What is trust and why is it important in ecommerce?

Trust is one of the most important factors of trade


Whether business-to-consumer, business-to-business, or consumer-to-consumer, trust is essential for a successful exchange to occur between two parties. Economic scholars around the world have characterized ‘trust’ as having three distinct features: uncertainty, vulnerability and dependence.1


Concerns around these features are substantially elevated for consumers in online shopping; if the perceived potential risks outweigh the perceived benefit, they may just opt for the physical shop instead. Add to this equation the notion of shopping cross-border, and the perceived risks increase significantly in the minds of consumers. Marketing experts agree, consumer intention to purchase online is strongly correlated, and therefore a reflection of trust intentions.2


Countless studies exploring factors positively and negatively correlated with conversion (incl. first-time purchasing and repurchasing) consistently reveal consumer trust as one of the main contributors to purchasing intention.3 4 5 6


Moreover, the theme of trust is woven throughout all facets of online shopping concerns amongst consumers, even tangentially.7 The solution for eshops desiring to sell more is scientifically clear: increase consumer trust, increase conversion (Table 1 below). Armed with this information, the next question arises for SMEs in ecommerce: how do eshops instill a sense of trust amongst shoppers?


What is trust?


Consumer trust is composed of three specific constructs: perceived security control (also referred to in this paper as perceived security), reputation and website investment, with perceived security having the most influence on consumer trust (see table 1).10


For further definition, Security control encompasses five sub-factors:

  • authentication control
  • nonrepudiation control
  • privacy control
  • confidentiality control
  • data-integrity control.11


Perceived security control has, surprisingly, nothing to do with an eshop’s actual level of security control, but instead how consumers perceive the security control of an eshop.12


Cited Sources


1 Corbitt, B.J., Thanasankit, T., Yi, H. (2003). Trust and e-commerce: a study of consumer
perceptions. Electronic Commerce Research and Applications, 2(2003), 203-215.
2 Schlosser, A. E., White, T. B., and Lloyd, S. M. 2006. Converting Web Site Visitors into Buyers:
How Web Site Investment Increases Consumer Trusting Beliefs and Online Purchase Intentions.
Journal of Marketing, 70(2006), 133-148.
3 J.A. Quelch, L.R. Klein. The internet and international marketing. Sloan Management Review
60/75 (1996).
4 S. Ganesan. Determinants of long term orientation in buyer– seller relationships. Journal of
Marketing, 58 (1994). 1–19.
5 S.L. Jarvenpaa, N. Tractinsky, M. Vitale. Consumer trust in an internet store. Information
Technology and Management, 1 (2000). 45–71.
6 P. Rantnasingham, K. Kumar. Trading partner trust in electronic commerce participation.
Proceedings of the Twenty-first International Conference on Information Systems. Brisbane,
Australia, 2000.
7 Gefen, D. et al. (2003). Trust and TAM in Online Shopping: An Integrated Model. MIS Quarterly,
27(2003), 51-90.

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