Consumer Trust in An E-Retailer: An Integrative Model Directed toward Customer Retention

Abstract

Trust is advocated as the single most important factor for consumers choosing an online supplier. To study trust mechanisms underlying consumer-e-retailer exchange relationship, this research takes a new perspective, a perspective directed toward customer retention. By bringing together three diverse approaches - trust literature, global evaluations theory, and transaction costs analysis, this study develops an integrative model of consumer trust in an e-retailer. Data for the study was collected using an online survey distributed via email to a national sample of 4,156 online consumers who were randomly drawn from a panel containing about 3 million people. Hypotheses were tested using structural equation modeling, multiple regression analysis, and multiple group analysis. Findings of the study imply that consumer trust in an e-retailer derives not only from a consumer's web experience but also from his/her experience outside the web. Specifically, a consumer's attitudes toward the key components of his/her entire online purchase experience (i.e., website design, fulfillment/reliability, privacy/security, and customer service) constitute the key drivers of consumer trust. Findings also indicate that trust is intrinsically beneficial. If a consumer trusts an e-retailer, he/she will come back in the future or even become loyal to the e-retailer. Further, findings suggest that though trust has a direct effect on future intentions and loyalty, part of its effect is conditional on its ability to reduce transaction costs. Additionally, findings of the study imply that as contextual factors, consumer dependence on an e-retailer confounds the effects of trust on future intentions and loyalty, and uncertainty surrounding online transacting environments moderates the effect of trust on future intentions. However, environmental uncertainty was not found to confound the effect of trust on loyalty. Finally, findings suggest that trust mechanisms underlying consumer-multi-channel e-retailer exchange relationship might be different from those underlying consumer-pure e-retailer relationship. Future research into this area is warranted.