promotion codes, free shipping offers, and other incentives. Empirical studies have shown that using strategic cost-saving measures can significantly reduce overall spending during online purchases (Deaton, 1998; Seock and Norton, 2007; Katawetawaraks and Wang, 2011; Rudansky-Kloppers, 2014; Yu and Wu, 2007).

2. Overcome Behavioral Uncertainty

A study by Teo, Wang, and Leong (2004) applied Transaction Cost Economics theory to analyze the shopping behavior of Chinese consumers. Behavior uncertainty was one of six unique antecedents identified that had a significant impact on Chinese online shopping behavior. The study concluded that online shopping triggered behavior uncertainty among Chinese consumers since their purchasing decisions were not organized, strategically predictive, or justified by valuation. Rather, purchasing decisions were based on the momentary appeal of the products and services being offered.

To overcome behavior uncertainty, consumers should focus on deliberate, strategic, value-based purchasing decisions that are founded on the economic utility of what is being purchased. Only then can impulsive buying and whimsical purchases be avoided, leading to considerable savings on online purchases.

3. Avoid Self-Serving Convenience and Random Purchases

A study by Ganapathi (2015) examined how Indian consumers behave during online shopping. The research identified that consumers’ little purchasing decisions were often based on what was most convenient for them, rather than on what was needed. The convenience factor was found to be a significant influence on online shopping behavior among Indian consumers; however, it led to random purchases and impulsive buying.

To avoid self-serving convenience and random purchases, consumers should take the time to differentiate between needs and wants, and focus on only what is needed, rather than what is most convenient. By doing so, consumers are more likely to make value-based, strategic online purchases, leading to significant savings.

Conclusion

The growth of online shopping is expected to continue to increase, posing a significant threat to traditional budgeting. Consumers need to act to combat the urge to overspend and make impulsive purchases when shopping online. The three initiatives outlined in this article – exploiting cost-saving avenues, overcoming behavioral uncertainty, and avoiding self-serving convenience and random purchases – provide an effective way for consumers to reduce their spending and increase their savings during online shopping.