The Impact Of Internet Savvy Commerce Essay

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Since the World Wide Web in the early 1990s, the Internet has grown at a rapid pace. According to the World development indicators conducted by World bank (2010), Malaysia Internet users are growing up to 56.6% in the year of 2009, which represents approximately 50,000 people uses the Internet, in which most of the users have experience in online shopping. These new kinds of shopping channels enable users to enjoy a different yet convenient shopping experience. In the transactions of business-to-consumer (B2C), the Internet has changed the way how firm operate in websites. Certain characteristics are making it more convenient for the consumer, compared to the traditional way of shopping, such as the ability to at any time view and purchase product, visualize their needs with products, and discuss products with other consumer (Joiners et al., 2003).

As mention of above, these extremely increased on Internet user created a revolution in real estate brokerage services. In the early years of the Internet, some researchers often characterized it as a threat to the real estate profession, particularly in the area of residential real estate brokerage. (Tuccillo, 1997). However, the Internet is also a valuable marketing channel that allows storage, delivery, and exchange of vast amounts of information at very low cost (Peterson et al. 1997). This realization has created significant changes in real estate brokerage services are provided, with real estate agents investing heavily in this new technology (Tse and Webb, 2002).

According to Burt and Sparks (2003), Internet is a potentially disruptive innovation for selling activities, Internet technology provides the possibility of an alternative distribution channel, it can make established business models obsolete, and it can pose a real threat to the real estate business in particular locations. E-commerce might, for instance, diminish the relevance of geographical proximity, because physical proximity between real estate agents and consumer is no longer required (Mitchell, 1995). B2C e-commerce may also dramatically change the composition and nature of real estate sector in cities (Dixon and Marston, 2002; Dixon et al., 2005).

According a research conducted at 1999 by National Association of Realtors (NAR), founds that 23 percent of all the surveyed individuals searched online for a home, and approximately 58 percent of those Internet users felt that online searches were valuable or extremely valuable to them. Another research conduct by Tse and Webb (2002) examine the impact of monthly web page views (hits) on the number of transactions (scaled by brokerage firm marketing staff and agents) for a large brokerage firm in Hong Kong from January 1996 through April 1999, holding constant advertising expenses and the number of firm branches. Their results indicate that a 1% increase in the number of page views leads to about a 0.2% increase in the number of transactions per staff member. When relating page views to compensation, the authors conclude that a 1% increase in page views increases the agent's commission by about 0.4%. These results suggest that total revenues of the firm are influenced by a firm's decisions about Internet use. According to the figure above, we can interpret that online home buyers are increasing and it create a direct impact to real estate agents sales revenue by using Internet. Additional, real estate agents can utilize the Internet to reduce the cost of providing information to potential buyers. The upside for the broker is that buyers can match with sellers and self-select properties they are interested in and reduce the time and cost a broker must spend identifying and showing properties to the buyer. Moore (2000) states: ''A better-informed consumer leads to a more productive agent, which can save time and money for the real estate company.'' Various researchers and experts claim that real estate agents who adopt and integrate Internet resources into their business are likey to improve: (a) their productivity and profitability (Delcourse and Miller, 2001; Stanfill, 2000; Tse and Webb, 2002), (b) interactions with and service to customers (Conhaim, 1998; Delcourse and Miller 2001; Tse and Webb2002); (c) customer satisfaction (Stanfill, 2000), and (d) their professional skills (Cohaim, 1998).

Research Problem

The purpose of this study is to addresses the research gaps identified above by investigating the influence of proficient of using Internet and possible consequences on service provider's use of Internet resources. We also acknowledge the existence of powerful theoretical frameworks that have guided research on the adoption and utilization of information technology, including the theories addressing the adoption and diffusion of innovation (e.g, Rogers 1995), the theory of reasoned action (Ajzen and Fishbein 1980), the theory of planned behavior (Ajzen and Madden 1986) and the technology acceptance model (David 1989). However, the construct of this paper does not involve the comprehensive testing of any one or more of these theoretical frameworks, but its combine these theories and utilizes related findings and focuses on identifying and testing for direct relationships between level of Internet savvy, degree of Innovativeness, attitude and Internet utilization intention. The motivation of this study is to find out three main aspects: 1) What determine their willingness to use Internet; 2) Intention to use online property portal, in the context of Malaysia real estate agents.

Research Questions

What relationships exist between a real estate agent's Innovativeness will indicate the Internet utilization intention?

What relationships exist between a real estate agent's Internet savvy will indicate the Internet utilization intention?

What relationships exist between a real estate agent's attitudes toward Internet will indicate the Internet utilization intention?

Literature Review

Online real estate portal adoption

Online real estate portal adoption is defined in this study as the extent to which a real estate agents utilizes the real estate portal as a marketing tool to effectively reach and serve his/her customer (cf. Gulati, Bristow, and Dou 2002). Both business (e.g., Dos Santos and Kuzmitz2000; Pease 2000) and academic publications (e.g., Hoffman and Novak 1996; Peterson et al. 1997) have highlighted the utility of the Internet as a medium that enables better communication between involved parties. In addition, Weitz et al. (2001) point out that the Internet is a medium that enables salespeople to prospect, gather information about clients and prospects, and communicate with principals and clients. Winer (2001) underscores the importance of building relationships with customers using Internet, and Barua (2011) argues that the Internet has the very real potential to enhance real estate agents customer services throughout the sales process.

Although the Internet tend to be very potential and useful medium for real estate agents, but the concern about disintermediation is still remain a disputable topic among researches. The concern about disintermediation is reflected quite well in a mock discussion in Guttery, Baen, and Benjamin (2000): ''The fear mongers' theory is simple: If buyers and sellers can sit at their computers and gather enough information about each other's offerings-and even make offers-why should they pay real estate brokers?'' Tse and Webb (2002) echo this concern: ''With the advance of technology, it is possible that the Internet would enable information sharing and the bypassing of traditional information structures.'' Tse and Webb (2002) point to the need for more research on understanding the costs of an Internet presence for a broker. An important cost to consider in evaluating the potential of the Internet for disintermediation of brokerage services is a buyer's search cost. The important issue is whether the Internet reduces buyer search cost to a level that is lower than the brokerage fee. If so, the buyer will conduct the search and will have no need for a broker.

Baen and Guttery (1997) assert that, prior to the development of recent technologies; the cost of acquiring information previously led buyers to use brokers in real estate transactions. Tucillo (1997) argue that the reduction in information costs afforded by new technologies such as computers and easily available databases will lead to lower costs per transaction and a need for fewer brokers. Unlike Benjamin and Chinloy (1995) who contend that technology increases sale price, Baen and Guttery (1997) argue that lower transaction costs will result in an income transfer from brokers to sellers and buyers.

However, Guttery, Baen and Benjamin (2000) pose their concerns about broker disintermediation as: ''If information is power and if more information about real estate markets is available to the general public through technology, these technological changes signal a transfer of power to consumers that will devalue information and services previously available only through REALTORS, their associates and other real estate sales licensees. The industry may be close to imploding as it faces the challenges of new vehicles such as the Internet for disseminating real estate information.''

Miles (2000) offers the ''two real estate dot-coms'' theory that builds on the ideas of Baen and Guttery (1997). The first real estate dot-com world will evolve with the question of how many brokers will remain as the Internet reduces the need for brokers. Miles (2000) addresses disintermediation in the commercial brokerage industry as: ''The net loves to cut out middlemen and reduce margins.'' The second real estate dot-com world will evolve as online real estate brokers choose the geography in which to most profitably extend their services. Well-financed brokerages will become increasingly concentrated and powerful. Miles (2000) asserts that above average growth will take place in preferred neighborhoods. On the other hand, disparities in income and education mean that less attractive geographies will be losers.

Stanfill (2000) addresses the risk of disintermediation for commercial real estate brokers as the best way to beat the Internet is to join the Internet. Real estate brokers must simply accept the Internet as a way of doing business and find a way to maintain their value-add in the supply chain. In a survey of 150 brokers in Ohio, Muhanna (2000) seems to support Stanfill's contention by finding that the driver behind a broker adopting the Internet is the wish to attract new buyers and cut buyer acquisition costs as opposed to a simple fear of losing business. On the other hand, Muhanna cautions that brokers may be underestimating the threat posed by the Internet for broker disintermediation. Similar conclusions are reached in Aalberts and Townsend (1999), Crowston and Wigand (1999), Crowston, Sawyer and Wigand (2001), Jud and Roulac (2001) and Ford and Rutherford (2002).

Bond, Seiler, Seiler and Blake (2000) recognize that the Internet provides the least cost method of providing real estate information. They argue that all realtors can remain competitive only if they offer their properties on the Internet. Bond et al. survey the Ohio real estate brokerage market for web usage. The survey finds that most brokers have their own websites or list properties on other sites and that soon all brokers will. The survey also indicates that the amount of information provided on real estate sites is increasing. Bond et al also determine that brokers have done a good job adopting information technology. Bardhan, Jaffee and Kroll (2000) reach an analogous conclusion and find that real estate brokers can reinvent themselves as a new kind of intermediary who can thrive in the Internet world.

This idea that embracing information technology can have positive net benefits for real estate brokers is empirically confirmed in Jud, Winkler and Sirmans (2002), Sirmans and Swicegood (2000) and Benjamin, Jud, Roth and Winkler(2002a). Using data from the 2001 National Association of REALTORS_ Profile

of Residential Real Estate Brokerages, Benjamin, Jud, Roth and Winkler (2002a) focuses on the Internet and finds that the net income of residential real estate brokers increases with use of the Internet. Zumpano, Johnson and Anderson (2002) utilizes the 2000 National Association of REALTORS Profile of Home Buyers and Sellers to examine the hypotheses that the Internet will affect broker income and/or the demand for brokerage services by empirically studying how the Internet impacts buyer search time and the intensity of buyer search. They find that the Internet reduces search time however search intensity actually increases. Buyers end up looking at more properties without extending search duration. Zumpano, Johnson and Anderson (2002) argue that as buyers become more efficient in identifying properties they are interested in, brokers can then focus their time on pursuing the most likely sales opportunities. The same argument is made by Ong, Miller and Chow (2002). Zumpano, Johnson and Anderson interpret their findings as support for the previous literature that advises brokers to expand their web presence in order to insure their survival as an intermediary in real estate transaction. As such, the conclusion lead to Internet

Internet Savvy

The American Heritage College Dictionary (1997) define savvy as "well informed and perceptive; practical understanding or shrewdness, to understand, to know, to be wise" (p. 1214). We have adopted this definition and define the construct of Internet-savvy as one's accumulated, aggregate level of knowledge concerning the Internet medium and one's understanding of the applicability and usefulness of that technology in accomplishing a task or objective.

The relationship between a real estate agent's Internet-savvy and Internet usage can perhaps best be initiated with the referencing Rogers (1995) work on diffusion of innovation. Rogers suggest that an individual's knowledge about an innovation and how that innovation functions will affect the likelihood of adoption of said innovation by that individual. As suggested earlier, the more Internet-savvy is a real estate agent, the more he/she knows about how to utilize this new technology tool (cf. Fugate 2001). A natural conclusion drawn from the above discussion is that an individual's Internet-savvy relates directly and positively with his/her Internet utilization. This relationship is further delineated below.

When faced with the challenges of developing new skills and acquiring the technical knowledge necessary to effectively use an innovation (arising from new technology), people tend to postpone adoption of that innovation until they have acquired sufficient internal expertise. This line of reasoning has received empirical support across a broad range of adoption settings, including adoption of new information technology. For instance, Neidleman (1979) found that the failure of European small businesses to utilize information systems could be attributed to a lack of knowledge of such systems. Other studies have established that employees with high levels of knowledge regarding technological innovations (Ettlie 1990; Thong 1999). Therefore, the construct of Internet savvy could be defined as a real estate agent's accumulated, aggregate level of knowledge concerning the Internet medium and his/her understanding of the applicability and usefulness of that technology in accomplishing a task or objective (eg: selling activities). Based upon this definition, we expect that the greater is a sales agent's knowledge of the Internet, the more he/she will use Internet to accomplish selling related activities. Thus, we can propose the hypotheses as:

H1: Internet-Savvy is positively related to real estate agents online property portal utilization intention.


A basic tenet of the adoption and diffusion of new products in a society is that some individuals tend to be exhibit greater interest in, are quick to seek information about, purchase, and use new products soon after those products are introduced in the market. In this research, the authors have adopted Solomon's (1996) definition and defined innovativeness as one's willingness to or likelihood of quickly adopting new ideas, products, services; an individuals who adopts such products before the mass market does so, a willingness to be a 'trend leaders' (Solomon 1996).

According to the innovation diffusion theory (Rogers, 1962, 2003), people react differently to a new idea, practice, or object due to their differences in individual innovativeness, a predisposed tendency toward adopting an innovation. The innovativeness of an individual is a persistent trait that is reflective of an individual's underlying nature when exposed to an innovation. Rogers (2003) presents a meta-analysis of research that spans innovations from the vaccination of remote tribes to the adoption of IT in corporations. Based on the findings, Rogers (2003) proposes a classification scheme that groups individuals into several adopter categories.

Studies on consumer research (Hurt, Joseph, & Cook, 1977; Midgley & Dowling, 1978; Goldsmith, 1990) agree that individual innovativeness is a persisting characteristic or disposition by which one individual can be distinguished from another. Applying the concept of adopter categories to the area of technological innovation, Moore (1991, 1999) convincingly explains how individuals belonging to each adopter category react differently to the introduction of an innovation and offers various practical guidelines on how to market new products for each category of adopters. Both Rogers' (2003) and Moore's (1999) studies show that adopter classifications are based on an individual trait of innovativeness that exists across cultures and innovation domain types. The adopters belonging to the same category have been found to share common characteristics and values with regard to the adoption of an innovation (Brancheau & Wetherbe, 1990; Moore, 1999; Rogers, 2003). Innovators and early adopters are those who are willing to take a risk of trying out a new idea ahead of other members of the system (Moore, 1999; Rogers, 2003). They find it easy to imagine, understand, and appreciate the benefits of an innovation. Their adoption decisions are based on their own intuition and vision, rather than well-established references. They also tend to be greater beneficiaries of innovative technologies than others. Thus, the innovators and early adopters are proponents of radical changes (Kirton, 1976) and disruptive technologies (Moore, 1999). While the innovators and early adopters share many similarities, the innovators are more risk-taking individuals with more advanced technical knowledge than the early adopters. The early majority are primarily driven by a strong sense of practicality. They prefer to wait and see how others people react to the new idea. In their adoption decisions, well-established references play a critical role (Moore, 1999; Rogers, 2003). The late majority adopts a new idea when it becomes an established standard. They do not buy or try unless they are comfortable with their ability to handle the technology. They want to see considerable support and tend to buy or try from large well-established companies. Laggards tend to be very cautious about innovations. They adopt an innovation only when it becomes a necessity. Collectively, the innovation diffusion research clearly indicates that earlier adopters are more likely to adopt a technological innovation due to their innovativeness.

Building upon Rogers' work (1962, 2003), Agarwal and Prasad (1998) argued that a person's innovativeness level is important for examining the acceptance of information technology innovation. They defined personal innovativeness level as 'the individual willingness to try out any new information technology'. They assumed that a person at a high level of personal innovativeness might be a risk-lover or early adopter, so that personal innovativeness affects agent's behavior or intention to use the new technology. Hence, we could postulate that real estate agents use of Internet will be influenced by level of innovativeness concerning the Internet. A more innovative agent would be expected to perceive lesser obstacles when considering the application of the Internet as a selling tool. Therefore, it could be hypothesized as:

H2: Innovativeness is positively related to real estate agents online property portal utilization intention.


A wider definition of attitude sees it as "an enduring organization of motivational, emotional, perceptual and cognitive processes with respect to some aspect of our environment" (Hawkins, Best and Coney, 2004). More specifically, "attitude refers to knowledge and positive or negative feelings about an object or activity" (Pride and Ferrell, 1991) and can also be seen as an "overall evaluation that expresses how much we like or dislike an object, issue, person or action" (Petty, Unnava, and Strathman, 1991 ; Hoyer and MacInnis, 2001; Solomon, 2004). According to Davis (1993), attitude can be defined as "the degree of evaluative affect that an individual associates with using the target system". Attitudes represent what a person feels about a concept, which may be any entity about which persons can think and attach feeling (East, 1997). Thus, attitude plays an important role in the real estate agents decision to adopt a new computer technology (e.g., Davis et al., 1989; O'Cass and Fenech, 2003).

According to Katz (1960) and Grewal, Mehta and Kardes (2000) attitudes serve four key functions for individuals: Knowledge function, as a means of organizing beliefs about objects or activities such as Internet adoption, often determining subsequent behaviors; Value-expressive function, when attitudes are formed and serve to express real estate agents central values and self-concept; Utilitarian function, based on classical

condition theory, with people tending to form positive attitude towards rewarding system and negative attitude towards other system and also Ego-Defensive function, when people form attitudes to defend their egos and self-images against threats and shortcomings.

The best support for statement above would be research done in nineties (Ajzen and Fishbein, 1975; 1980) shows Theory of reasoned action is a well-known model for predicting and explaining individual behavior. Theory of reasoned action asserts that real estate agents behavior is determined by behavioral intentions to perform the behavior, and that behavioral intentions are jointly determined by real estate agents attitudes regarding a behavior. Specifically, attitudes describe general individual feelings of favor or disfavor toward a specific behavior. According to the expectation-value theory, individual attitudes toward a specific behavior are defined as a function of salient beliefs and evaluations of behavior outcomes. Thus, real estate agents attitude construct links the causal relationships between his/her (real estate agents) beliefs and behavior.

In the technology acceptance field, some researchers emphasize the relationship between attitude and intentions (e.g., Hausman and Siekpe, 2008), whereas others argue its unimportance (e.g.,Venkatesh et al., 2003), suggesting that information system usage decisions might be dominated by cognitive beliefs, such as perceived usefulness, rather than affect, such as attitude. Yang and Yoo (2004) argue that researchers fail to distinguish between the two types of attitudes, where the potentially significant influence of cognition attitude gets offset by the insignificant influence of affect attitude. However attitude also found as a predictor of actual behavior in many empirical studies (e.g. Bajaj and Nidumolu, 1998; O'Cass and Fenech, 2003) and an extensive body of literature demonstrates the importance of attitude on behaviors (e.g., Ajzen and Fishbein, 1980; Dick and Basu, 1994). Cao and Mokhtarian (2005) consider that the collective empirical evidence highlights the importance of customers' attitude, because attitudinal factors explain most of the variation in e-behavior. Yang and Yoo (2004) pointed out, attitude is resides in human mind, thus attitude have an impact on behavior precedes and produces. Thus attitude can be used to predict behavior. Also it reflects people's predisposition to respond either favorably or unfavorably to a particular behavior, which may minimize social desirability bias. In summary, attitude tends to be a predictor for predict real estate agents Internet adoption. Therefore it could be hypothesized as:

H3: Attitude is positively related to real estate agents online property portal utilization intention.

Conceptual Model

Firgue 1 presents a conceptual framework depicting the motivation that's drive real estate agents use of Internet as selling tool. The realstionship depicted in this framework indicate to real estate agents Internet savvy, level of innovativeness and attitude to influence the degree to which agents will adopt the Internet as a selling tool.



Internet Utilization Intention