DSpace at VNU: Trust and Customer Satisfaction in Online Shopping: A Study in Vietnam

Thus, based on the above discussion, we propose the following hypotheses: Hypothesis I H I: Distributive fairness positively influences trust in online shopping.. Hypothesis 2 H2: Distr

TRUST AND CU STO M ER SA TISFA C TIO N IN ONLINE

SHOPPING: A STUDY IN V IETN A M

Nguyen Tlti Tuyet M ai - Nil am Phong Tuan

1 Introduction

The appearance o f the Internet has being paving the way for the rapid growth

of electronic commerce (e-commerce) The economy and transaction methods turn

to the new paee since the high-technology systems are exploited into applications Finding partners and customers is not limited by the borders o f countries and therefore the choices o f products/services increase due to m ore suppliers in all over thí world that are available on the Internet Beside more opportunities, the competition among electric vendors (e-vendors) has been also stronger and stronger, especially for the emerging markets in which there are many international giants Hence marketers have tried to keep customer intention by raisins customer satisfaction mainly through improving trust

One approach online companies can do is to ensure distributive fairness and procedural fairness Distributive and procedural fairness will trigger the feelinss of equity o f outputs (what is received) departed from inputs (what is invested) (Adams,

1963, p 347, 1965) and o f outcome-determining procedures (Folger & Greenberg, 1985) From then, trust and customer satisfaction will be maintained (Chiu Lin, Sun, & Hsu, 2009)

Other aspects are customer interface quality, perceived security and perceived usefulness In the offline commerce, face-to-face interaction may directly satisfy buyers through supporting services In e-commerce, salespeople interact via interface o f the websites The challenges facing the online sellers are to alleviate theCP

uncertainty and incomplete or distorted information (Ba & Pavlou, 2002) as well as ensure the security for sensitive contents and transactions Moreover, in the errerging markets, the belief o f customer on the virtual transactions is not strong Therefore, the mission o f designers is creating the attractive interface, updating latest information, and security systems, thus enhancing the perception of usefulness o f customers However, few studies investigate the above mentioned7 o cognition related to determinants o f trust and satisfaction in online context The

TS Đại học Hiroshima - Nhật Bản

TRUST AND CUSTOMER SATISFACTION.

above reasons motivate our work to profoundly understand the impacting factors on trust and customer satisfaction

2 Research m odel and hypotheses developm ent

The proposed model is shown in Figure 1

Figure 1 Research model

Distributive fairn ess

Distributive fairness, also called as perceived fairness o f outcomes, was startỉd

by Adams (1963) A dam s emphasized that there are correlations between inputs aad expected outcomes The expectation departs from the contributions to the exchange, for which the fair return will be hopefully gained

There are many previous studies that mention the relationship betwein distributive fairness and trust Pilai, Williams, & Tan (2001) had their strong argument

on high levels o f trust ensuing fair outcomes distributions Particularly in the case ofe- commerce, Chiu et al (2009) added the ideas that when customers get the products equal with their expectation, the level o f their trust in the vendor will raise

On the other hand, distributive fairness is also found to be correlated with customer satisfaction Distributive fairness is traditionally explored as a predictor for customer satisfaction (Huppertz, Arenson, & Evans, 1978) In e-commerce

context, C hiu, et al (2009) also tested successfully the im pacts o f distributive

fairness on customer satisfaction

Thus, based on the above discussion, we propose the following hypotheses:

Hypothesis I (H I): Distributive fairness positively influences trust in online

shopping

Hypothesis 2 (H2): Distributive fairness positively influences custoixer

satisfaction in online shopping

Procedural fairn ess

Another stream o f fairness is procedural fairness which refers to the equity of the process o f how outcomes are determined (Folger & Greenberg, 1985)

The relationship between procedural fairness and trust is found in many studiỉs According to Pearce, Biglev, & Branyiczki (1998), trust as well as organizational commitment results from procedural fairness in coworkers In online shopping context particularly, Chiu, et al (2009) argued that the perceived fairness o f polices and procedures o f shopping in the virtual markets has the influences on trust

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On the other side, the coưelation between procedural fairness and customer satisfaction has been estimated Prior scholars emphasized the importance o f procedural process in which the receivers do not feel satisfied even though they set favorable returns In contrast, they are happy with fair procedures even if the outcomes are not proportional (Lind & Tyler, 1988) M any researches also find the positive influence o f procedure on customer satisfaction in service encounters (Bolton, 1998), in service quality (Smith, Bolton, & Wagner, 1999) and also in online shopping (Chiu, et al., 2009)

Therefore:

Hypothesis 3 (H3): Procedural fairness positively influences trust in online

shopping

Hypothesis 4 (H4): Procedural fairness positively influences customer

satisfaction in online shopping

Customer interface quality

Customer interface quality is a concept involving many aspects and is measured in different ways Based on the prior researches (Chang & Chen, 2009; Thakur & Summey, 2007), our study is composed o f information and character of website

The most important determinant o f e-trust is the information presentation on the website (Thakur & Summey, 2007) According to Hoffman, Novak, & Peralta (1999), customers may not trust website providers due to their suspicious entity data The online storefront design actually improves store traffic and sales, and then customer satisfaction (Lohse & Spiller, 1999) M ontoya-W eis & Voss (2003) recognized that information content, navigation structure, and graphic style are three website design factors impacting customers’ use o f an online channel and overall satisfaction Therefore:

Hypothesis 5 (H5): Customer interface quality positively influences trust in

online shopping

Hypothesis 6 (H6): Customer interface quality positively influences customer

satisfaction in online shopping

Perceived security

Perceived security refers to the belief o f customers about the safely transmitting sensitive information (Chang & Chen, 2009) Hoffman, et al (1999) proved that 69 percent o f web users did not give any data to the websites because they do not know what they will do with the sensitive information The trustful

TRUST AND CUSTOM ER SATISFACTION.

relationship between customer and e-vendor is build only by ensurina a major alliance o f information technology, financial control and audit functions (Keen, 2000) In line with the discussion above, Jin & Park (2006), Szvmanski & Hise (2000) and Park & Kim (2003) proved that perceived security is a significant contributor to trust and satisfaction Therefore:

Hypothesis 7 (H7): Perceived security positively influences trust in online

shopping

Hypothesis 8 (H8): Perceived security positively influences customer

satisfaction in online shopping

Perceived usefulness

Perceived usefulness is the belief o f customers about enhancing online transaction performances (Chiu, et al., 2009; Davis, 1989) Since customers have perceived usefulness, they will trust the e-vendor (Pavlou & Fvgenson, 2006) Perceived usefulness is essential in shaping consumer attitudes and satisfaction with e-commerce channel (Devaraj, Fan, & Kohli, 2002) The usage o f Internet-based learning systems relied on extended version o f the technology acceptance model (TAM) is perceived to be useful in helping increase learners’ satisfaction (Bhattacherjee & Premkum ar, 2004; Saade & Bahli, 2004) Therefore:

Hypothesis 9 (H9): Perceived usefulness positively influences trust in online

shopping

Hypothesis 10 (H10): Perceived usefulness positively influences customer

satisfaction in online shopping

Trust

Based on social exchange theory (Blau, 1964), some scholars theorized that trust will create the strong impacts on customer satisfaction (Chiou, 2003; Singh & Sirdeshmukh, 2000) M organ & Hunt (1994) indicated the key role o f trust to influence customer satisfaction Singh & Sirdeshmukh (2000) specified trust mechanisms in cooperating and competing with agency mechanisms to know the effect on satisfaction in individual encounters They proved that trust will have direct effect on post-purchase satisfaction Chiou (2003) and Lin & Wang (2006) argued that accumulated trust will impact on overall satisfaction In terms o f e- commerce, Chiu, et al (2009) proved that trust is the strongest variable that have impacts on customer satisfaction in online shopping Therefore:

Hypothesis ỉ l (H I I): Trust positively influences customer satisfaction in

online shopping

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MỆT NAM HỌC - KỶ YÉU HỘI THẢO Q l í ó c TÉ LÀN T H Ử TƯ

3 Research m ethodology

Data collection

The data was collected in October 2011 via an online survey because o f advantages o f cost and speed This online data collection method was also in consistent with the research subjects o f the study, online buyers We distributed the Ink through the survey website www.nothan.vn The duration o f survey was two nonths The participants were volunteers who were interested in such a research tipic and had the shopping experiences before

A total o f 1,025 responses were received 267 out o f 1,025 responses were hvalid incomplete or save the same rating for all items; the remaining 758 cuestionnaires were used for the analysis The demographic profile of cuestionnaires was summarized in the Table 1

Table I: Dem ographic profile (N = 758)

Gender

Age

Education background

Job

Student

TRUST AND CUSTOMER SATISFACTION.

Years o f experience with the Internet

Number o f visits for last six months

*Despite of working with permanent full-time jobs, they are enrolling some course CO have higher degrees

Source; author

M easurement

The questionnaire was designed to measure research constructs using multiple-items scales adapted from previous studies that reported high statistical reliability and validity Each item was evaluated on a five-point Likert scale ranging from (1) Strongly disagree to (5) Strongly agree

4 Data analysis

4.1 Analysis o f the measurement model

Confirmatory factor analysis (CFA) was developed for measurement model in order to establish the unidimensionality, reliability, convergent validity and discriminant validity The good-of-fit indices satisfied the suggested value (x2/di = 2.759; GFI = 0 94; CFI = 0.97; TLI = 0.967; NFI = 0.956; AGFI = 0.919; RMSEA

= 0.048), therefore there was a reasonable overall fit between the model and observed data The reliability assessment was based on comparable fit index (CR) All CR indexes o f constructs were over the respective recommended cut-off levels

o f 0.7 In term o f convergent validity, all standardized regression weights are higher

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VIỆT NAM HỌC - KỶ YÉƯ HỘI THẢO QUỐC TÉ LÀN T H Ứ TU

than 0.60 and the critical ratios are significant at p = 0.001 In addition, two criteria, C'R and average variance extracted (AVE), were above the suggested levels, 0.7 and 0.5 respectively Finally, discriminant validity was examined using the guideline in the research o f Fornell & Larcker (1981) The correlations among constructs were listed with the AV E on the diagonal All diagonal elements were larger than inter­ construct correlations; hence discriminant validity was proved

4.2 Analysis o f the SE M

Table 2 shows the result o f the SEM Referred to the corresponding recommended values all fit indices achieved a good model fit (x2 = 479.036 (p = 0.000); d f = 168; xV d f= 2.851; GFI = 0.942; CFI = 0.973; TLI = 0.967; NFI - 0.96; AGFI = 0.92; RMSEA = 0.049) The explanatory power of the research model was shown in Figure 2 in which the model accounts for 71 and 72% o f variance (R score) Ten out o f eleven paths were significant Am ong them, nine exhibited a p- value o f 0.001 H I , H2 were supported by the significant coefficient paths from distributive fairness to trust and customer satisfaction o f 0.232 and 0.145 Procedural fairness was associated with trust and with insignificant coefficient path with customer satisfaction, therefore H3 was supported but H4 was not supported H5, H6, H7, H8 proposed that customer interface quality and perceived security would positively impact on trust and customer satisfaction, and the results were

strongly supported (7 3 1= 0.285; p3 2= 0.165 ; 741=0.161; [3,42= 0.099) H9 and H10

posited that perceived usefulness would positively affect on trust and customer satisfaction, the result were significant, and therefore H9 and 1110 were supported

H 1Ỉ was supported because trust had positive influence on customer satisfaction 0*2=0.32)

Table 3: T h e result of the SEM

Hypothesized relationship P a r a m e te r Estim ate C ritical ratio

(t-value)

Conclusion

HI Distributive fairness —>Trust Yu 0.232 5.78* Supported

-— -H2 Distributive fairness

—►Customer satisfaction

H3 Procedural fairness —>Trust 721 0.265 6.39* Supported H4 Procedural fairness

—♦Customer satisfaction

supported H5 Customer interface quality

—►Trust

TRUST AND CUSTOMER SATISFACTO'J.

H6 Customer interface quality

—♦Customer satisfaction

H7 Perceived security —>Trust 741 0.161 6.30* Supị:or:ed H8 Perceived security —>Customer

satisafction

H9 Perceived usefulness —->Trust 751 0.091 2.94** Supported

H 10 Perceived usefulness

—►Customer satisfaction

HI 1 Trust -^Customer satisfaction ^-62 0.320 6.20* Supported Overall goodness-of-fit indices

X2 = 479.036 (p = 0.000); df = 168; x2/df= 2.851

GFI = 0.942; CFI = 0.973; TLI = 0.967; NFI = 0.96; AGFI = 0.92; RMSEA = 0.049 Note: X2- chi-square; df, degrees of freedom; GFI, goodness-of-fit index; CFI, comparable fit index; TLI, tucker lewis index; NFI, normed fit index; AGFI, adjusted goodness of fit index; RMSEA, root mean square error of approximation; *p< (.031,

**p<0.01

Source: author

5, Discussion and implications

In general, our study support for the theoretical model and hypotheses among constructs There are several findings

First, among the expected determinants o f trust, distributive fairness and procedural fairness are positive predictors The results have the consensus with antecedents (Kumar, Scheer, & Steenkamp, 1995; Tyler & Lind, 1992) Customer interface quality, perceived security and perceived usefulness are also significant predictors o f trust It is appropriate to suggest that receiving the authentic and updated information, safe insurance as well as enhancing the beliefs using the websites can improve the transaction performance that will trigger the trust responses from customers

Second, regarding the expected determinants o f customer satisfaction, distributive fairness, customer interface quality, perceived security and perceived usefulness as well as trust are proved to be positive predictors Since customers feel the outcomes are proportional with inputs, the good environments, the safety, perception o f usefulness, they will be satisfied and result in repeat intention On the other hand, the study has an insignificant result in the relationship between

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VIỆT NAM HỌC - KỶ YÉU HỘI THẢO QUỐC TẾ LÀN THÚ T Ư

procedural fairness and customer satisfaction It may be due to the unperfected implementation in procedure-problem-solving systems It is clear that trust involves with all process from the beginning with customers’ previous experience until the service after shopping whereas customer satisfaction is the contentment o f the customers after shopping in a eiven virtual store That is the difference between trust and customer satisfaction from which procedural fairness has significant co­ efficient with trust but insignificant with customer satisfaction

6 Lim itation and future research

Despite contributing to the literature and finding out some interesting points, the current study also has some limitations that open avenues for future researches First, the questionnaire was designed to force the respondents to answer all the questions Respondents mav prefer not answering the questions than answer erroneously The online survey could add some choices in which the respondents can choose not to answer questions Another point was that although we took care

to translate the questionnaire in Vietnamese, but it still could influence on the results o f factor structures

Second, customer interface quality is a multi-faceted concept, but we could not include every component, just focused on information and character that were most related with online context The results could be yielded differently with different components

7 Conclusion

Trust and customer satisfaction are very important to e-companies in post­ consumption intention Our study empirically examined the significant influence o f distributive fairness, procedural fairness, customer interface quality, perceived security and perceived usefulness on trust as well as on customer satisfaction The mediator role o f trust also was proved successfully Practitioners can consider our study as the reference to establish trust and satisfaction in e-commerce in which in order to raise post-consumption intention, distributive fairness, procedural fairness, customer interface quality, perceived security, perceived usefulness need to be paid more attention, especially trust as well

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