Satisfaction, Trust and Commitment in Consumers= Relationships With Online Retailers

ABSTRACT - The purpose of this research was to explore how consumers perceive their relationships with online retailers. A conceptual framework was developed based on concepts from theories of social exchange, communication, and interpersonal relationships. A mail survey of a random, nationwide sample of 1,000 online shoppers was conducted in the U.S, with a 32% response rate. Nested regression techniques were used to test the hypotheses. The results showed that satisfaction and trust mediate the effects of perceived investments (communication, privacy, user-friendliness) by online retailers and consumers’ commitment to continue the relationship.

Citation:

Janet Wagner and Gabrielle Rydstrom (2001) ,"Satisfaction, Trust and Commitment in Consumers= Relationships With Online Retailers", in E - European Advances in Consumer Research Volume 5, eds. Andrea Groeppel-Klien and Frank-Rudolf Esch, Provo, UT : Association for Consumer Research, Pages: 276-281.

European Advances in Consumer Research Volume 5, 2001      Pages 276-281

SATISFACTION, TRUST AND COMMITMENT IN CONSUMERS= RELATIONSHIPS WITH ONLINE RETAILERS

Janet Wagner, University of Maryland, U.S.A.

Gabrielle Rydstrom, Barton-Cotton, Inc., U.S.A

ABSTRACT -

The purpose of this research was to explore how consumers perceive their relationships with online retailers. A conceptual framework was developed based on concepts from theories of social exchange, communication, and interpersonal relationships. A mail survey of a random, nationwide sample of 1,000 online shoppers was conducted in the U.S, with a 32% response rate. Nested regression techniques were used to test the hypotheses. The results showed that satisfaction and trust mediate the effects of perceived investments (communication, privacy, user-friendliness) by online retailers and consumers’ commitment to continue the relationship.

Online shopping is still in its infancy, currently accounting for 1-2% of all retail sales. However, the proportion of online to off-line sales is increasing (Harris Interactive, p. B6). In absolute terms, online sales to consumers are expected to increase from $38.8 billion in 2000 to $184.5 billion in 2004 ("B-to-C vs. B-to-B E-Commerce," 2000). The results of a recent national survey show that U.S. consumers are generally pleased with online shopping and plan to do more in the future (Ernst & Young 2000). Despite positive forecasts for growth in online shopping, its impersonal nature makes it difficult for online retailers to establish enduring relationships with consumers. A challenge for online retailers is how to build and maintain relationships with their customers in a shopping environment that is essentially self-service.

The purpose of this research was to explore how consumers perceive their relationships with online retailers. There were three basic research questions. First, what relational "investments" by online retailers engender consumer satisfaction and trust? Second, how do these investments foster consumer commitment to an online retailer? Finally, do satisfaction and trust mediate the relationship between the online retailer’s relational investments and consumer commitment?

In our model of the consumer’s relationship with the online retailer (see Figure), concepts are borrowed from social exchange theory, communication theory, and interpersonal investment theory. Relational investments by the online retailer, including communication, privacy, and "user-friendliness" of the Web site, were culled from the emerging literature on consumer perceptions of electronic retailing (Donthu and Garcia 1997; Ernst & Young 2000; Fram and Grady 1995; Hoffman, Novak and Peralta 1999). Relational outcomes of trust, satisfaction, and commitment were derived from the well-established relationship marketing literature (Moorman, Deshpande and Zaltman 1992; Morgan and Hunt 1994; Oliver 1997). As explained in the next section, we propose investments by the online retailer directly affect consumers’ trust (the cognitive outcome) and satisfaction (the attitudinal outcome). Trust and satisfaction affect commitment (the behavioral outcome), and mediate the effect of relational investments on commitment.

LITERATURE REVIEW

Relationships are based on the ongoing exchange of valued resources by partners. In social exchange theory, a resource is defined as anything that provides pleasure and satisfaction (Bagozzi 1975; Holbrook 1999). In theories of interpersonal relationships, resources represent investments in building and maintaining relationships (Rusbult 1980; Rusbult and Farrell 1983). Consumers are more likely to develop relationships with online retailers they perceive to have invested resources in meeting their needs. Outcomes of such investments include relational characteristics such as consumer satisfaction (Altman and Taylor 1973), trust (Foa and Foa 1976), and commitment (Rusbult 1980; Rusbult and Farrell 1983). Because online retailing is so new, the nature of relationships between consumers and online retailers has received little research attention.

Relational Outcomes: Satisfaction, Trust and Commitment

Satisfaction is defined as "pleasurable fulfillment," a positive affective state (Oliver 1997). It is a key concept in social exchange theory, and is well-established as an outcome of successful relationships in business-to-business and business-to-consumer marketing (Geyskens et al. 1996; Oliver and Swan 1989). To increase consumer satisfaction, organizations invest in resources. If consumers perceive that resources provided by an online retailer meet their needs, satisfaction should result (Oliver 1997). If consumers perceive that needed resources are delivered on a predictable basis, they should develop trust in the organization.

Trust is an individual’s belief that an exchange partner will deliver desirable resources in a predictable manner (Foa and Foa 1976). Trust has received little attention in the consumer behavior literature. [A notable exception is the recent work of Garbarino and Johnson (1999), albeit in a different context.] Customers trust organizations when they perceive them to be making investments that reduce uncertainty, increase efficiency, and improve the effectiveness of their relationships (Gutek 1997). In business-to-business marketing, trust is considered an antecedent of commitment, and an essential feature of successful relationships (Morgan and Hunt 1994).

Commitment is defined as the intention to continue a relationship because it is worthwhile (Moorman, Zaltman and Deshpande 1992). Consumers who perceive that the online retailer is investing resources in meeting their needs should consider the relationship important and should be more likely to continue the relationship. Commitment has both affective and cognitive components (Geyskens et al. 1996), so it should be influenced by both satisfaction and trust.

Relational Investments: Communication, Privacy and User Friendliness

Surveys of online consumers show that resources they value in relationships with online retailers include information, privacy, and the "user friendliness" of the Web site (Donthu and Garcia 1997; Ernst & Young 2000; Fram and Grady 1995; Hoffman, Novak and Peralta 1999).

Communication, the provision of relevant and timely information to the consumer, is essential in any marketing relationship (Berry and Cooper 1992; Dwyer, Schurr and Oh 1987). It plays a dual role. First, it ensures the consumer has information with which to make decisions. Second, it serves as a vehicle for interaction between exchange partners (Dwyer, Schurr and Oh 1987). For relationships between online retailers and consumers to flourish, communication must be two-way. Online retailers must provide relevant and timely information, and consumers must be willing to provide personal information for online retailers to use in customizing the shopping experience.

Privacy, as perceived by online consumers, includes the protection of personal information they provide, including credit card security (Fram and Grady 1995; Hoffman, Novak, and Peralta 1999). In communication theory, self-disclosure C willingness to reveal personal information to another party C is fundamental to the development of relationships (Altman and Taylor 1973; Taylor and Altman 1980). Self-disclosure is predicated on the assumption that personal information will be held in confidence by the recipient. Consumers believe that if they are willing to share personal information, the retailer is obligated to respect and protect their privacy. If consumers perceive that an online retailer protects their personal information, they should be pleased (see Oliver 1997), and should be more satisfied with the relationship. They should also be more trusting of the online retailer, because the perception of privacy reduces the uncertainty associated with self-disclosure.

FIGURE 1

MODEL OF TRUST, SATISFACTION AND COMMITMENT IN CONSUMER RELATIONSHIPS WITH ONLINE RETAILERS

User-friendliness is the ease or enjoyment the consumer experiences shopping with an online retailer. In surveys of Internet shoppers, consumers identify elements of user-friendliness, including ease of site navigation and transaction completion as important aspects of the online shopping experience (Donthu and Garcia 1999; Ernst & Young 2000; Maignan and Lukas 1997). User friendliness implies that the online shopping experience pleases the consumer, thereby increasing satisfaction with the online retailer. User friendliness also implies a more efficient and effective shopping experience, which should build trust and enhance commitment.

HYPOTHESES

In this section, we propose three sets of hypotheses. The first set, which includes Hypotheses 1-3, addresses the effects of relational investments on consumers’ satisfaction with, trust in, and commitment to the online retailer. The second set, which includes Hypotheses 4 and 5, deals with the effects of satisfaction and trust on commitment. The third set, which includes Hypotheses 6-8, deals with the mediating effects of satisfaction and trust.

Satisfaction should be a positive function of consumers’ perceptions of the relational investments of the online retailer. If communication from the online retailer contains relevant information received in a timely manner, consumers should be pleased. Similarly, if consumers perceive that personal data and credit card information are safe and secure, they should be pleased by the fact that the potential for an unpleasant experience has been reduced. Finally, perceived user-friendliness should increase satisfaction, because consumers enjoy the shopping experience more.

H1: Satisfaction is a positive function of consumers’ perceptions of a) communication, b) privacy, and c) user-friendliness.

Trust should also be a positive function of perceptions of relational investments. If consumers perceive that communication is predictable and contains useful information, their trust in the online retailer should be higher. The perception that personal information is held in confidence should reduce uncertainty associated with the online shopping experience, thereby increasing trust. Perceived user-friendliness should build trust, because the shopping experience will be seen as more efficient and effective.

H2: Trust is a positive function of consumers’ perceptions of a) communication, b) privacy, and c) user-friendliness.

Commitment should also be a positive function of perceived relational investments. The online retailer’s investments in meeting consumers’ needs should be perceived as increasing the worth of the relationship. Therefore, commitment to continuing the relationship should be higher.

H3: Commitment is a positive function of consumers’ perceptions of a) communication, b) privacy, and c) user-friendliness.

Both satisfaction and trust should increase consumers’ commitment to the online retailer. If consumers are satisfied with an online retailer, they should find the relationship pleasing and worth continuing. The effect of satisfaction on commitment per se, has not been studied. Rather, researchers have focused on related variables. For example, in business-to-business marketing, satisfaction has been shown to affect long-term orientation (Geyskens et al. 1998). Recent conceptual work in business-to-consumer marketing suggests satisfaction should affect loyalty (Oliver 1997; 1999). If consumers trust the online retailer, they should find the relationship predictable, efficient and effective. This implies that the relationship is worthwhile, so commitment should be higher.

H4: Commitment to the online retailer is a positive function of satisfaction.

H5: Commitment to the online retailer is a positive function of trust.

Both satisfaction and trust should mediate the effect of perceived investments on commitment to the online retailer. The mediating effect of satisfaction is suggested in recent conceptual work on consumer loyalty (Oliver 1999). Satisfaction should mediate, because it is consumers’ response to the pleasurable fulfillment of needs. If needs are fulfilled satisfactorily, the consumer should be more committed to the relationship with the online retailer. Trust should also mediate. As a "psychological contract" between the consumer and the online retailer, it captures perceptions that relational investments make the shopping experience more efficient and effective, and therefore, more worthwhile.

H6: Satisfaction will mediate the effect of perceived investments on commitment to the online retailer.

H7: Trust will mediate the effect of perceived investments on commitment to the online retailer.

Finally, trust should mediate the effect of satisfaction on commitment to the online retailer. A shopping experience that meets the consumer’s needs should contribute to the perception that the relationship with the online retailer is effective and worth continuing.

H8: Trust will mediate the effect of satisfaction on commitment to the online retailer.

METHOD

The survey was mailed to a nationwide sample of 1,000 online shoppers, whose addresses were purchased from a commercial broker. In addition to the two-page survey questionnaire, subjects received a personalized cover letter explaining the purpose of the survey, and a postage-paid, pre-addressed envelope. The cover letter explained that the results would be used for educational purposes. Respondents were offered a summary of the results, and given two weeks in which to respond.

The questionnaire had three sections. The first section contained questions on the respondent’s online purchasing activities, including type of product purchased most recently, number of online purchases in the last year, and an open-ended question about what was liked or disliked about the online shopping experience. The second section included measures of the major constructs, including relational investments by the online retailer, and the relational outcomes of trust, satisfaction, and commitment. The third section had questions on the respondents’ demographic characteristics, such as age, gender, education, and annual household income.

Unless otherwise noted, the constructs were measured using 5-point, multiple item Likert scales, which were anchored "disagree/agree." For each construct, items were summed and averaged to create an index. Perceived relational investments of the online retailer included communication, privacy, and user friendliness. The communication scale, which was adapted from Morgan and Hunt (1994), included three items: "Informs me of new products," "Informs me of special discounts," and "Informs me quickly of my order confirmation." The privacy scale included items borrowed from Hoffman et al. (1999), which were, "Will not sell my personal information to other businesses," "Is not a legitimate business" (reverse coded), and "Is safe to give credit card information to." A scale for user friendliness was developed by the researchers, and included the following items: "Web site provides useful descriptions," "Web site is easy to use," and "Web site is enjoyable to order from."

Satisfaction and trust were expected to mediate the effects of the relational investments on consumers’ commitment to online retailers. The measure of satisfaction was borrowed from the work of Oliver and Swan (1989). It was treated as a 4-item, bipolar scale. Consumers were asked, on a scale of 1-5, how they felt about the online retailer they were evaluating. The anchors were: pleased/displeased, sad/happy, contented/disgusted (reverse coded), and dissatisfied/satisfied. The measure of trust was adapted from Doney and Cannon (1997) and (Garbarino and Johnson 1999). Items included, "I am confident I will get what I ordered," "Products always meet my expectations," "Can be trusted to deliver a good product," "Is a reliable online shopping resource," and "Merchandise is of consistently high quality."

The dependent variable was commitment, the measure of which was adapted from Morgan and Hunt (1994). Items included, "I consider myself a loyal customer," "I plan to purchase in the future," and "I care about the long-term success of this retailer."

RESULTS

Descriptive Statistics

Respondents reported a mean age of 41 years. The majority were female (52%), well-educated (68% > a college degree) and from above-average income (67% > $50,000) households. Books (25%) and electronics (16%) were reported as the product categories purchased most frequently. A majority of respondents (61%) reported having made four or more online purchases in the past year. The profile of our respondents is comparable to that of respondents to a recent survey of U.S. online shoppers by Ernst & Young (2000).

Hypotheses Tests

The model to be estimated is presented in the Figure. The endogenous variables in the model were three relational investments of the online retailer C communication, privacy, and user friendliness. The exogenous variables were the consumer’s satisfaction with, trust in, and commitment to the online retailer. A series of nested regression models were used to test the hypotheses. The results are presented in Table 1. All models were significant, as shown by the F-values. The adjusted R-squared values ranged from 0.33 (Model 2) to 0.531 (Model 7).

Satisfaction with the online retailer was positively affected by perceptions of the online retailer’s communication and user friendliness, but not privacy (Model 1). This result supports H1a and H1c, but not H1b. Trust in the online retailer was positively affected by perceived communication, user-friendliness, and privacy (Model 2). This result supports H2a-c. Consumers’ perceptions of communication, user-friendliness, and privacy were all positively related to commitment to the online retailer (Model 3), supporting H3a -c.

Both satisfaction and trust were positively related to consumers’ commitment to continue to shop with an online retailer (Model 4). This result supported H4 and H5. Satisfaction fully mediated the effect of communication on commitment, as shown by comparing Model 5 to Model 3. [In Model 3, communication affects commitment. In Model 5, satisfaction is added to the equation, and the effect of communication on commitment disappears.] It did not mediate the effects of either user-friendliness or privacy on commitment, however. Thus, H6 was supported with respect to communication only. Trust also partially mediated the effects of privacy and user-friendliness on commitment, as shown by comparing Model 6 to Model 3. [In Model 6, trust is added to the equation tested in Model 3. The significance levels of privacy and user-friendliness are reduced.] Thus, H7 was partially supported, with respect to privacy and user-friendliness. Trust partially mediated the effect of satisfaction on commitment, as shown by comparing Model 7 to Model 5. So H8 was partially supported.

TABLE 1

RESULTS OF ANALYSIS OF ONLINE SHOPPING EXPERIENCE (n=302)

TABLE 2

OPEN-ENDED COMMENTS ON ATTRIBUTES OF ONLINE SHOPPING

Control variables of age (a continuous variable), purchase category (electronics), and number of purchases (coded as a dummy variable: four or more = 1; otherwise = 0) were included in the models. In Models 4-7, age was positively related to commitment to continue shopping with the online retailer. Older consumers were more committed than younger consumers. Number of purchases was negatively related to commitment. Consumers reporting our or more purchases were less committed than consumers who reported fewer than four purchases.

Analysis of Open-ended Comments

Respondents were asked to describe what they liked and disliked about the online shopping experience. The open-ended comments were coded as positive or negative, and are shown in Table 2. The attribute of the online shopping experience mentioned most often was convenience, followed by price. Other attributes frequently mentioned were product, navigation, service, deliver, and speed of transactions. Of the 507 comments, the vast majority (466) were positive.

DISCUSSION

In this research, we explored the effect of perceived relational investments by online retailers on consumer satisfaction, trust and commitment. By integrating concepts from social exchange theory and theories of interpersonal relationships, with the results of research in relationship marketing and services marketing, we developed a model of how consumers perceive their relationships with online retailers.

Consumer satisfaction is enhanced when consumers perceive that the online retailer has invested in resources fulfilling the need for information (communication) and convenience (user-friendliness) in the shopping experience. Contrary to expectations, satisfaction was not increased by perceived privacy. For experienced online shoppers, such as those in our sample, privacy may be considered a "hygiene" factor B a factor noted by consumers only when it is missing C thereby explaining its failure to affect satisfaction (Oliver 1997). The relative magnitudes of the standardized coefficients suggest that both communication and user-friendliness have strong effects on satisfaction with the online retailer (See Model 1).

Consumers’ trust in the online retailer was positively related to communication, privacy, and user-friendliness. The effect of communication on trust is consistent with previous research, albeit in a business-to-business context (Anderson and Narus 1990; Doney and Cannon 1997; Morgan and Hunt 1994). However, the effects of privacy and user-friendliness on trust represent new findings. Perceived privacy reduces the uncertainty associated with providing personal data to the online retailer. User-friendliness enhances the perception that the relationship with the online retailer is efficient and effective. The magnitudes of the standardized coefficients suggest that of the three perceived investments, use-friendliness is most important in increasing consumers’ trust in the online retailer (See Model 2).

Consumers’ perceptions of relational investments also affected commitment to the online retailer. Of the three, user-friendliness appear to dominate (see Model 3). Satisfaction mediates the effect of communication on commitment to the online retailer. The significant effect of communication on commitment was eliminated when satisfaction was included in the model (see Model 5 vs. Model 3). Apparently, satisfaction captures consumers’ perceptions that their need for information is being met (Oliver 1997). Trust is a partial mediator of the effects of privacy and user-friendliness on commitment to the online retailer. The significant effects of privacy and user-friendliness on commitment were reduced, but not eliminated, when trust was included in the model (see Model 6 vs. Model 3). Trust appears to capture some, but not all, of the effects of predictability and efficiency in the relationship with the online retailer.

LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH

This research has limitations that suggest directions for future research. First, the perceived relational investments were limited to communication, privacy, and user-friendliness. The results of recent surveys of online shoppers, as well as the results of our own research (see Table 2), suggest that perceived relational investments should be explored with respect to online retailers’ delivery, pricing practices, and product quality. Second, the relational outcomes were limited to satisfaction, trust, and commitment. While these are well-established outcomes, consumer value is emerging as an additional outcome of interest in relationship marketing (Holbrook 1999). Finally, the analysis is static in nature. An emerging area of research is dynamic modeling of consumer perceptions (Bolton and Drew 1991). As consumer online shopping evolves, it would be interesting to explore the relationships between consumers and online retailers in the context of a dynamic model.

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