Evaluating the Impact of the Determinants of E-commerce Customer Trust and Satisfaction
Introduction
Online shopping has become one of the commonly and broadly used channels in the internet fraternity for convenient shopping. Many websites are opening daily to meets the ever rising demands of comfort and convenience shoppers (Bin Dost, Illyas & Rehman, 2015). Online shopping is convenient way of shopping various items from various locations and a faster process. The digital economy driven by information technology introduced high speed internet connection as a convenient platform for online purchases and firms to interact (Bin Dost et al., 2013). The growth of the internet is viewed as the driving force to the increase in the use of e-commerce services globally in general and in Malaysia in particular. E-commerce websites have contributed to the wide access of products and services by local users that are also moving internationally (Sobihah, Mohamad, Mat Ali & Wan Ismail, 2015). E-commerce website is one of the important strategies in business today since it has raised the level of efficiency in organizations as well as contributed to country’s economy through service sector.
According to the Internet World Stats, there are over 1.5 billion internet users worldwide where this number is expected to rise with time. Researchers have indicated that all the internet users are potential customers to companies in e-commerce (Nguyen, 2014). According to Americo and Veronico (2018), e-commerce is growing globally at an average rate of 20 percent yearly while physical shops are struggling. The total share of e-commerce retail trade in 2016 was modest at 8.5% worldwide. The e-commerce has contributed greatly to most countries’ economies. In the United States, which is the world’s biggest consumer market amounted to 10% growth rate while Middle East countries growth rate was less significant amounting to less than 5% (Americo & Veronico, 2018). With the recent development of technology and onset of millennial, there is a growing number of buying products online. The increase in mobile phones in both developed and developing countries is likely to bring more consumers online. One of the benefits of e-commerce is to increase employment opportunities (Khan, 2016; Americo & Veronico, 2018). Moreover, e-commerce websites are accessible 24 hours and 365 days, which are easy to access with all related information, shopping without anxiety, time and space limits, and comparing of prices from different e-stores with no geographical distances (Irantaj & Huseynov, 2018).
Businesses not only exploit the benefits of e-commerce websites but also face certain challenges among them being maintaining customer trust and satisfaction with cultural diversity, various view points, demands and needs (Irantaj & Huseynov, 2018). In addition, many online retailers are facing challenges of exploiting maximum benefits from e-commerce due to hurdles such as trust and loyalty where risks and uncertainties may rise (Hidayat, Saifullah & Ishak, 2016). Eid (2011) revealed that at global level, customer loyalty is generally very strongly associated with the profitability and long-term growth of a firm. A small increase in customer retention rates significantly raises the profit of a firm. Loyal customers visit their esteemed e-commerce sites twice as often as non-loyal customers whereby also the loyal customers spend more money (Eid, 2011). Analysts indicated that 35 to 40% of e-commerce website sales revenue are contributed by repeat visitors (Eid, 2011). It is not surprising that customer loyalty has been a key factor to consider among e-commerce firms since the costs associated with acquiring new online customers are high and that the process could also be unprofitable. As a result, attracting and retaining customer attention for online shopping is not an easy task
Problem Statement
Despite the accrued benefits of e-commerce, companies have also faced certain challenges while using e-commerce websites. Companies have realized that ensuring customer satisfaction and building customer’s trust of e-commerce operations is not an easy task, which on the other and is an important task for the long-term growth of business (Nguyen, 2014). Previous research depicted that firms using e-commerce experienced difficulty in maintaining customer satisfaction and trust following the rapid growth of Business to Commerce e-commerce applications. E-commerce firms are certainly experiencing greater competitions due to the fact that on the internet a competitor is only a click away (Eid, 2011). In addition, consumers trust and loyalty of e-commerce use is being eroded by the rise of fraud and scam issues due to inadequate security and privacy as well as uncertainty of quality product delivery (Hidayat et al., 2016; Khan, 2016). Therefore, without a strong incentive for online shoppers to visit a website and without an anchor to motivate customers, e-commerce firms may struggle in retaining consumers in an increasingly competitive market.
Research Objective
The main objective of this study is to evaluate the determinants and their impact on e-commerce trust and satisfaction.
Research Questions
- Does website content quality determine e-commerce consumer trust and satisfaction?
- Does user-interface quality influence e-commerce trust and satisfaction?
- Does security and privacy have an effect on e-commerce consumer trust and satisfaction?
- Does customer service impact e-commerce consumer trust and satisfaction?
Literature Review
This section provides a detailed review of the literature regarding e-commerce, trust and satisfaction and determinants of customer trust and satisfaction. The literature is outlined to discuss the e-commerce concept, the discuss the concept of customer trust and satisfaction, discuss the determinants and the impact of e-commerce customer trust and satisfaction. The last section discusses the trends in e-commerce.
E-commerce
E-commerce are the electronic networks with the objective to simplify and fasten all phases of business processes that ranges from the production of goods to their sale and delivery (Hidayat et al., 2016). Irantaj and Huseynov (2018) is the process of carrying out commercial, governmental, and personal activities with the aid of electronic channels and telecommunications networks that includes a wide range of processes involving searching and sharing information and data exchange between two or more parties. Commercial activities are the processes that include buying and selling of products and services as well as banking transactions via the internet that maintains customer relationship without face to face meeting. Khan (2016) also viewed e-commerce as the process of buying and selling goods via the internet, compare prices, or analyze the latest products on offer before making purchase online or at a traditional store.
There are various types of e-commerce classified as business to business (B2B), business to customer (B2C), consumer to consumer (C2C), consumer to business (C2B) and intra-business/intra-organizational (Hidayat et al., 2016). The main focus of the study was the B2C and C2C e-commerce where the end customers are linked directly to the electronic media or website. E-commerce are significant as they enable buyers to have a clear advantage of the access to global market as well as get awareness about substitute products (Khan, 2016) E-commerce websites are considered as revolution in the business market where customers can compare the services of various e-commerce sites effectively. E-commerce and online shopping are used concurrently to illustrate the combination of electronic data change, electronic mail, and internet applications to exchange information (Ozdemir & Cam, 2016).
The e-commerce have significant benefits as it have reduced costs associated with accessing products from various geographical locations globally. The e-commerce platforms encourage non-cash payment as it enables the use of electronic fund transfer, debit and credit cards and various methods of electronic transfer (Vadwala & Vadwala, 2017). E-commerce systems are widely used by consumers since they are available 24 hours 7 days a week and provide excellent support services to consumers. E-commerce is used by marketers since they attract and target a great number of customers who majorly uses the internet. E-commerce systems are used to advertise wide range of products and also encourage better marketing management (Vadwala & Vadwala, 2017). Electronic commerce platforms are also encouraging improvement in communication by providing ways for faster, efficient and, reliable communication with customers. E-commerce platforms has enabled organizations locate more customers, suppliers and suitable business partners globally. They help in building the brand image of a company simplify business processes and reduce costs through digitalizing information (Vadwala & Vadwala, 2017). Paper-based process has been eliminated through e-commerce systems and supports pull type supply management where customers request are processed in within less period.
Customer Satisfaction
According to Vasic, Kilibarda and Kaurin (2019) customer satisfaction is the result of comparing the expectations and experience. Customer satisfaction involves the process through which a consumer is pleased when the delivery meets or exceeds their expectations. Hidayat et al. (2016) Defined customer satisfaction as the analysis of the perceived incompatibility between prior expectations and the actual performance of the product as perceived following its consumption. Satisfaction includes the psychological state arising from the condition when the emotion surrounding disconfirmed expectations is coupled with consumer’s prior feelings about the consumption experience. Irantaj and Huseynov (2018) also viewed customer satisfaction as the fulfilling response or optimistic outcome based on the event that products or services bought by a customer meet his/her expectations.
Customers are satisfied and have the intentions to repurchase an item if the perceived performance of a specific product or service is better than customer’s expectations. The repetitive purchases behaviors make a customer an excellent external marketer and loyal to related e-store which makes the profitability of a particular company increase (Irantaj & Huseynov, 2018). Satisfaction is achieved when customers conduct perceived evaluations based on their needs, wants, and expectations. Satisfaction is a key aspect in determining the success of the market construct execution. Satisfied customers are expected to make repeated and continuous purchases if the service provider reached or exceeded their expectations (Hidayat et al., 2016).
Trust
Customer trust is understood as the beliefs held by an online consumer regarding specific attributes of the e-supplier and the possible behaviors of the e-supplier in the future (Eid, 2011). Nguyen (2014) viewed trust as the willingness to take any risk in any type of relationships that is based on the positive expectation one has for another for any future actions. Brilliant and Achyar (2013) indicated that trust is the belief of a party that another party will carry out transactions according to the expectations of the prior party in uncertain circumstances. Customer trust in e-commerce is the willingness of a customer to trust and believe in an e-commerce website.
Trust encourages online purchases and significantly influences customer attitudes towards purchasing prom e-retailers. Consumer trust encourages loyalty in the purchase decisions that contributes to the ongoing process of continuing and maintaining a valued and important relationship (Eid, 2011). Trust is the most important element when it comes to online business environment where buyers and sellers are not able to make face to face interactions. In the business industry, trust is perceived as the belief or expectation of a consumer that a seller or vendor will keep his words or promises and that no harm will be done against the consumer in future (Nguyen, 2014). Vega (2015) depicted that trust from a business perspective arises when a buyer has to accept vulnerability based on the beliefs that transactions of the vendor aligns with the expectation of trust in a transaction in relation to the competition, integrity and benevolence of the vendor. If customers trust a website, they will depict commitment to use goods or services from an e-commerce website in the future.
User-interface Quality and Customer Trust and Satisfaction
According to Brilliant and Achyar (2013), user interface is the tangible aspect of e-commerce websites which depicts the interaction channel between customers and electronic service providers. User interface quality includes the website design that consists of organization and searchability and the ease of navigation. User-interface depicts the order that exists in an e-commerce website and also portrays the physical evidence of service provider’s competence (Brilliant & Achyar, 2013; Hidayat et al. 2016). Irantaj and Huseynov (2018) indicated that website design constitutes of the attributes in a website that depicts attractive and creative design offering customers simple search paths, uncluttered screens, appropriate content, and fast presentations that allows easier interaction between sellers and buyers. A good user interface saves customers from using much time to find products and minimizes mismatch of client search.
Brilliant and Achyar (2013) conducted a quantitative study to examine the determinants and their effect on satisfaction and trust among Indonesia e-commerce sites where they found out that user-interface quality do not have an effect on customer trust and satisfaction with regards to e-commerce sites. Hidayat et al. (2016) conducted a quantitative study to examine the determinants and impact of customer satisfaction and trust about e-commerce sites. The researchers found out that user-interface quality had a positive effect on customer trust and satisfaction. Irantaj and Huseynov (2018) conducted a quantitative study in Iran where they found out that website design had a positive effect on consumer satisfaction in e-commerce platform. A quantitative study conducted by Vega (2015) found out that there was significant difference between website quality and customer trust. Hidayanto, Herbowo, Budi and Sucahyo (2014) from their quantitative study indicated that there was a significant positive influence between website quality and the trust in using e-commerce.
Information Quality and Customer Trust and Satisfaction
Information quality is viewed as the customer’s perception of quality of product informations that are available in e-commerce websites. Information quality depicts the relevance, usefulness of the product information available in e-commerce sites (Brilliant & Achyar, 2013).
Brilliant and Achyar (2013) conducted a study and found out that information quality did not influence customer satisfaction but significantly influenced customer trust of e-commerce websites. Hidayat et al. (2016) through their quantitative study found out that information quality had a positive influence on customer satisfaction and trust with e-commerce websites. Vipushan and Janathanan (2018) conducted a quantitative study to examine the impact of service quality on customer satisfaction with e-commerce in Srilanka where service quality was based on web design, information quality, and trust. The findings from this study indicated that information quality had a positive impact on customer satisfaction. The information quality shapes the consumer decisions to purchase online and significantly influences their satisfaction based on well documented website. Lin, Wu, and Chang (2011) examined important factors and their impact on customer satisfaction with e-commerce in Taiwan where they found information quality have a positive effect on customer satisfaction with e-commerce. Similarly, a study conducted in Nepal by Sharma and Lijuan (2014) to determine effects of e-commerce service quality on customer satisfaction with e-commerce revealed that information quality positively contributed to customer satisfaction.
Privacy and Security and Customer Trust and Satisfaction
Customers are always concerned about the security of e-commerce websites that reflects the reliability of payment method, data storage, and data transmission. Customers are always concerned with their private information being accessed by third parties and they believe that their information will not be viewed and used by other parties. Privacy is perceived as the disclosure and storage of private information by third parties (Brilliant & Achyar, 2013).
Brilliant and Achyar (2013) conducted a quantitative study whereby their findings did not show a significant relationship between privacy and security and customer trust and satisfaction of e-commerce sites. Hidayat et al. (2016) conducted a study in Indonesia that revealed that security and privacy had a positive influence on customer satisfaction and trust. Website reliability and safe from invasion from breaches increases propensity to trust and makes clients more satisfied with the site. Vega (2015) also conducted a quantitative study that revealed a significant difference between security and privacy and customer trust. Hidayanto et al. (2014) conducted a quantitative study in Indonesia that depicted a significant relationship between privacy and security and customer satisfaction.
Customer Service and Customer Satisfaction and Trust
Customer service is defined by the quality of company’s representatives knowledge to respond to customer queries and questions. The company’s representatives are expected to explicitly describe the costs associated with different products and provide adequate support to clients that navigate through the website (Hidayat et al., 2016). Hidayat et al. (2016) through a quantitative study conducted in Indonesia found that customer service significantly influenced customer trust and satisfaction with e-commerce sites. Sharma (2017) conducted a quantitative study in Nepal to examine the relationship between satisfaction, loyalty, and service quality among e-commerce users. The findings indicated that customer service had a positive impact on customer satisfaction. The services such as technical, functional, temporal, and spatial dimensions given to a customer significantly increase customer satisfaction with e-commerce websites. Heri (2017) conducted a study to examine the role of service quality on customer satisfaction and customer trust. The findings from this study revealed that service quality of e-commerce websites had a significant positive relationship with customer satisfaction. Service quality was defined by responsiveness that depicted ability to help customers and provide services quickly, reliability of services and rendering the services accurately, assurance through polite and skillful support of customers, and empathy. The research findings indicated that providing customers with the appropriate support while making their purchases online is positively linked with the increase in customer satisfaction (Heri, 2017).
Trends in E-commerce and Online Shopping Behaviors
E-commerce and online shopping has been a trending issue in the marketing environment. There has been a rise in the electronic interactivity with consumers in the form of FAQs and emails. E-commerce have special features that guide consumers effectively to inquire about their shipments, ask about the prices, payments, products, and policies (Shanthi & Kannaiah 2015). E-commerce systems have been developed to provide sufficient information about a product to consumers such as merits and demerits of products that were absent from the traditional marketing or purchases methods. E-commerce service providers have made the payment methods easier for consumers by embedding online payments and merchants to e-commerce sites to make it easy to complete transactions (Shanthi & Kannaiah 2015). The use of e-commerce has enabled markets to gather consumer attitudes regarding various products through obtaining consumer reviews from the e-commerce sites. The e-commerce platforms have features that enables consumers to create individual profiles that enables them to access their accounts conveniently at any time or place. E-commerce service providers have their own delivery agents who aim to deliver products and services to consumer’s door step (Jukariya & Singhvi 2018).
E-commerce service providers are making it easier for online consumers by developing applications to conduct their purchases. The user of e-commerce applications enables consumers to make online purchases directly from their mobile phones (Akram, Hui, Khan, Yan & Akram, 2018). The payment methods used by consumers to pay e-commerce products has advanced by including credit cards, debit cards, money gram, and online money transfer merchants. E-commerce marketers aim to protect their consumers from security breaching by developing quality applications and using security measures to protect their consumers from vulnerability. The e-commerce systems have influenced many customers to shop online due to the variety, time, and convenience from e-commerce sites (Vaidya & Vaidya 2017).
Research Methodology
Introduction
Research methodology is the framework or a systematic process of undertaking research by employing distinct methods and techniques. The research method will describe the framework and procedure adopted to answer key research questions. The research methodology entails the research design, population and sampling, data collection procedures, and data analysis techniques.
Research Design
The research design is the strategy or technique used by researchers to describe the procedure of conducting a research. The research strategy used in this study is the quantitative method, which focuses on data collection from a large population and analyzes data without considering respondents emotions and feelings or environmental context. Quantitative design encourages objectivity in research process that enables the researcher to describe the data rather than to interpret the data (Rahi, 2017). Quantitative method is appropriate for conducting this study as it allows collection of numerical data and employ statistical methods to test the hypotheses. In addition, the study hypotheses were derived from the review of literature by evaluating various empirical studies (Castellan, 2010). Particularly, the survey design was used to guide the data collection process. Survey method was chosen as the strategy of the study since it allows collection of information from a sample of individuals based on their responses to questions. Survey methods encourage recruitment of instruments such as questionnaires that are used to collect large information to describe human behavior (Ponto, 2015). Particularly, the quantitative survey method will be employed to examine the determinants of e-commerce customer trust and satisfaction.
Population and Sampling
Population is the whole group of items or units a researcher wishes to study. The population may include objects or people. The population will include online customers from various e-stores located in the USA. Sampling is the process of selecting a segment of the population for investigation (Rahi, 2017). The sample includes a subset of the population. The sample will be selected using stratified random sampling that encourages dividing the population into strata (or subgroups) and a random sample is taken from each subgroup (Singh & Masuku, 2017). The sample taken from each subgroup maybe selected using simple random sampling. The sample significantly depends on the statistical power (Singh & Masuku, 2017). The power analysis will be used to select the sample size. According to McCrum-Gardner (2010), sample size depends on the power, effect size, and significance level. A statistical power of 0.95, effect size of 0.3 and significance level of 0.05 will be chosen, which gives a sample size of 110 customers. The stratified random sampling will involve selecting a proportionate sample from the strata. The sampling process will involve selecting 5 e-commerce sites or stores where the samples will be equally allocated. Each stratum will have 22 customers to be sampled.
Data Collection
Questionnaires will be used as the key instruments to collect the data. Questionnaires are selected as they are easier and quicker to administer. Particularly, web-based questionnaires will be employed to collect data. Web-based questionnaires are used to collect data since they improves data quality. Respondents can be alerted when they enter implausible or incomplete answers (van Gelder, Bretveld & Roeleveld, 2010). Data is entered electronically with minimal errors. The respondents will be identified through customer review/feedback or from social media based on e-commerce social network pages. The researcher will request the respondent’s emails and ensure anonymity to the respondents. The researcher will provide a detailed explanation for gathering the information and also link the process with the purpose of the study. The researcher will invite potential respondents to participate in the study by also including an informed consent depicting their anonymity and confidentiality. Survey monkey tool will be used as the platform to administer the questionnaire. The questionnaire will include close ended questions to capture key variables and answer the research questions. The key variables of the study are privacy and security, information quality, user-interface quality, and customer service/support which are the independent variables. The dependents variable will be customer trust and customer satisfaction.
Data Analysis
The data analysis procedures will include both descriptive and inferential statistics. The descriptive statistics will include the mean, standard deviations, and confidence intervals for continuous variables. For categorical variables, frequency distributions and graphical representations will be employed to describe the data. The inferential statistics will involve the use of regression analysis. The regression analysis will be used to answer the research questions as it encourages analyzing the effect of independent on dependent variables. Regression analysis also will encourage determining the cause and effect relationship (Gogtay, Deshpande & Tharte, 2017). The inferences will be made at 5% level of significance.
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