The impact of social presence in the tnterface on customers purchase intention toward online store

This thesis first presented discussion of previous literature in order to identify the definition of concepts in research model included social presence, perceived usefulness, enjoyment,

Dang Thi Tuong Vi

THE IMPACT OF SOCIAL PRESENCE IN

THE WEB INTERFACE ON CUSTOMER’S PURCHASE INTENTION

TOWARD ONLINE STORE

MASTER OF BUSINESS

Ho Chi Minh City – Year 2014

Dang Thi Tuong Vi

THE IMPACT OF SOCIAL PRESENCE IN

THE WEB INTERFACE ON CUSTOMER’S PURCHASE INTENTION

TOWARD ONLINE STORE

ID: 22120080

MASTER OF BUSINESS SUPERVISOR: Dr VO NGOC THUY

Ho Chi Minh City – Year 2014

are gratefully acknowledged here

At the very first, I would like to express my deepest gratitude to my supervisor,

Dr Vo Ngoc Thuy With their guidance, I could have worked out this thesis They had offered me valuable suggestions and criticisms with his profound knowledge in rich research experience

I am grateful to express my sincere to Prof Nguyen Dinh Tho I have learned from him a lot not only about research design, but also data analysis technique I am also extremely to give thankful to UEH – International School of business (ISB)

supported me in all process

I would like to extent my sincere thanks to all my classmates and friends Their kindness and supports have contributed very much in my working process Most

important, I would like to express my most sincere thanks to my family for their continuous encouragement and support

I hereby declare that this thesis, to the best of my knowledge and belief, is my own work and effort and that is has not been submitted, either in part or whole, anywhere for any award

Information and ideas taken from other sources as cited as such This work has not been published

Signature

Dang Thi Tuong Vi

Date: 09/03/2015

Table of Contents

ABSTRACT

CHAPTER 1: INTRODUCTION 1

1.1 Research Background 1

1.2 Problematic of Research 2

1.3 Research Objectives 3

1.4 Significance of Research 3

1.5 Scope of Research 4

1.6 Structure of thesis 4

CHAPTER 2: LITERATURE REVIEW 6

2.1 Introduction 6

2.2 Theoretical background 6

2.2.1 Social presence 6

2.2.2 Perceived usefulness 8

2.2.3 Trust in an online environment 9

2.2.4 Enjoyment 10

2.2.5 Attitude and its determinants 12

2.2.6 Purchase intention 13

2.3 Research Model and Hypotheses Development 14

2.3.1 Social presence and Perceived of usefulness 15

2.3.2 Social presence and trust in an online shopping 15

2.3.4 Perceived of usefulness and attitude’s customer 16

2.3.5 Trust in an online shopping and attitude’s customer 16

2.3.6 Enjoyment and attitude’s customer 17

2.3.7 Perceived usefulness and Purchase intention 17

2.3.8 Enjoyment and purchase intention 18

2.3.9 Attitude and purchase intention 18

2.4 Conclusion 18

CHAPTER 3: RESEARCH METHOD 20

3.1 Introduction 20

3.2 Research process 20

3.3 Qualitative research 21

3.4 Measurement Scales 22

3.5 Quantitative research 24

3.5.1 Sample method 25

3.5.2 Questionnaire administration 25

3.6 Data analysis method 25

3.6.1 Contruct reliability (Cronbach’s Alpha) 25

3.6.2 Contruct validity - Exploratory factor analysis (EFA) 26

3.6.3 ANOVA 26

3.6.4 The structural equation model (SEM) 26

CHAPTER 4: ANALYSIS AND RESULTS 27

4.1 Introduction 27

4.2 Respondents demographic 27

4.3 Scale validation 29

4.3.1 Construct reliability 29

4.3.2 Construct validity 31

4.3.4 Manipulating validity 33

4.4 Modified research model 34

4.5 Model fitness 35

4.5.1 Test of mediating effects 36

4.5.2 SEM 37

4.5.3 Bootstrap 39

4.6 Hypotheses testing 39

4.8 Conclusion 41

CHAPTER 5: CONCLUSIONS AND LIMITATIONS 42

5.1 Discussion and conclusions 42

5.2 Implications 45

5.3 Limitations and future research 47

REFERENCES

APPENDICES

LIST OF FIGURES

Figure 2.3: Conceptual model 14

Figure 3.2: Research process 21

Figure 4.4: Modified research model 35

Figure 4.5.2: SEM result of research model (Standardized) 38

LIST OF TABLE

Table 4.2: Demographic Table 28

Table 4.3.1: Cronbach’s alpha result 30

Table 4.3.2: Rotated Component Matrix 33

Table 4.3.4: Multiple Comparisons 34

Table 4.5.1: The mediator test 36

Table 4.5.2: Relationship between constructs in research model (standardized) 38

Table 4.5.3: Bootstrap estimate result with N = 1000 39

Table 4.6: Result of hypotheses testing 40

LIST OF ABBREVIATION

ANOVA Analysis of variance

AVE Average Variance Extracted

B2C Business to customer

CFA Confirmatory Factor Analysis

CR Composite Reliability

EFA Exploratory Factor Analysis

E-commerce Electronic commerce

GFI Goodness-offit

KMO Kaiser-Myer-Olkin

ML Maximum Likelihood

OSAM Online Shopping Acceptance Model

SEM Structural Equation Model

SPSS Statistical software package

SRMR Standardize root mean square residual

RMSEA The Root mean square of approximately

TAM Technology Acceptance Model

TLI Tucker & Lewis index ()

TPB Theory of Planned Behavior

TRA Theory of Reasoned Action

VECITA Vietnam E-commerce and Information Technology Agency

This thesis first presented discussion of previous literature in order to identify the definition of concepts in research model included social presence, perceived usefulness, enjoyment, trust, attitude and purchase intention EFA method was used with 22 original observed variables but only build up five constructs because “Trust attitude” formed a concept With modified model, SEM test showed the significant relationship between the factors of model, social presence was infused through perceived usefulness and enjoyment then directly affected to purchase intention and indirectly through attitude Besides that, the statistic results

of Anova test proved the difference influences in manipulation of social cues such as social rich picture, text, customer rating and recommendation in turn of three levels web interface An interesting discussion disclosed adding social rich picture and text are supported to push a higher purchase intention, the customer rating and recommendation does not work

The results of the experiment reveal that social presence is effective elements to enhance purchase intention The findings contribute to confirm the earlier theories and supply a significant implication in form selection of web design which support e-business has effectively investment in marketing and better customers approach

CHAPTER 1: INTRODUCTION

1.1 Research Background

E-commerce has been becoming an effective trading channel for many companies, beside traditional stores, to sell their products and services, and to interact with customers That are stores open 24 hours a day, seven days a week, and 365 days a year, a sales person who doesn’t need breaks or holidays With low running cost, online stores create opportunity to reach the new markets because of unlimitedness for any customer who wants to find the products over the world

Increasing of internet users, extend to over the world, has been predicted for a tremendous development of e-commerce According to Tran (2014), head of VECITA (Vietnam E-commerce and Information Technology Agency), cites that Vietnam is one of the potential markets of growth e-commerce in South Eastern Asia Vietnam is the highest internet user in area of South East Asia with 16.1 million users by the time of July 2013 The internet users in Vietnam gain 36 percent of population, relevant to 32 million users Company with increment

of internet user, e-commerce also makes a strong and effective growth Survey of VECITA in

2013 in two big cities of Vietnam (Hanoi and Ho Chi Minh City), 57 percent Internet users purchase items through online channel, and the business to customer e-commerce sales are estimated USD 2.2 million Forecasting by 2015, goes along with the increment of 40-45 percent of Internet users in Vietnam, the rate of Internet user purchasing item online is predicted to reach around USD 4 million This is “a delicious pancake” for any companies who want to raise their revenue and expand their market

Aim to foster the possibility of rising profit and growth of business, many companies are more and more interested in e-commerce and identify it take a critical role in strategy of most enterprises over the world Therefore, none of business can ignore this idea if they want to exist and develop in future However, the key point is how businessman to apply e-commerce effectively as well as suitable with model and strategy of company

1.2 Problematic of Research

E-commerce in Vietnam, however, is still earlier market, not reach its full potential yet Some companies have been successful in building an online shopping channel or thriving in business by attracting more and more customers While the other just pause at install and experiment a website, revenue from selling online is still low In accordance to VECITA report, survey result in Vietnam in 2013, 41 percent of businesses only announce their increased through the e-commerce channel, 13 percent is decrease and 46 percent almost is unchanged

In framework of B2C e-commerce, no mention to software transaction, hardware and travel service, online shopping is still not widely and familiar with internet users Although, buying product or service through internet, customers have benefit due to opportunities of assessment of the global market and various choices from difference of e-retails, customers often do not trust on the vendors who supply product and services

Explain for this issue, Gefen and Straub (2003) believe that lack of human interaction or

at least the belief that system has characteristics of social presence is the main reason This is one of the major different between physical store and its electronic counterparty (Suki, 2007) Going to the physical store, customer can touch the real product and communicate directly with the seller Meanwhile, online shopping is impersonal, anonymous, and automated because computer controls it, in result consumer cannot feel human warmth, physical face-to-face contact and sociability (Gefen and Straub, 2003) In fact, most of e-commerce website space tends to display the product and exhibit little emotional or social appeal (Hassenein and Head, 2005) Hence, a challenge for businessperson is to indentify how to design and adopt online transaction to as close as traditional store and provides for a socially rich Finding solution for this issue requires a deeply understanding attitude, intention, and behavior of customer

This study investigates how social presence, which is one of factors enhance human warmth of e-commerce, through the web interface influence to consumer attitudes and purchase intention towards online shopping store Numerous of prior researches (Gefen and Straub, 2003; Hassanein and Head, 2007, Shen, 2012) find out the impact of social presence on trust,

perceived usefulness and enjoyment as “a catalyst” to increase the positive attitude of online shopping customer These studies also show the different results when analysis the impact of each factor in various character product and diverse cultural country (Hassanein and Head, 2005; Hassanein et al., 2009) However, these researches still do not examine the potential impact of social presence on purchase intention, which implies promise to one’s self to buy the product again whenever one makes next trip to the market (Hassanein et al., 2009; Tarig et al., 2013) Besides that, in perspective of social cue design, little researches detect the influence of social media such as customer rating and customer recommendations As such, this thesis supplements these social elements in the website interface to investigate their impact to attitude, and then explain to purchase intention of online customers in the end

1.3 Research Objectives

This study is critically assessing the purchase intention of online buyer underlying the impact of perceived social presence in website interface As discussion in section 1.2, although many empirically researches study about this matter, the widely implications and diversify of information system still motivate the expansion approach to discovery In view of Vietnam market, this thesis aims:

- To identify the effect of social presence on purchase intention through perceived usefulness, enjoyment, trust and customer’s attitude

- To evaluate how the elements of social presence contribute to enhance purchase intention of online customers

1.4 Significance of Research

This research is a review the theory related to social presence, particularly in the commercial website Through testing the effect of perceived social presence on attitude and purchase intention, this study would be beneficial to businessperson to recognize which the element of social presence is the impact to the purchase decision of their customers Accordingly, they could be effective investment strategy in website design to engage more and more customer to visit and buy product from their website

e-1.5 Scope of Research

Jewelry is selected as the online product to sell on the website As the customer can be easily to identify the materials such as diamond, gold, silver, other metal materials… so that the exhibition of product in website is close to the real product without the need for tactile evaluation The component materials of the jewelry are quietly familiar to and specific identify with user Moreover, product is a meaningful present or a luxurious fashionable grocery, which shows out the presentation of users to the other Selling this product online has potential to develop strongly if businessperson building an effective website According to Hassanein et al (2009) socially description related to product is foster a positive attitude also to online store Therefore, a fictitious website containing social cues is designed for selling jewelry Survey is conducting in the experienced online customers in Ho Chi Minh

Chapter 2 - Literature review

Chapter 2 presents the theoretical foundation of the research, including the definition of each concept in research model and their relationship in literature From that, the hypotheses are argued and proposed for this research

Chapter 3 - Research method

Research method describes the way of establishment of the measures and conducting the survey This part includes two main sections, qualitative research to review draft measurement scale and quantitative research design to test the hypotheses

Chapter 4 – Analysis and results

Chapter 4 exhibits the outcomes of this research The results are evaluated corresponding to each step of the data analysis According that, the research hypotheses are tested

Chapter 5 – Discussions, Implications and Limitations

The last chapter of this study discusses the research results by affirming the exploratory values as well as connecting to the realistic conditions to suggest the practical implication

Finally, the limitations arouse the direct for further research in the future

CHAPTER 2: LITERATURE REVIEW

2.1 Introduction

In framework of investigation of the relationship between social presence and antecedent of customer attitude, and their impact to purchase intention, author heritages research model built by the previous research (Gefen and Straub, 2003; Hassanein and Head, 2007) On purpose discovery and thoroughly aware of conceptual, author synthesizes the knowledge from various sources in different fields of electronic technology system to define each construct and discuss its relationship hypotheses among the constructs

2.2 Theoretical background

2.2.1 Social presence

In psychological respect, Argyle and Dean (1965) interpret the meaning of social

presence in concept of “immediacy behavior” which is used to create “intimacy”, which is a fundamental supporting for the later related research to find out the way to explain clearer the definition of social presence Some researchers characterize the social presence of a medium as its capacity to transmit information about facial expression, posture, dress and non-verbal cues (Short et al., 1976) Its definition has clarified as the extent to which a medium allows users to experience others as being psychologically present (Fulk et at, 1987) Social presence is as a

“mediated communication” in relation of property of a medium and the perception behavior or attitudes of participants in a “mediated interaction” (Gunawardena, 1995) Hence, social presence is considered as the degree to which users can feel others' presence in the result of interpersonal interactions during the communication process In other words, it regards as the level of awareness of the co-presence of another human being or intelligence (Biocca and Nowak, 2011)

Many researchers explain social presence on its close relationship to information richness (Rice et al., 1989; Straub, 1994; Straub and Karahama, 1998), which centers on the interactivity

of the media (Sproull and Kiesler, 1986) Gefen and Straub (2003), however, emphasize the psychological connection, where social presence is concerned about “human warmth” Thus,

the determinant of social presence relies on a medium convey sociable, warm, sensitive, personal or intimateis (Shen and Khalifa, 2009)

Especially, Karimov et al (2011) have a summary research which comprises thousands of the previous researches related to the website design dimension; indicate that the “social cue design” measured via human like, assistive interface and social media In detail, human like cues is manipulated social presence by facial photo of shop representation, product worn by people in emotion setting and text evoke positive emotion Assistive interface features transfer social presence via avatar, recommendation agent, and these elements are not much noticed in the research Social media cues such as non-experimental information from others (including from the other website and site searchers), objective source rating, customer or viewer ratings, and social network (facebook, youtube, Twitte online blogs and forum etc), all are infusing components boost social presence as well Research has shown that increase sense of social presence can be achieved through stimulating the imagination of interaction with other humans Studies have shown that technologies such as personalization, recommendation, and consumer reviews can enable the feeling of a place where people interact, thus increasing the social presence of websites (Kim and Benbasat, 2003) through socially rich text and picture content, personalized greetings, human audio and video, intelligent agents, or by providing means for actual interaction with other humans (Hassanein and Head, 2007)

Social presence has significance in connecting user to online store According to Shen and Khalifa (2009), it is a major design principle and important concept in explaining the relationship between online community artifact and online behavior in multidimensional of psychology including awareness, affective and cognitive social presence These dimensions form the overall sense of social presence Rajasekhar and Vijayasree (2012) confirm the emotions and sociability plays vital role in psychological perspectives, they are a potential factor to influence the making decision process while in making and correcting the process effectively

2.2.2 Perceived usefulness

TAM (Technology Acceptance Model) has been widely used to study online shopping environments It has been explained how users of acceptance and use technology base on two mainly factors perceived of usefulness (PU) and perceived ease of use (PEOU) Usefulness is explained as the individual’s perception that using the new technology enhances or improves user performance which supports to increase the outcome of the online shopping experience (Davis, 1989) TAM predicts individual adoption and attitude willing use technology (Rauniar

et al., 2014) Applying to online environment, high of PU and PEOU motivate users to visit or participate interaction in website For example, some social website like facebook, twitter etc are attracting millions of participant due to its usefulness as it supply a tool for people to communicate with others, and its ease of use when innovate website as the way make simple manipulations

Developing from the theory of TAM (Chen et al., 2002; Davis, 1989), Zhou et al (2007) building model of OSAM (Online Shopping Acceptance Model) which predicts and explains consumer acceptance of online shopping by extending the belief-attitude intention behavior relationship in TAM from the perspectives that are specific to online shopping The research captures the characteristics of the perceived usefulness, not just only perceived a generic information systems but also deep into the ultimate goal of an online shopping which show off the potential benefits such as term of convenience, search ability, and rich product information environment as concept of “perceived gain” (Bhatnagar and Ghose, 2004a, p.765), which underlies the importance of reducing online shopping uncertainty and risks

Growth of Internet shopping primarily is attributed to the advantages the Internet provides over other traditional forms of retailing Its powerful utilities empower consumers with the ability to access and perform the entire shopping process anytime, anywhere Thus, each commerce website, anyway, contributes to improve user performance in shopping or information seeking by save money and save time Furthermore, attending online shopping

allow user to get the best deal or find out adequate information effectively related to the products, such that enhance the usefulness of internet shopping (David, 1989)

2.2.3 Trust in an online environment

Trust is a complex concept that has been widely studied (Hassanein and Head, 2007) However, it remains a difficult concept to describe due to its dynamic, evolving and multi-facered nature (Ambrose and Johnson, 1998; Lewicki and Bunker, 1996) According to Rousseau et al (1998), although there many ways to describe this concept, the most commonly cited definition of trust in various contexts is the “willingness of a party to be expectations that the other will perform a particular action important to the trustor” (p.394), as proposed by Mayer et al (1995) It is also, “The more trusting we are, the more willing we may be to take the risk of engagement/interaction” (Hassanein and Head, 2007, p 692) For instance, consumers are more willing to purchase products from a vendor if they can trust that the vendor’s word can be relied upon and the vendor will not take advantage of the consumer’s vulnerabilities (Geyskens et al., 1996)

Following to the above perceived of trust definition, application to the online environment, many researchers define concepts of trust or consumer trust in online shopping For instance, Lee and Turban (2001) identify consumer trust in Internet shopping as “the willingness of a consumer to be vulnerable to the actions of an Internet merchant in an Internet transaction, based on the expectation that the Internet merchant will behave in certain agreeable ways, irrespective of the ability of the consumers to monitor or control that Internet merchant” (p.79) Trust can be seen as reliability and trustworthiness of the e-vendors supplying products

or services (Hassanein and Head, 2007) More specifically, it is a series of specific beliefs including belief of ability, belief of benevolence and belief of competence of the online vendor (Gefen, 2000)

Trust is generally important in the adoption of new technologies (Fukuyama, 1995), including web (Gefen, 1997) and e-commerce (Gefen, 2000) Trust is an important aspect in commerce, in general, because of the inherent uncertainly created by the need to depend upon

others in many types of commerce interactions (Fukuyama, 1995; Luhmann, 1979; Williamson, 1985) and the resulting possibility of encountering opportunistic behavior, such as vendor is not candidly revealing all the appropriate risks (Williamson, 1985) or behaving in an unpredictable manner (Luhmann, 1979) The same applies to e-commerce where consumers need to depend upon often the unknown e-vendors who may resort to opportunistic behavior (Frederick, 2000; Gefen, 2000)

In an online shopping context, consumers may be vulnerable themselves as dealing with e-vendors who are not to engage in potential, but clearly undesirable, opportunistic behavior such as the retailers to sell information about you to unknown others, (Miyazaki and Fernandez, 2006), a product or service may not perform as expected and suffering the loss of the desired benefits (Stone and Gronhaug, 1993), purchasing unfair price, unauthorized tracking of transactions and unauthorized use of credit card and purchase information (Gefen and Straub, 2003) Similarly, Bhatnagar et al (2000) suggest that the likelihood of purchasing

on the Internet decreases with increases in product risk At once perceived of these risks, consumer becomes uneasy to accept the transaction, which mainly causes the fails of online shopping Therefore, building trust is especially important in the online environment to positively impact consumers’ attitudes and purchasing intentions (Bart et al., 2005; Gefen & Straub, 2003; Roy et al., 2001; van der Heijden et al., 2001; Wang and Emurian, 2005; Hassanein and Head, 2007)

e-2.2.4 Enjoyment

Originating from the definition of “flow state” (Csíkszentmihályi, 1990), which mental state when one is completely focused, absorbed, and engaged in an activity, others researcher extended by plus enjoyment Clarke and Haworth (1994) state the enjoyment of the activity is one of very important element of flow These authors describe “flow” as an experience that is totally satisfying beyond a sense of having fun and specific by a heightened sense of playfulness Therefore, enjoyment is results from the fun and playfulness of the online

shopping experience, reflects consumers’ perceptions regarding the potential entertainment of Internet shopping

Participant online shopping, e-consumer expects to receive a satisfaction the human demand with the application of the advantage of high technology “Online shopping is a voluntary and hedonic activity, and user participate because they are intrinsically motivated” (Shen, 2012, p 201) Beside the economic outcome, consumer voluntarily participates in a relationship due to leisure activity, which is fun and enjoyable (Mathwich, 2002) This is a positive psychology according to the theory flow which an experience that is so enjoyable should lead to positive effect and happiness in the long run (Csíkszentmihályi, 1990) Lee et al (2003) found that shopping enjoyment and purchasing convenience are the factors sociopsychological value which contributes significantly to attainment online customer satisfaction Relation to the technology adoption, the concept of perceived enjoyment has been defined and measured as the extent to which activity of using a specific system is perceived to

be enjoyable in its own right, aside from any performance consequences resulting from system use (Davis et al., 1992; Shen, 2012) Using system with fun is also link to perceived entertainment value which reflects the website ability to enhance the experience of visitor to a website

Synthesizing the previous research, three latent dimensions of enjoyment concept are escapism, pleasure, and arousal (Mathwick et al., 2001; Monsuwe et al., 2004) and each of construct specifically impact to consumer attitude by offering an escape from the demand of the day to day world, feeling of happiness, satisfaction and stimulation of action Monsuwe et

al (2004) states that:

“ If consumers are exposed initially to pleasing and arousing stimuli during their Internet shopping experience, they are then more likely to engage in subsequent shopping behavior: they will browse more, engage in more unplanned purchasing, and seek out more stimulating products and categories” (p.109)

2.2.5 Attitude and its determinants

Prominent psychologist Allport (1935) has been stated that attitudes is "the most distinctive and indispensable concept in contemporary social psychology"(p.798) It expresses the favorable or disfavorable toward a particular object Thus, it is changeable and affect to the human emotion and behavior

In this study, attitude is mainly examined as the endogenous construct rather than behavioral intention based on three reasons First, this research applies a controlled experimental design with manipulated fictitious websites Despite the fact that we design an experimental website which looks and feels as real and professional e-commerce site, the hypothetical and simulated nature of the experiment was clearly evident to participants Measurement of behavioral intention of participants by survey as if they are likelihood to purchase from or return to an artificial website, may not be realistic It should solicit perception

of attitude, as a predisposition to influence behavior (Hassanein and Head, 2007) Second, attitude has particularly connection to the consumer decision-making (Venkatesh and Brown, 2001) Research of Hsu and Bentler (2012) has been shown that consumer attitude have a positive direct impact on online shopping intentions In addition, a positive attitude leads to ease online transactions and decrease barriers of online shopping (Jarvenpaa et al., 1999; Pavlou and Chai, 2002) At last, attitude is closely influent to behavioral intention when acceptance are voluntary (Davis et al., 1989; Hassanein and Head, 2007) and among experienced users (Karahanna and Straub, 1999; Yu et al., 2005) As such, the participants in this study are experienced users and online purchaser in voluntary context

Theory of Reasoned Actions (TRA) mentions that there are relationship between individual’s performance and behavioral intention, which is actually determined by the individual’s attitude Meanwhile, the Technology Acceptance Model (TAM) focuses on explaining acceptance of information systems Developing TAM theories, the empirical studies have proven that user’s attitude toward high technology is influenced by the perceived of usefulness and perceived ease of use

Studying psychology of consumer, Babin et al (1994) suppose the motivation of shopping initiate of utilitarian and hedonic dimensions First factor is that customer pay attention to how to purchase product in efficiency and timely manner to achieve their goals Then, customers care about the enjoyment that they seek fun, playfulness in online shopping, and satisfaction with the service Both of two respects are inside perceived person and “the basic determinants of attitude” toward shopping in the internet (Monsuwe et al., 2004)

Meanwhile, many previous studies have summarized other significant factors that could influence consumers’ attitude toward online shopping such as security, privacy, after- sales service, marketing mix, and reputation In this investigation, however, we focus on three familiarly dimension of attitude within the web context: TAM constructs (perceived usefulness and perceived ease of use); Trust; and Enjoyment These factors are significantly influenced by social presence as well (Hassanein and Head, 2007)

2.2.6 Purchase intention

Defining the online purchase intention, many authors agree that it attaches with the action willing to pay and user behavior in making decision process Pavlou (2003) defines online purchase intention as a situation where a consumer does not object to pay and intends to make online transactions This term also is used by George (2004) in online process when customers willingness to search, select and purchase products via the Internet Similarly, Khalifa and Limayem (2003), interpret internet purchase behavior as a process of purchasing products, services and information via the Internet, base on earlier theories related to customer behavior and intention George (2004) expresses that many customers do not accept online shopping due

to psychology of customer care about personal information and privacy This means that processing of customers making their decisions on what product or services to purchase online reveals the buying behavior of online customers The way of decision-making behavior interacting with online shopping is clarified in three stages of pre-purchase, purchase and post purchase (Sheth and Mittal, 2004) Therefore, customer online purchase intentions in the web-

shopping environment particularly decide the power of a consumer’s intention to do a purchasing behavior via the Internet (Salisbury et al., 2001)

In the scope of e-commerce, Theory of Reasoned Action (TRA), Theory of Planned Behavior (TPB), and Technology Acceptance Model (TAM) are fundamental of knowledge in explaining and predicting consumers’ intention towards adopting an online shopping behavior

in later research (Delafrooz et al., 2011) While TAM focuses on user with concept of perceived usefulness as a determinant of attitude, the researches based on TRA and TPB develop in extend to present cognitive processing and level of behavior change

2.3 Research Model and Hypotheses Development

Heritage from model research of Hassenien and Head (2007), here author develops the model by closer approach mental of internet user via purchase intention which is an important step in making buying decision The proposed research framework and hypotheses are presented in figure 2.3

Figure 2.3: Conceptual model

H7

H8

H4 H1

H3

Perceived Usefulness

2.3.1 Social presence and Perceived of usefulness

There is a psychological connection between perceiving that a medium is warm and its usefulness across a range of communication tasks (Rice and Case, 1983; Steinfield, 1986) In concerned about the relationship between perceived social presence and perceived usefulness, many researchers have investigated While Gefen and Straub (2003) are not able to show a link between perceived social presence and perceived usefulness in an e-Services context Straub (1994); Karahanna and Straub (1999) have confirmed that users' social presence has a positive effect on perceived usefulness in the online shopping environment Hassanein and Head (2007) and Shen (2012) states that “social presence conveys through the website effect PU and PE” Thus, there is enough evidence to suggest the following hypothesis:

H1: Social presences have positive impact to perceived usefulness in online stores

2.3.2 Social presence and trust in an online shopping

Trust is created within the context of a social environment (Fukuyama, 1995) In context

of social presence of website, Simon (2001) claims “information richness and social presence are closely related concepts”, and “information rich, consumer oriented websites should help reduce ambiguity, increase trust and reduce risk, and encourage users to purchase with lower levels of consumer dissonance” (p.26) Gefen and Straub (2003) show social presence has an effect online consumer’s trust and is a necessary condition for the development of trust Designing website with a higher social presence factor can create a higher trust (Gefen and Straub, 2003; Wang and Emurian, 2005; Hassanein and Head, 2007) As such it helps to improve e-commerce trust as customer more influenced by direct relationship than indirect relationship with the online merchant (Lah et al., 2013).Therefore, the hypotheses is suggested that:

H2: Social presences have positive impact to trust in online stores

2.3.3 Social presence and enjoyment

The most prominent psychological impact of social presence is enjoyment (Lombard and Ditton, 1997) Heeter (1995) finds that users experimenting with a virtual reality entertainment

system enjoyed the system more when they felt a stronger sense of social presence Past studies have been proven the positive relationship between social presence and perceived enjoyment

on a product website selling apparel (Hassanein and Head, 2007), or in a virtual world website (Yeh et al., 2011, Shen, 2012) Therefore, author hypothesizes that:

H3: Social presences have positive impact to enjoyment in online shopping websites

2.3.4 Perceived of usefulness and attitude’s customer

According to the TAM, perceived usefulness is the degree to which a person believes that using a particular system would enhance his or her job performance Base on this model, researchers has been shown the impact of perceived usefulness on attitude’s customer in various field using online transaction such as online ticket airline (Renny et al., 2013) , e-banking (Jarhangir and Begum, 2007) In the words of Davis, Bagozzi, and Warshaw (1992), perceived usefulness refer to consumers’ perceptions regarding the outcome of an experience that process to recognize and conclude benefit of user A system in high perceived usefulness,

as a result, enhances the existence of a positive use-performance relationship

H4: Perceived usefulness have positive to attitude in online shopping websites

2.3.5 Trust in an online shopping and attitude’s customer

Trust is “the moral importance of an emotional attitude” (Miller, 2000, title) Trust in

online shopping is considered as an important element affecting consumers’ intention to adopt e-commerce (Gefen and Straub, 2000) Consumers’ trust in online shopping has played a critical role and a prerequisite influencing on consumers’ intention to online shopping adoption Trust helps customers reduce their risk perception and make them more comfortable sharing their personal information them (McKnight and Choudhury, 2006) Subsequently, consumer trusts in a company’s website generates more favorable attitudes towards the company and willingness to buy from the online vendor (Li and Yang, 2002; Gefen and Straub, 2003; McKnight and Choudhury, 2006) With model research trust-oriented perspective, drawing the same directly path from trust to customer attitude plus the perceived risk in the online store ,

Jarvenpaa et al (1999) find that increasing trust reduce the perceived risk, and positive impact the attitude toward internet shopping Thus, author hypothesizes that:

H5: Trust will result in a more positive attitude towards online shopping website

2.3.6 Enjoyment and attitude’s customer

Childerset et al (2001) declare “enjoyment” to be a consistent and strong predictor of attitude toward online shopping If consumers enjoy their online shopping experience, they have a more positive attitude toward online shopping, and are more likely to adopt the Internet

as a shopping medium Subsequently, the prior researches (Gefen and Straub, 2003; Hassanein and Head, 2007; Shen, 2012) have indicated that perceived enjoyment can positively impact consumer attitudes of online vendors and their websites Supporting for this view, research of Kim and (2007), show that perceived entertainment and enjoyment value is a strong determinant of attitude toward product virtualization technologies Agree with in the result of these researches, author hypothesizes that:

H6: Enjoyment will result in a more positive attitude towards online shopping website

2.3.7 Perceived usefulness and Purchase intention

Factors affecting the intention of purchasing online have been investigated for many years Perceived usefulness is a basic factor significantly influencing the online customer’s intention (Atchariyachanvanich et al., 2006) Due to human tend to maximize useful of the information technology until they really get believable to act the next task performance, the perceived usefulness takes role as infusion to motivation individual accept objective or not Actually, perceived usefulness toward using a computer has been found to positively influence individuals' behavioral intentions toward computer usage (Davis et al., 1989) Hence, hypothesis is settled as below:

H7: Perceived usefulness will result in a more positive attitude towards online shopping website

2.3.8 Enjoyment and purchase intention

In frame of research enjoyment as a component creates the flow experience, series of research mentioned about the obvious impact of e-satisfaction on user intention to revisit a website Childers et al (2001) confirm that enjoyment, entertainment, and humor are important factors to enhance consumers' revisiting intentions to Web sites They agrees with idea to create more enjoyable online shopping contexts through images, color, humor, animation, and other interactive features would help outstanding online shopping Moreover, enjoyment implied by perceived playfulness (Koufaris and Hampton-Sosa, 2002) and the consumer’s hedonic orientation (Delafrooz1 et al., 2011) has been proven significantly impact on purchase intention Hence, author hypothesizes that:

H8: Enjoyment will result in a more positive attitude towards online shopping website

2.3.9 Attitude and purchase intention

According to Yu and Wu (2007), when performing a behavior decides intention towards online shopping, a positive attitude is the factor to urge greater intention to shop for product via internet A stronger negative attitude contributes lower behavior intention While Donthu and Garcia (1999) discovery the consumer innovativeness positively influences online shopping behaviors and online shopping intention, the indirect effects being mediated by attitude The researchers (Vijayasarathy, 2003; Chang and Chen, 2008; Delafrooz et al., 2011) have extensively adopted on the theory of planned behavior and the technology acceptance model (Davis, 1989; Vijayasarathy, 2003) to explain or predict consumer online shopping attitude, and online shopping intention All of these studies confirm that attitude is significant positive impact on online shopping intention and behavior Hence, author hypothesizes that:

H9: Positive attitude will enhance purchase intention towards online shopping website

there are many different discussions, research expects on positive influence among model constructs These empirical researches allow author to find out the general trends of internet user in decision making and improve the perception of earlier theories

CHAPTER 3: RESEARCH METHOD

3.1 Introduction

This section present about the methodological approach research It outlines all steps in process research, then, displays the method to develop the measurement scales In addition, it describes the plan to collect opened information in qualitative research and main data for the final analysis in quantitative research Finally, method of data analysis is chosen to be suitable with the purpose of research model

3.2 Research process

We applied both qualitative and quantitative methods to modify the measurement scales and test the research model Collecting data process of this study was designed into two stages The first was a pilot test with qualitative research and the second was main survey with quantitative research (figure 3.2)

Figure 3.2: Research process 3.3 Qualitative research

A qualitative research aimed at confirming the model and exploring sufficiently the impact of social presence on antecedents of attitudes, as well as the factor affect to attitude’s customer toward online shopping Author made a survey with an opened interview question to the customer who experienced in online shopping in order to identify what they thought about the factor in suggested model Interview questions, those were designed without implied, email

or ask directly to participants

The survey showed clearly the objective of studies and interpreted clearly about the social elements appearing in website interface There were14 participants experienced in online shopping reply this survey

Measurement Scales

Cronbatch’s Anpha EFA- Exploratory factor analysis

ANOVA test

Modified Research Model

Test Model Fitness

Mediator effect SEM – Structural Equation Model

Bootstrap

Hypothesis Test

Conclusion

Previous research had been drawn to the concept of social presence to explore the lack of human warmth online (Chen et al., 2002) Therefore, solution to overcome the lack of human warmth was by increasing the social presence such as presence of avatar or presence of socially rich description or pictures of products These increased the probability of purchase decision as well (Song et al., 2008)

The interviewers were asked about the factor which affect to attitude’s customer and purchase intention, and their feeling when adding socially rich text, picture customer rating and recommendation Through their answer, 85 percent participants perceived the usefulness of website when adding social rich elements in website interface They suggested an ease to receive more information about the product Meanwhile, there were 50 percent participants feel enjoyable, expressive and more attractive when looking product as “real” 21 percent of answers felt persuasive and trust in the website because the product seemed to fit for the user Reply to the factors affect to their attitude toward the online store, the interviewers mentioned many factors such as display or design of website interface, privacy security, trustworthy, customer service, comparing price, warranty policy of product 35 percent interviewer concerned about the trustworthy, 14 percent referred to the usefulness of website and 28 percent indicated the enjoyment when they experienced a beautiful and friendly website Result

of survey showed the items were realizable and suitable with the psychology of customer’s online shopping This investigation supported all factor of research model and the items were significantly reflected the conceptual

3.4 Measurement Scales

In order to comprehend conceptual and make sure the reliability in conduct the research,

we applied the items, which were adapted in previous studies Hassanein and Head (2007)

advise that all items should be come from the existing literature, and have been proved strong content validity repeatedly through different researches Hence, the below scales were used popular in various studies related to attitudes, intention, and behavior in electronic commerce

As literature review section, there were six factors in the research model

Social presence (SP)

Scales item of social presence were adapted from Gefen and Straub (2003), Shen (2012) They were included:

SP1 There is sense of human contact on this website

SP2 There is sense of sociability on this website

SP3 There is a sense of human warmth on this website

SP4 There is a sense of human sensitivity in the website

Perceived of usefulness (PU)

Scales item of perceived of usefulness were gathered from the research of Moon and Kim (2001) and Chen et al (2002) They were included:

PU1 This website provides good quality information

PU2 This website improves my performance in assessing jewelry online

PU3 This website increases my effectiveness for jewelry assessment online

PU4 This website is useful for assessing jewelry online

Enjoyment (EN)

Measuring this factor, author synthesized the scales of enjoyment from three studies: Ghani and Deshpande (1994), van der Heijden (2003), Hwang and Yi (2002) They were included:

E1 I found my visit to this website interesting

E2 I found my visit to this website entertaining

E3 I found my visit to this website enjoyable

E4 I found my visit to this website pleasant

Trust (TR)

As Gefen and Straub (2003) had thoroughly research related to conceptual of trust, scales item of trust were adapted from their studies They were included:

T1 I feel that this online vendor is honest

T2 I feel that this online vendor is trustworthy

T3 I feel that this online vendor cares about customers

T4 I feel that this online vendor would provide me with good service

Attitude (AT)

Scales item of attitude were collected from van der Heijden et al (2001) They were included:

A1 I would have positive feelings towards buying a product from this site

A2 The thought of buying a product from this website is appealing to me

A3 It would be a good idea to buy a product from this website

Purchase intention (PI)

Adopted the scales item from Jarvenpaa et al (1999), scales item of purchase intention

were included:

PI1 How likely is it that you would consider purchasing from this website?

PI2 How likely is it that you would consider purchasing from this website?

PI3 In case you intend to buy jewelry in online store, how likely is it that you would buy from this website?

All of these items were measured by a seven point Likert scale, anchored by one equivalent to strongly disagree to seven equivalents to strongly agree Although some constructs had been drawn from two or three validated sources, they were assumed that these items are measuring the same underlying construct which is being tested reliability by Cronbach’s alpha in next section

3.5 Quantitative research

The survey via questionnaires was executive after qualitative survey reveal the social presence cue indeed affect to customers perception Purpose of quantitative research was to explain to the problematic research- how the social present affected to attitude and purchase intention by analysis collected data and based on representative sample of customers who experienced in online shopping

3.5.1 Sample method

An empirical study was conducted to validate the proposed research model and test our proposed hypotheses There were total 22 items, which measured six conceptual The sample estimated around 300 participants in the survey Subject gave the task of purchasing a present for friend on jewelry online stores

Survey questions were sent by email or the other social network such as facebook, skype, yahoo etc to people who had known or experience buying products in online stores in Ho Chi Minh City Three websites were intentionally designed present three levels of social presence The first one was simple interface with product and basic information of product (price, code, material etc) The second one added the social rich text and picture The last one display all contend of the second but plus with customer rating and recommendation Accordingly, participants were divided in three groups which 100 members in each group to answer the survey attachment of the websites interface present three levels of social present as appendix C

3.5.2 Questionnaire administration

There were 292 people take part in answering this survey However, author only chose

210 correspondents, approximate 71 percent, who were in age from 23-35 as a specific segment customer in this online store Because these users have advantage in using internet application and have high demand in buying online The others were excluded in this investigation All of these valid data were input in SPSS 20 and AMOSS 22 in order to process analysis statistics

3.6 Data analysis method

3.6.1 Contruct reliability (Cronbach’s Alpha)

According to Connely (2011), Cronbach’s alpha was used as only one criterion for judging instruments or scales It was commonly used as an estimate of the construct reliability

In book of SPSS for intermediate statistics, Nancy, Karen and Goerge (2005) indicated that this method was widely applied because it supplied a measure of reliability that could be valid from one testing session or one administration of a questionnaire

3.6.2 Contruct validity - Exploratory factor analysis (EFA)

Norris and Lecavalier (2010) supposed that “EFA is based upon a testable model and could be evaluated in terms of its fit to the hypothesized population model; fit indices could be generated to help with model interpretation” (p.9) Moreover, analysis data accessing by EFA

helped to identify latent constructs underlying a set of manifest variables In this method, we

paid attention to test the convergent and discriminant validity of each item which were the two subtypes of validity that make up construct validity (Campbell, 1959)

3.6.3 ANOVA

Due to objective of research to identify the impact of social presence through three levels

of website interface, data analysis exhibited the differences in means from each other groups correspondence to each level for statistical significance An Anova, stand for “analysis of variance”, was conducted in order to compare simultaneously three levels of social presence

3.6.4 The structural equation model (SEM)

SEM was used as the main method for analyzing the research model by testing the assumed causation among a set of dependent and independent variables Through this method,

we could find out the relationship between conceptual and level of each conceptual to the other

in research model Specially, author noted the indices of model fit such as Chi-Square, RMSEA, TLI, CFI, SRMR

3.7 Conclusion

This chapter showed the methods research used in this thesis According to this, the survey question was built up from the prior research and confirm via qualitative research Then, quantitative research was conducted by sending survey to participant via internet Number of data collection was totally met the requirement of analysis method in SPSS and AMOS software All method analysis including cronbach’s alpha, EFA, Anova and SEM were the basic testing to explain the outcome of research in next chapter

CHAPTER 4: ANALYSIS AND RESULTS

4.1 Introduction

This chapter focused on the analysis and interpretation of data that was collected First part, respondents demographic demonstrated the characters of data by using the SPSS – Statistical software package The second part, the scale of contrast was tested the reliability through cronbach’ alpha and the validity mainly using EFA In addition, an Anova test was conducted in this part as precedent condition for testing the manipulation of social presence via three levels The third part, model fitness was examined via testing mediator, SEM and bootstrap Finally, hypotheses test was conducted to explore the relationship among the variables of model

4.2 Respondents demographic

From the collected data of 210 answers, author used SPSS – Statistical Software package to release the frequencies of each demographic factor as table 4.2

Demographic Profile Category Frequency Percentage

Table 4.2: Demographic Table

As purpose of this research, author focused on the specific segment of customer, all participants was age from 23 to 35 year- old chosen for this investigation Descriptive statistics result indicated that the percent of between female and male was relative equally, equivalent at

58 percent and 42 percent The academic attainment of the respondents was high rating at the achievement of College or Bachelor with 81 percent The respondents had education level at post graduated was 13 percent, and only 6 percent of high school The income was centered at earning form 5 million to VND 10 million, equivalent over a haft of interviewers with 55 percent, the others was equal earning percent at 15 percent with three incomes of less than VND 5 million, over 10 million to VND 15 million, and over VND 15 million As expectation,

most of respondent had experience with internet service At longest time experience point, the people had over 6 years using internet got a high percent at 61 percent, following with 4-6 internet experience got 26 percent and the last with 1-3 internet experience took only 13 percent Over 90 percent responders had experienced in buying product through online shopping channel, only 7 percent had known about the online shopping but they still had not bought any product from online shopping yet

4.3 Scale validation

4.3.1 Construct reliability

As Nancy et al (2005), Crobach’s alpha was the most commonly used type of internal consistency reliability for multi items scales This measure was computed to assess whether the group items were summed to create the observed variables As mentioned in Gefend research (2002), Rivard and Huff (1988) advised the reliability of this measure should be higher than 0.5 and ideally higher than 0.7 Nancy, Karen and Goerge (2005) also suggested that the Cronbach’s alpha should be above 0.7 for items to be used together as a construct As shown in Table 4.3.1, the alpha value ranged from 0.853 (for social presence) to 0.891 (for perceived usefulness), which indicated the items formed the scales that has reasonable internal consistency reliability Hence, the research constructs satisfied the test of construct reliability