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Article Excerpt
Abstract
A separate and distinct interaction with both the actual e-vendor and with its IT Web site interface is at the heart of online shopping. Previous research has established, accordingly, that online purchase intentions are the product of both consumer assessments of the IT itself--specifically its perceived usefulness and ease-of-use (TAM)--and trust in the e-vendor. But these perspectives have been examined independently by IS researchers. Integrating these two perspectives and examining the factors that build online trust in an environment that lacks the typical human interaction that often leads to trust in other circumstances advances our understanding of these constructs and their linkages to behavior.
Our research on experienced repeat online shoppers shows that consumer trust is as important to online commerce as the widely accepted TAM use-antecedents, perceived usefulness and perceived ease of use. Together these variable sets explain a considerable proportion of variance in intended behavior. The study also provides evidence that online trust is built through (1) a belief that the vendor has nothing to gain by cheating, (2) a belief that there are safety mechanisms built into the Web site, and (3) by having a typical interface, (4) one that is, moreover, easy to use.
Keywords: E-commerce, trust, TAM, familiarity, cognition-based trust, trust building processes, Net-enhanced B2C systems ISRL Categories: GB02, GB03, GB07
Introduction
Retaining customers is a financial imperative for electronic vendors (e-vendors), especially as attracting new customers is considerably more expensive than for comparable, traditional, bricks-and-mortar stores (Reichheld and Schefter 2000). What, then, makes customers return to an e-vendor? Research has used many avenues to look at this, including explanations based on trust (Gefen 2000; Jarvenpaa et al. 1998; Jarvenpaa and Tractinsky 1999; McKnight et al. 2000), technology (e.g., Lederer et al. 2000; Lee et al. 2001), and, to a lesser extent, on individual differences such as demographics and lifestyle (e.g., Bellman et al. 1999).
Recognizing that a vital key to retaining these customers is maintaining their trust in the e-vendor (Reichheld and Schefter 2000) and that trust is at the heart of relationships of all kinds (Mishra and Morrissey 1990; Morgan and Hunt 1994), this study examines customer trust as a primary reason for why customers return to an e-vendor. However, unlike the vendor-client relationship in traditional business settings, the primary interface with an e-vendor is an information technology (IT), a Web site. Recognizing the dual nature of this interaction, our study incorporates the perceived technological attributes of the IT as an additional set of explanatory variables in understanding why customers return to an e-vendor.
This inseparable but complementary aspect of an e-vendors Web site-an IT, on the one hand, and a vendor with whom the customer conducts business, on the other--is reflected in the empirical research that identifies these as two antecedents in the nomological network leading to consumer behaviors like making a purchase, namely (1) the technological attributes of the Web site, and (2) consumer trust in the e-vendor. The first school of thought considers a Web site to be an information technology, and as such argues that the same use-antecedents that apply across IT, namely perceived usefulness and perceived ease-of-use as identified by TAM (Davis 1989; Davis et al. 1989), apply here as well (Gefen and Straub 2000; Lederer et al. 2000; Lee et al. 2001). Even though TAM is the dominant model, other studies in this vein have extended TAM with constructs such as computer playfulness (e.g., Moon and Kim 2001), cognitive absorption (e.g., Agarwal and Karahanna 2000), and product involvement and perceived enjoyment (K oufaris 2002). Still other research has focused on Web design and has developed models and measures of perceived Web quality and usability (e.g., Agarwal and Venkatesh 2002; Aladwani and Palvia 2002; Loiacono 2000; Palmer 2002; Ranganathan and Ganapathy 2002; Torkzadeh and Dhillon 2002) as predictors of consumer acceptance. This stream of research identified a wide range of factors including download delay, navigability, information content, interactivity, response time, Web site personalization, Internet shipping errors, convenience, customer relations, informational fit to task, intuitiveness, and visual appeal.
The second school of thought focuses on online purchase as an interaction with a vendor, where, extrapolating from other business transactions (Fukuyama 1995; Morgan and Hunt 1994), trust should be the defining attribute of the relationship, determining its very existence and nature, even beyond economic factors such as cheaper price (Reichheld and Schefter 2000). This is especially true when an activity involves social uncertainty and risk (Fukuyama 1995; Luhmann 1979). Social uncertainty and risk with an e-vendor are typically high because the behavior of an e-vendor cannot be guaranteed or monitored (Reichheld and Schefter 2000). Similarly, several other studies in this school have focused on trust as a reducer of risk among inexperienced online customers and as a reducer of social uncertainty (e.g., Gefen 2000; Jarvenpaa and Tractinsky 1999; Jarvenpaa et al. 2000), on familiarity and trust (e.g., Gefen 2000), on seals of approval or privacy policy statements (McKnight et al. 2000; Palmer et 21.2000), and on affiliations with respectable companies (e.g., Stewart 1999). Accordingly, the first objective of this research is to integrate trust-based antecedents and the technological attribute-based antecedents found in TAM into a theoretical model.
Trust is generally crucial in many of the economic activities that can involve undesirable opportunistic behavior (Fukuyama 1995; Luhmann 1979; Williamson 1985). This is even more the case with e-commerce because the limited Web interface does not allow consumers to judge whether a vendor is trustworthy as in atypical, face-to-face interaction (Reichheld and Schefter 2000). Moreover, trust is also an issue because vendors can easily take advantage of online consumers (Jarvenpaa and Todd 1997; Jarvenpaa and Tractinsky 1999). The recent case of Amazon.com sharing its database of customer activity (Rosencrance 2000a, 200Gb) is a good demonstration of the kind of undesirable, yet legal, opportunistic behavior to which online customers are exposed, and hence the need for maintaining and constantly rebuilding their trust. Examining how customer trust can be maintained in an e-vendor is, accordingly, the second primary objective of this study.
Literature Review and Research Model
Given that a Web site is both an IT and the channel through which consumers interact with an e-vendor, technology-based and trust-based antecedents should work together to influence the decision to partake in e-commerce with a particular e-vendor. This section elaborates on the theory base and derives the hypotheses. The research model is depicted in Figure 1.
TAM and E-Commerce
A Web site is, in essence, an information technology. As such, online purchase intentions should be explained in part by the technology acceptance model, TAM (Davis 1989; Davis et al. 1989). This model is at present a preeminent theory of technology acceptance in IS research. Numerous empirical tests have shown that TAM is a parsimonious and robust model of technology acceptance behaviors in a wide variety of IT (for a summary of this literature, see Gefen and Straub 2000), across both levels of expertise (Taylor and Todd 1995b), and across countries (e.g., Rose and Straub 1998; Straub et al. 1997). Even though considerable TAM research has examined IT acceptance in the context of work-related activity, the theory is applicable and has been successfully applied to diverse non-organizational settings (e.g., Agarwal and Karahanna 2000; Davis et al. 1989, 1992; Mathieson 1991; Sjazna 1994), including e-commerce (Gefen and Straub 2000; Gefen et al. 2000; Lederer et al. 2000; Lee et al. 2001). According to TAM, th e intention to voluntarily accept, that is to use, a new IT is determined by two beliefs dealing with (1) the perceived usefulness (PU) of using the new IT and (2) the perceived ease of use (PEOU) of the new IT. PU is a measure of the individual's subjective assessment of the utility offered by the new IT in a specific task-related context.2 PEOU is an indicator of the cognitive effort needed to learn and to utilize the new IT. TAM has been discussed in great detail in previous research (e.g., Gefen and Straub 2000; Venkatesh and Davis 2000). (3, 4)
As shown in previous research (Gefen et al. 2000), we hypothesize that paths predicted by TAM apply also to e-commerce. As in previous TAM studies, the underlying logic is that IT users (in this case, online customers using a Web site) react rationally when they elect to use an IT. The more useful and easy to use is the Web site in enabling the users to accomplish their tasks, the more it will be used:
[H.sub.1]: PU will positively affect intended use of a business-to-consumer (B2C) Web site.
[H.sub.2]: PEOU will positively affect intended use of a business-to-consumer (B2C) Web site.
[H.sub.3]: PEQU will positively affect PU of a business-to-consumer (B2C) Web site.
The Importance of Trust in E-Commerce
An e-vendor is, of course, more than its IT interface. It is a business entity with whom the customers are economically engaged. Trust is crucial in many such transactional, buyer-seller relationships, especially those containing an element of risk, including interacting with an e-vendor (Reichheld and Schefter 2000). Trust is an expectation that others one chooses to trust will not behave opportunistically by taking advantage of the situation. It is one's belief that the other party will behave in a dependable (Kumar et al. 1995a), ethical (Hosmer 1995), and socially appropriate manner (Zucker 1986). Trust deals with the belief that the trusted party will fulfill its commitments (Luhmann 1979; Rotter 1971) despite the trusting party's dependence and vulnerability (Meyer and Goes 1988; Rousseau et al. 1998). Accordingly, trust is vital in many business relationships (Dasgupta 1988; Fukuyama 1995; Gambetta 1988; Gulati 1995; Kumar et al. 1995b; Moorman et al. 1992; Williamson 1985) and actually determines the nature of many businesses and the social order (Blau 1964; Fukuyama 1995; Luhmann 1979). (5)
Because of the absence of proven guarantees that the e-vendor will not engage in harmful opportunistic behaviors, trust is also a critical aspect of e-commerce (Gefen 2000; Kollock 1999; Reichheld and Schefter 2000). Such behaviors include unfair pricing, conveying inaccurate information, violations of privacy, unauthorized use of credit card information, and unauthorized tracking of transactions. Indeed, some researchers have suggested that online customers generally stay away from e-vendors whom they do not trust (Jarvenpaa and Tractinsky 1999; Reichheld and Schefter 2000).
Trust is a central aspect in many economic transactions because of a deep-seated human need to understand the social surroundings, that is, to identify what, when, why, and how others behave. Needless to say, comprehending the social environment is remarkably complicated because people, by their very nature, are free agents and as such their behavior is not necessarily rational or predictable. The combination of such overpowering social complexity with the inherent need to understand others leads people to adopt an assortment of social complexity reduction strategies. When a social environment cannot be regulated through rules and customs, people adopt trust as a central social complexity reduction strategy (Luhmann 1979). By trusting, people reduce their perceived social complexity through a belief that may, at times, be irrational, and that rules out the risk of undesirable but possible future behaviors on the part of the trusted party (Luhmann 1979).
The same argument also holds with the Internet. Lacking effective regulation, consumers have to trust the e-vendor from which they purchase, assuming, in reality, that the e-vendor will be ethical and behave in a socially suitable manner, or else the overwhelming social complexity will cause them to avoid purchasing (Gefen 2000). Previous research supports this relationship, showing that trust increases purchase intentions both directly (Gefen 2000), as it does in other buyer-seller relationships (Ganesan 1994), and through reduced perceived risk (Jarvenpaa and Tractinsky 1999; Kollock 1999). In the words of Reichheld and Schefter (2000): "Price does not rule the Web; trust does" (p. 107).
What Is Trust in E-Commerce?
Trust has been conceptualized by previous research in a variety of ways, both theoretically and operationally, and researchers have long acknowledged the confusion in the field (e.g., Lewis and Weigert 1985b; McKnight et al. 1998; 2002; Shapiro 1987). Table 1 provides a summary of prior conceptualizations of trust along with the measures used to operationalize the construct. As the table shows, researchers view trust as (1) a set of specific beliefs dealing primarily with the integrity, benevolence, and ability of another party (Doney and Cannon 1997; Ganesan 1994; Gefen and Silver 1999; Giffin 1967; Larzelere and Huston 1980), (2) a general belief that another party can be trusted (Gefen 2000; Hosmer 1995; Moorman et al. 1992; Zucker 1986), sometimes also called trusting intentions (McKnight et al. 1998) or "the 'willingness' of a party to be vulnerable to the actions of another" (Mayer et al. 1995, p. 712), (3) affect reflected in "'feelings' of confidence and security in the caring response" of the other p arty (Rempel et al. 1985, p. 96), or (4) a combination of these elements.
Some researchers have combined the first two conceptualizations into one construct (Doney and Cannon 1997). Other researchers have split the first two conceptualizations, declaring the specific beliefs as antecedents to the general belief (Jarvenpaa and Tractinsky 1999; Mayer and Davis 1999; Mayer et al. 1995), sometimes naming the specific process beliefs as trustworthiness (Jarvenpaa and Tractinsky 1999) and sometimes conceptualizing the specific beliefs as antecedents to trusting intentions (McKnight et al. 1998). This latter stream of work, which is an effort to remove some of the conceptual confusion in the trust field, builds on the social psychology paradigm (specifically, the theory of reasoned action; see Fishbein and Ajzen 1975) that has a long tradition of separating beliefs from intended behavior.
The same diversity in trust conceptualizations is also evident in e-commerce contexts. Trust has been conceptualized as a general belief in an evendor that results in behavioral intentions (Gefen 2000); as a combination of trustworthiness, integrity, and benevolence of e-vendors that increases behavioral intentions through reduced risk among potential but inexperienced consumers (Jarvenpaa and Tractinsky 1999); as beliefs in integrity, benevolence, and ability that lead to a general belief in trust (Jarvenpaa et al. 1998); or as specific beliefs in competence, integrity, and benevolence that lead to trusting intentions (McKnight et al. 2002).
The distinction between trust as a set of specific beliefs and trust as a general belief has been made primarily in studies dealing with interpersonal interactions, such as those occurring within an organization (e.g., Mayer et al. 1995; McKnight et al. 1998). However, in ongoing economic transactional settings, such as those between buyers and sellers (e.g., Crosby et al. 1990; Doney and Cannon 1997; Ganesan 1994; Schurr and Ozanne 1985), this distinction is seldom articulated. A possible reason for why this distinction between trusting intentions and specific beliefs is not made with respect to economic transactions is that the very nature of trust in these transactions is an extension, rather than direct implementation of the original definition of interpersonal trust (Hosmer 1995). The key to successful economic transactions is avoiding opportunistic behavior (Hosmer 1995; Williamson 1985), unlike interpersonal trust where trust serves more to solidify social relationships (Blau 1964). Consequently, some researchers claim that actual behavior in ongoing economic alliances is a proxy for trust, defined in that context as confidence or an overall belief (e.g., Gulati 1995).
With such distinctions in mind, the current study has adopted the conceptualization of trust as a set of specific beliefs. Our definition relies on separation between trust and actual behavioral intentions in the ongoing economic relationship of customers and e-vendors. This conceptualization is akin to that of other studies dealing with ongoing economic relationships (Crosby et al. 1990; Doney and Cannon 1997; Ganesan 1994; Gefen 2002b; Schurr and Ozanne 1985), including those with e-vendors (Jarvenpaa et al. 2000). Furthermore, the separation between beliefs and behavior is consistent with the theoretical foundations of TAM in social psychology (i.e., the theory of reasoned action) and allows for a theoretically sound integration of the two streams of research. Based on previous studies dealing with buyer-seller and business interactions, this set of specific beliefs includes integrity, benevolence, ability, and predictability, which together comprise the most widely used specific beliefs in the literature (see in Table 1 for details). Trust as a feeling (Rempel et al. 1985, p. 96) has been previously studied in the context of interpersonal relationships, such as friendship and love. It is arguably irrelevant to a business transaction.
Trust Consequents
Based on prior work, it is hypothesized that heightened levels of trust, as specific beliefs about the e-vendor, are also associated with heightened levels of intended use. As in other commercial activities, interaction with a vendor requires the online consumer to deal with the social complexity embedded in the interaction and to take psychological steps to reduce it. Trust is a significant antecedent of participation in commerce in general, and even more so in online settings because of the greater ease with which vendors can behave in an opportunistic manner (Reichheld and Schefter 2000). Trust helps reduce the social complexity a consumer faces in e-commerce by allowing the consumer to subjectively rule out undesirable yet possible behaviors of the evendor, including inappropriate use of purchase information. In this way trust encourages online customer business activity.
Trust should also increase certain aspects of the perceived usefulness of a Web site. The usefulness of a Web site depends on both the effectiveness of its relevant technological properties, such as advanced search engines, and on the extent of the human service behind the IT, which makes the non-technological aspects of the IT effective. Viewed in this manner, the benefits of a Web site can be classified as benefits relating to the current activities, such as the usefulness of the technology itself, and to benefits relating to future benefits, such as getting the items that were ordered. Regarding the longer term benefits, trust should increase the perceived usefulness of the interaction through the Web site by increasing the ultimate benefits, in this case getting the products or services from an honest, caring, and able vendor, as expected. This ties into the dual nature of a...
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