Empirical Research on the Groupon Technology Acceptance Model
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Empirical Research on the Groupon Technology Acceptance Model
LIU Hongwei , ZHU Hui
Empirical Research on the Groupon Technology Acceptance Model
1
LIU Hongwei , 2ZHU Hui
1 First Author
LIU Hongwei ,School of Management, Guangdong University of Technology,
liuhw@gdut.edu.cn
2 Corresponcing Author
ZHU Hui, School of Management, Guangdong University of Technology,
zhuhuistyle@126.com
Abstract
Groupon represents a new Electronic Commerce model with lower costs, more competitive pricing
and higher efficiencies leading to a change in the way consumers consume. This paper aims to
delineate a theory of technology acceptance, using Gefen (2003) as its basic theory, and combining
data from online groupon with the professional abilities of information senders. We also put forward
some concepts such as “brands of business” and groupon websites, consumers’ trust and the ability of
community message senders. We obtained data from 208 college students via prepared questionnaire.
The empirical results indicate that business brand and groupon website's quality have a positive
correlation to the trust of customers. This conclusion will provide decisive support to improve
consumer willingness to join online groupon .
Keyword: Groupon, Web Site Quality, Business Brand, Virtual Community
(Tie strength/ Professional Competence)
1. Introduction
Groupon.com was founded in 2008 in Chicago, Illinois. It launched a new-style of group-buying
model, leading to a large number of e-commerce websites which followed it. Since then this new
model has gone around the world. In July 2010, visits to groupon websites in China reached
46,258,000, accounting for 19.3% of total visits to shopping sites in that month. As a new way to shop
online, groupon is a new type of C2B (Consumer to Business) model. Due to it discounts, it has
become very attractive to a large number of people wanting to buy on the internet.
There has been a lot of research done on user technology acceptance and the willingness of
consumers to accept online shopping [1,2]. In the past, however only consumers’ trust towards
business brands has been considered while other factors such as web site qualities, have generally
been overlooked)[3].Groupon combines different guests into a group, making relationships between
customers. It is not clear how these relationships between consumers internationally affect the
compliance intentions of groupon. This paper aims to analyze the factors that affect customers’
willingness to use online services including the qualities of the websites, the business brands and the
interaction between consumers.
Firstly, we review past research and build up our own research model. Secondly, we describe the
procedures for our research and the analysis of the data collected. Finally, we present the main results
of our study, examining the meaning and significance of those results in terms of both theory and
practice.
2. Theoretical Framework and Hypotheses
2.1. Basic Model
Perceived usefulness and ease of use are important factors that determine whether users accept
technology [4,5] . Shopping on line enables consumers and sellers to trade without being face to face.
Thus, trust is regarded as a key point in maintaining an ongoing relationship between the parties to the
transaction[6,7].
The Gefen et al. (2003) Trust and TAM is selected because of it's concise structure and because it is
the most commonly used model in IT acceptance literature. Many studies have shown that Trust and
TAM are effective tools. UTAUT was considered as it includes more elements[1], but it was not
International Journal of Information Processing and Management(IJIPM) 59
Volume4, Number4, June 2013
doi:10.4156/ijipm.vol4.issue4.7Empirical Research on the Groupon Technology Acceptance Model
LIU Hongwei , ZHU Hui
selected because it involves a number of elements, which would overcomplicate our full model，and
be of no help in expressing the relationship between the factors.
Groupon not only has all the common features of online shopping but also has unique features of its
own[8]. Groupon groups together consumers who share the same requirements forming them into a
multiple-purchaser body which can thereby attract a higher discount margin through bulk purchases.
Web site quality is a premium value asset brought to the owner [9]. Its carrier is a group of names, terms,
symbols or decisions used to compete with other products and services, and it does affect consumers’
trust. The source of added value is from consumers’ minds in the form of an impression on their
carrier[10]. Famous websites are more reliable in their view than 'common' or 'unknown' websites, and
the famous brands incite more trust[3].(consumer confidence) Thus, we believe that web site qualities
and brand name recognition relate directly consumers’ willingness to complete their purchase (make
a deal).
As Groupon combines different consumers into a group, it forms relationships between customers.
Interaction between consumers is shown through the professional competence of message senders and
the strength of these ties affects the compliance intentions of groupon[11]. 'Professional competence'
referred to here is built upon the basis of the 'word-of-mouth' receivers’ knowledge, which is judged by
the receivers’ experience with, and information of the products. The tie strength is described as a
natural relationship from strong to weak between consumers and between consumers and Groupon. [12].
In conclusion, the research in this paper focuses on the relationship between trust and web site
qualities, trust and business brands, and the affect which they place on the willingness of consumers.
Professional competence and the tie strength of senders between the consumers in a group will be a
quantitative governing factor between trust and the compliance intentions of groupon in the research.
2.2. Hypotheses Development
1） Groupon Website quality and trust
Compared with traditional C2B sites, Web Site Quality is based more on brand prestige. Having a
well-known web site brand, the business can actually attract more costumers [3].
A well-known brand can attract consumers by giving them confidence in familiarity when faced
with confusion caused by too many web sites with too many unfamiliar choices when purchasing on-
line. On one hand, well-known brands can provide more trust and confidence in the website due to
transference from existing brand familiarity to the website displaying the brand. (a “famous” brand
would not associate with an untrustworthy website) leading to assumptions that this web site can send
products on time and provide reliable information security and so on [7]. Statistics collected by the
Chinese E-Business Research Centre, show that good word-of-mouth marketing, well-known brands
and the large scale decide market share. A “great” brand hosted onsite can obtain trust more easily and
get a larger market share than an obscure or little known brand. Accordingly this research puts forward
the following assumption:
H1: The more highly customers perceive the web site quality, the more trust customers feel.
2） Business brand and trust
As a combination method of online and offline consumer response, web site quality, and business
brands are an important factor affecting consumer’s trust and confidence[13]. A great 'offline' brand can
obtain online customer’s trust more easily. This leads our research to propose it's the second
assumption:
H2: The more highly customers perceive the business brand, the more trust customers feel.
3） Tie strength regulating the relationship between trust and compliance intention of groupon
Many researchers confirm that a stronger tie strength provides a better information dissemination
effect than a lower one [22].The tie strength between information senders and receivers decides the
effect. When receivers believe that senders have high tie strength, the information has a better effect in
persuading consumers to act [14]. In such conditions, information can be more easily accepted and have
an influence which will enrich the understanding of the brand and reduce the risk of groupon. This
60Empirical Research on the Groupon Technology Acceptance Model
LIU Hongwei , ZHU Hui
leads to our third research assumption:
H3: Tie strength has a positive effect on the relation between trust and the compliance intentions
of groupon.
4） Professional competence of information senders regulating the relationship between trust and the
compliance intentions of Groupon
In the research, information from someone with professional competence will be shown to play a
role in selecting what to buy [12]. The more professional this type of person is, the more information
comes from them and the reliability of their word-of-mouth will increase. If the source of the
information is an opinion leader, the influence will be even larger [15]. Therefore, professional
competence has a positive effect on influence and the trust of customers to buy products. This research
leads to the proposal of our fourth assumption:
H4: The professional competence of information senders has a positive effect on the relationship
between trust and compliance intentions of groupon.
Figure 1 provides a graphical presentation of the proposed research model.
Figure 1．Driven model of compliance intention on groupon
3. Research Method
A survey instrument is developed to test the research model. We draw a representative sample of
Chinese Groupon users and conduct a survey.
3.1. Measures
We use validated scales to measure the constructs of the proposed model, with the wording of the
items adapted to the groupon context. Eight reflective constructs are measured in this study. The scales
of gruopon intention, trust, perceived usefulness and perceived ease of use, both of which contain four
items, adopted from a study of Gefen et al. (2003), which, in turn, was adopted from Davis (1989).
Web site quality is adopted from Sultan et al (2002) and Larson(1992). Business Brand is adopted from
Erdem and Swait(1998) and Grewal et al(1998). Tie Strength is adopted from Brown & Reingen(1987).
Professional competence is adopted from Mitchell＆Boustani (1994).
All of the constructs were measured by using a 5-point Likert scale anchored at 1=strongly disagree
and 5=strongly agree.
61Empirical Research on the Groupon Technology Acceptance Model
LIU Hongwei , ZHU Hui
3.2. Data Collection
We collect data through a questionnaire survey aimed at college students who have purchased
through groupon. College students were chosen for the questionnaire survey because, according to
"China Buying Online Market Research Report" released by iResearch Consulting, groupon sites users
are mostly office workers and college students, accounting for nearly 50% of all customers. For
university students, groupon has become a main method of consumption, and they can be said to be
representative of a considerable share of the Chinese online consuming public.
An English questionnaire was developed and translated into Chinese. Following the conventional
back-translation method, we asked a translator who was unaware of the research context to translate the
Chinese version back into English. The two English questionnaires were compared and changes made
to ensure that the Chinese version was equivalent to the original English questionnaire[26].The time for
collecting the questionnaires was between 10th April and 10th May 2011 .Of the 250 questionnaires
distributed, 208 were completed and usable for data analysis, showing an effective response rate of
83 %.
Results show that in terms of obtaining information search engines account for 41.35% of
information searching, indicating that most consumers prefer searching goods via search engines.
Another common search method is by way of community information sharing, which accounts for
36.06% of searches. This datum indicates that most consumers will share product information with
others. Most consumers choose 'LaShou' and 'MeiTuan' websites for such searches. People are likely
to look for food commodities on the groupon web site.
4. Data Analysis and Results
We used partial least squares (PLS) to test the research model and the structural relationships
proposed in Figure 1. PLS employs a component-based approach for model estimation, and is not
highly demanding on sample size and residual distribution. SmartPLS 2.0 is chosen because of its
robustness with regard to assumptions and requirements for data analysis.
4.1. Measurement Reliability and Validity
We estimated the quality of our measurement models with composite reliability and both convergent
and discriminate validity.
1） Composite reliability
The reliability of the measurements is evaluated using Cronbach’s alpha and the composite
reliability scores. The reliability scores of all the principal constructs are considered adequate as they
exceed 0.72, well above the recommended cutoff of 0.70.
2） Convergent and discriminant validity
The convergent and discriminate validity of the measurements are confirmed by three tests. First,
the square root of the average variance extracted (AVE) of each construct is much larger than all cross-
correlations between the construct and other constructs. Second, all AVEs are well above 0.50, which
suggests that the principal constructs capture much higher construct-related variance than error
variance. Third, the correlations among all of the constructs are well below the 0.90 threshold,
suggesting that the constructs are distinct from each other. Jointly, these tests suggest adequate
convergent and discriminate validity of the measurements [16].
62Empirical Research on the Groupon Technology Acceptance Model
LIU Hongwei , ZHU Hui
Table 1. Construct Reliability, Ave, And Correlations
Cronbach’s Professional Sensitive Business Intention of Perceived ease Perceived Reliance of
Tie Strength
alpha competence reliance brand groupon of use usefulness website
Professional
0.77 0.83
competene
Sensitive
0.78 0.30 0.79
reliance
Tie Strength 0.90 0.48 0.25 0.85
Business
0.81 0.48 0.30 0.38 0.72
brand
Intention of
0.90 0.44 0.37 0.37 0.32 0.81
groupon
Perceived
0.72 0.47 0.40 0.32 0.37 0.42 0.78
ease of use
Perceived
0.74 0.37 0.45 0.30 0.43 0.38 0.43 0.79
usefulness
Website
0.76 0.28 0.25 0.15 0.48 0.33 0.27 0.24 0.77
quality
Note: The diagonal elements (in bold) are square roots of AVE.
4.2. Structural Model Test and Results
The result is derived from the Smart PLS structured mode in Figure 2. The study indicates that the
strength rate of whole mode result is 0.373.
Figure 2. Test results
Figure2 shows the evaluation results of the full search model. This model accounts for 37.3% of the
variance in compliance intentions of groupon, which is 23.3% more than that explained by the basic
model. Tie strength and professional competence of information senders both have insignificant paths
to compliance intentions of groupon，failing to support H3 and H4. Hypotheses H1 and H2 are
supported because the paths from Web site quality and Business brand to trust have significant
coefficients. This shows that website quality indirectly affects the compliance intentions of groupon by
the perception of trust，and so does business brand.
5. Discussion
5.1. Main Conclusions
Based on the model of Gefen and Karahanna et al. (2003), this essay puts forward the groupon
63Empirical Research on the Groupon Technology Acceptance Model
LIU Hongwei , ZHU Hui
acceptance model and conducts a questionnaire survey. The Conclusions are as follows:
Conclusion 1: The more highly web site quality is perceived, the more trust customers will have in
group purchases. Therefore, cooperating with popular groupon websites helps to increase sales and
strengthen customers’ willingness to shop by group purchase.
Conclusion 2: If the brands get more recognition, customers will have more confidence in their
group-purchasing activities. A great offline brand can obtain online consumer’s trust more easily.
The failure in H3 and H4 may be due to the limitations of the participants involved. Most of them
had only participated in group purchases once and really did not know whether the relationship
strength and information sender’s abilities could help. It is also possible that the lack of further
questions could have also changed the results. Meanwhile, it illustrates that customer's trust is crucial
to group purchase since the tie strength and professional competence of information senders are shown
to have little influence on customer's trust and their choice.
5.2. Main Contribution
This paper aims to delineate a technology acceptance model, using Gefen (2003) as its basic theory,
and combining with it the three characteristics of groupon website, business brand and groupon
consumers, ant puts forward the view that website quality and offline business brand can affect the
consumers' perception of trust.
Combined with interaction between the consumers, it maintains that tie strength and professional
competence of information senders have a positive regulation to consumers' trust.Empirical results
show that groupon web site quality and offline business brand have positive impact on the consumers’
willingness, and provide some insights for the development of groupon.
5.3. Limitations of This Study
This study has some value in terms of theory and practice, however, the study has some
disadvantages due to shortness of the study period and the limitations of time energy, study
environment and so forth of the researchers. All the above elements imply that this research deserves
further study, which will enable us to form a more convincing system. Directions for further study may
be summarized as follows:
In this study, though both tie strength and professional competence of information senders appear to
have an insignificant impact on the compliance intentions of groupon, in reality, we discover that tie
strength and professional competence of information senders do influence group purchase. We need to
conduct further research on this matter in the future.
6. Acknowledgment
We gratefully thank all seminar participants at the Guangdong University of Technology,
P.J.Redvers-Hill for grammar assistance, and the reviewers for their helpful comments and suggestions.
This paper is funded by Natural Science Foundation of China “ Research for privacy protection of
mobile commerce recommendation system” （70971027）
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