Managing Consumer Trust in Intercultural E-Commerce Transactions
Jeffrey Scott Ray
Swiss Management Center (SMC) University; University of Maryland, Baltimore County (UMBC)
November 26, 2011
The importance of consumer trust to the success of online business transactions is well documented. An analytical look at the typical online purchase indicates the level of trust required to complete a transaction is dependent on such factors as: the privacy information consumers must provide, the confidence levels consumers have in their suppliers, the perceived quality of the goods, the supplier’s delivery service, customer service options, and the security of the transaction. Consumers are justifiably concerned about the privacy of the personal data they must submit over the internet to complete an online purchase. They perceive security risks to the point they may not want to engage in online transactions. If suppliers can gain consumer confidence and demonstrate the quality of the offered goods via detailed product descriptions in their website content, they can overcome security-related fears and entice consumers to engage in online transactions. Suppliers have resorted to using product and vendor reviews to allow consumers to increase their level of trust in the transaction by vicariously adopting the experiences of previous customers. This practice is now an important part of online purchases and has helped raise consumer confidence.
Consumer trust is found to be related to customer satisfaction. It takes a long time for new online customers to gain enough trust and satisfaction to evolve from a mode where they are learning how to conduct online transactions with the firm, to a collaborative mode focused on the relational components of the interactions with the firm that develop trust and lead to long-term business relationships. When customers have problems with online transactions, however, they can quickly become discouraged and distance themselves from the firm. It is imperative, therefore, to understand the customers’ interests and capabilities so a website interface can be developed around consumer profiles focused on anticipated online transactional skills and user preferences. Similarly, a comparison of online to traditional store front purchase transactions reveals the differing quality processes each approach entails, and allows web designers to address perceived risks new online consumers may experience. Finally, market globalization is also increasing the tendency of the world to act as one consumer market. When the buyer and seller are from different cultures, the messages and interactions between them can be misinterpreted. Consumers from different cultures may interpret website content and text differently than the message is intended to communicate. An analysis of how different cultures may affect online business transactions is included below to permit website designers to communicate using generic methods which have a lower probability of being misunderstood.
Customer attraction and retention remains a complex, elusive, but very important topic for online businesses. By analyzing online purchases within the framework of transactional and relational components, we can identify the more important aspects of how to build consumer trust with respect to conducting online transactions. Trust is established by ensuring a customer’s online transactional experience is positive, secure, and is supplemented by high quality products and services. Firms must design their websites to overcome cultural barriers when parties to transactions are from different countries, and establish trust with intercultural consumers as well.
Number of Pages in PDF File: 15
Keywords: personal information, privacy information, consumer trust, online purchasing, online transactions, cultural impacts, ethnocentrism, cultural barriers, overcoming cultural barriers, inter-cultural communictions, customer satisfaction
JEL Classification: F14, F15, F23, F22, L14, L15, O33, P45working papers series
Date posted: July 17, 2012
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