Internet purchasing is used more and more by consumers nowadays to buy both products and services. The reasons for this are that ordering is easy, it takes less time than going to the shops, it is usually cheaper and products are delivered at home. But not everyone is convinced about this shopping method. A lot of people worry about their safety, security and privacy when they buy online. They simply do not trust e-purchasing. The next paragraphs take a closer look at the factors that influence trust and trustworthiness and evaluate their impact on e-commerce.Trust
The definition of trust proposed by Mayer (1995) can be understood as “one party’s willingness to be in a vulnerable position subject to the other party’s actions. In this relationship, the trustor expects the trustee to take actions which are of importance to him/her, regardless of whether he/she has the ability to control or scrutinize the trustee’s actions”. Within trust we can distinguish two different participants: first of all one should consider the trustee, in this case the company that sells online and the trustor, one that makes the online purchase. (Mayer, Davis, & Schoorman, 1995).
One should keep in mind that trust is a process. A consumer has to go through different phases before he really trusts an e-vendor. Those phases are: interpretation (the consumer forms a vision about something based on insufficient information), suspension (the consumer ignores uncertainty in interpretation) and expectation (this signifies the process when one expects that the interpretation is correct and suspension is the right thing to do) (Pittayachawan, Singh, & Corbitt, 2008).
It is understandable why the idea of online shopping makes consumers feel vulnerable because they have to trust online transactions on three levels. First of all they have to trust the product. Is there sufficient quality, does it really satisfy their needs? Next, they have to trust the product offered by the online company and finally, the company’s delivery services (Lim, Hur, Sukho, & Koh, 2009).
Trustworthiness
Trust can be seen as perceived trustworthiness. This consists of three factors: ability, benevolence and integrity (Buttner & Goritz, 2008).
Related to this, if a company wants to improve trust, they have to improve their “appeal” of trustworthiness first. This can be done by several actions of the e-vendor:
First of all an e-vendor should display trust assurances on their website. An e-vendor’s own trust assurances are proven most efficient to increase the perceived trustworthiness. Potential customers tend to carefully examine trust assurances and therefore find the information quality of the trust assurance more important than the issuer of the trust assurance. (Dongmin & Izak, 2010) To increase trust the e vendor should state his trust assurance in the following manner: well structured, logical and backed up with facts.
Trust assurances generally involve three kinds of displayed statements: assurance for information transmission, credit card shopping and privacy protection.
This is why an e-vendor should provide easy access and reiterate the assurance policy information during each step of the purchasing process. Not only does this help to improve trustworthiness, it also minimises loss of sales resulting from high levels of perceived risks by potential customers.
Apart from simply displaying trust assurances on a company’s website, there are several other factors that help improve trustworthiness based on the following categories of antecedents that influence trust and perceived risk by consumers.
The level of trust is formed by the affection based antecedent, the perceived reputation of the selling party and the third-party approval of the e-vendor (although this has proven to be minimal next to own well structured assurances). Trust is partly devised based on the level of familiarity, Internet experience and e-commerce experience of the potential e-customer. Trust also depends on the personality of the consumer himself. (Kim, Ferrin, & Rao, 2008).
Once trust and therefore perceived trustworthiness are achieved an e-vendor should focus on building and maintaining a relationship with its customer. Trust plays an ongoing key role in this process, next to several other factors like: satisfaction, value, loyalty, equity and word of mouth. The perceived value by a customer affects his loyalty the most and subsequently influences positive viral marketing. E-vendors should continuously try to enhance offered value to customers by adding new features to their service and new ways of saving money to keep their customer interested and therefore loyal. This is especially important because unlike brick and mortar shops, the online environment tempts customers to switch products or service suppliers at an even faster rate (Palvia, 2009).
Is all of this possible?
All these things look good in a theoretical context, but are they really true? Web 2.0 enables consumers to communicate with each other and learn from the experiences of their peers. But not all customers read the security policies and the terms and conditions every time, on every website. People are naturally lazy, so it is plausible that some will not differentiate between websites. They trust one website and think they can trust similar websites the same way. If they bought something on amazon.co.uk before, they will also buy on a similar, less known and maybe less trustworthy website, without worrying about their privacy and security. Especially if it concerns a rare product, consumers forget that “what sounds too good to be true, usually is”. Online ghost-companies sell vacations and concert-tickets at very high prices to people who will never see the product they purchase. Nowadays, almost everyone can create a website that looks professional. Unfortunately, a good looking website is no guarantee for a satisfying transaction for the customer.
Some online selling companies have no control over the entire online money transaction system. When someone fills in his VISA-number on a website, this person can get redirected to a transaction frame of a bank. In that case the e-vendor relies on the software and security capabilities of the bank. A few times a year, newspapers write about stolen credit card data and online credit card fraud. This is beyond the control of the online vendors, but it will also be reflected negatively on the image of online sellers.
Because of this, e-vendors should create a good relationship with their buyers which can lead to loyalty towards the e-vendor. When a consumer feels a strong connection between him and the company, he can play a big role in positive word-of-mouth communication. This way, he will be able to convince others to trust the online company just as he does.
Sources:
Buttner, O. B., & Goritz, A. S. (2008). Perceived trustworthiness of online shops. Journal of Consumer Behaviour , 35-50.
Dongmin, K., & Izak, B. (2010). Designs for effective implementation of trust assurances in internet stores. Communications of the ACM , 121-126.
Gefen, D., Benbadat, I., & Pavlou, P. A. (2008). A Research Agenda for Trust in Online Environments. Journal of Management Information Systems , 275–286.
Kim, D. J., Ferrin, D. L., & Rao, H. R. (2008). A trust-based consumer decision-making model in electronic commerce: The role of trust, perceived risk, and their antecedents. Decision Support Systems , 544-564.
Lim, s. H., Hur, Y., Sukho, L., & Koh, s. E. (2009). Role of trust in adoption of online auto insurance. Journal of Computer Information Systems , 151-159.
Mayer, R., Davis, J. H., & Schoorman, F. D. (1995). Integrative model of organizational trust. Acadamy of Management Review , 709-734.
Morgan, R. M., & Hunt, S. D. (1994). The Commitment-Trust Theory of Relationship Management. Journal of Marketing , 20-38.
Palvia, P. (2009). The role of trust in e-commerce relational exchange: A unified model. Elsevier , 213-220.
Pittayachawan, S., Singh, M., & Corbitt, B. (2008). A multitheoretical approach for solving trust problems in B2C e-commerce. Int. J. Networking and Virtual Organisations , 369-395.
Urbana, G. L., Amyx, C., & Lorenzon, A. (2009). Online Trust: State of the Art, New Frontiers, and Research Potential. Journal of Interactive Marketing , 179–190.
Zimmer, J. C., Arsal, R. E., Al-Marzouq, M., & Grover, V. (2010). Investigating online information disclosure: Effects of information relevance, trust and risk. Information & Management , 115–123.
Zimmer, J. C., Arsal, R. E., Al-Marzouq, M., & Grover, V. (2010). Investigating online information disclosure: Effects of information relevance, trust and risk. Information & Management , 115–123.
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7 comments:
Hi,
I also agree with your conclusion. And I think all is question of control: Controle your image, control the comment of the people which can be bad for your image... With the web the word Trust took an other dimension.I think it is dificult to Trust the company on the Internet or Trust the people e.g.: on Ebay. And this is a Big work for the company to build this environment of '' Trust ''. We saw with few exemples the company started to do it with the Blog. On some influent Blogs we can see people write bad articles about the companies ( product or services.The company react by answer to this article e.g.: invite them to speak about the problems.
Thank you
Thanks for your comment.
Working in cooperation with blogs indeed can be a good way to enforce the relationship with your customers.
When you have to trust people (like on Ebay), a good system is that users have to judge the transaction and give points to a vendor or buyer.
But a disadvantage is, when you're just started to use the site, nobody will have rated you, so in the beginning it can be difficult to gain trust.
Hi, guys!
Firstly, I enjoyed reading the post. It is very structured and easy to follow.
With respect to the discussion that you've started: yes, we agree that the use of blogs should be fully utilized. It is a way of collecting and sharing information.
But it can also be used by the company itself, as 'hidden bloggers', to promote their products and thus bias the overall opinion.
Do you think we can eliminate, or reduce, this actions, and if so, what would you recommend?
Thank you!
A lot of this spam is created by bots. This software looks on the web for blogtopics that match the business of the spammers. That is why a lot of blog-sites are using word-verification before posting a comment. Of course, the webmaster of a blog can also configure his comment section. This means that he first can accept a comment before it is posted online. More sofisitcated systems can also recognize spam on the way it is written. But this last tool cost a lot of money.
Hi,
Do you think the work by Mayer et al (1995) is still valid nowadays or its outdated? and why?
Husni
In our opinion the core of the statement is still valid. Of course between 1995 and now, there were a lot of evolutions in the online environment. One of the results is that within a lot of online transaction there are nowadays one trustor and one or more trustees involved.
Nowadays, thanks to web 2.0, the Internet environment is a lot more interactive. The trustor is not the only one that’s vulnerable anymore, so is the trustee. Because of the increasing amount of online consumer communities and social networking websites, consumers can share their experiences in real time. A consumer can make or break a company this way.
The security of online transactions is not only dependent on the actions of de consumer and an organisation, but also on the actions of an intermediary (like a bank). With the increasing amount of online transactions there is also need for more innovations to ensure the security and privacy of consumers. One of these actions that were taken is the improvement of VISA-transactions. Today, in some occasions, you need next to your name, card number and security number also a specific generated code.
Through the years, the consumer also counts on the rules and regulations introduced by different governments. Because of this, a lot of consumers believe that most organisations take actions to implement those rules and regulations. This is why few consumers, wrongly, feel less vulnerable than a few years ago.
The trustor now also thinks he knows the organisation from which he wants to buy something better. Before being involved in a transaction, consumers go online to look for reviews and comments of peers. (Ash, 2010)
Ash, T. (2010, April 14). The Four Pillars of Building Instant Trust Online. Retrieved April 16, 2010, from ClickZ: p://www.clickz.com
Floris is absolutely right. Mayer's theory about the importance of companies to appear trustworthy in order to create trust in consumers is still valid. After all, trust is perceived. It doesn't just exist. Therefore, companies have to make an effort to create and to earn trust.
However, with the emergence of social media and peer-to-peer communications, trust is no longer a direct two-way flow between the company and an individual consumer. The degree of trust can be influenced by online word-of-mouth passed around by many other consumers who have engaged in past transactions with the company. In other words, consumers these days trust other consumers who trust online companies. For instance, travelers turn to travel review websites such as TripAdvisor which offers advice and tips posted by other travelers, before they decide on which hotel to stay at or which attraction to visit. particular travel product/service.
Given this empowerment of consumers, companies have lesser control over the formation of trust. If bad reviews are given about their products, no matter how much they try to appear trustworthy, consumers who are convinced by these reviews will not trust in them. Therefore, these days, more consumer engagement efforts is required of companies besides having the 3 attributes - ability, benevolence and integrity - which Mayer claimed are important for trustworthiness.
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