Relationship Between the Perceived Role of E-commerce Privacy Seal and the Perceived Customer Trust - Research Paper Example

Relationship Between the Perceived Role of Ecommerce Privacy Seal and the Perceived Customer Trust Statement of the Problem A survey conducted generated conflicting outcomes. The said survey revealed the current levels that consumer has on the Web Assurance Seal Services (WASSs). The survey was designed to address the question on what current levels consumers' have or know about web privacy seals and consumers' perceived importance on seal’s that is embedded on business-to-consumer (B2C) e-commerce websites. This would illustrate the possible influence of the consumers’ needs to learn or be educated in order for them to be aware on the existence of such seals and that they would be ensured of protection against threats. By informing the consumers that there exists a system to reduce the probability against attacks, educating these customers regarding the Web Assurance Seal Services and making them aware of the perceived importance on web assurance seals, consumers might start using the E-Commerce websites in doing their shopping. The outcomes revealed that consumer education regarding security and privacy threats should be facilitated. There is a need also to include the role of web assurance seals does increase awareness and perceived importance the seals. However, it is of importance to note that customers still are unlikely to adapt using these seals as an indicator of the trustworthiness of site. Purpose of the Study The main objective of this study is to measure consumer’s awareness and confidence to use E-Commerce as their way of purchasing products. And also to verify if there is a relation to the website interface and its process for consumer’s to gain their trust and transact purchases. The study would determine if having a well-designed process and interface would result to a major impact in terms of sales generated. The Internet and the World Wide Web have given a lot of business opportunities for companies and also gave these companies a way to communicate with their customers. Since the start of the 1990s, a lot of commercial Web sites started to publish their products online and up to this date it continues to climb each year. Those Web sites has a lot to offer and their benefits to the companies that created them have flourished. For example, theses companies gave customers a cost-effective way to advertise / sell their products to a global market. Internet users got the most benefit from these commercial Web sites that offer 24 hour shopping convenience, it gave prospecting customers a lot of options, one that didn’t their limitations. With this technology customers can look for specific brands and can look at price comparisons. Most importantly, the Internet gave customers around the world the capability to inter act or do a two-way information exchange which increases opportunity for buyers and sellers alike and can even come up with an arrangement. Web sites contain a lot of free information that customers can easily access so that they can decide as to what products or services they would purchase. It would also provide online vendors by listing their contact information or answers to Frequently Asked Questions. In line with these, having the capability to inter-act with online customers gives companies the opportunity to collect information about their customers and to personalize communication with consumers in new and numerous ways. As an example of data gathering, Operating systems are configured automatically in such a way and as a default it uses data-gathering techniques such as "cookies" or site registration. In order for e-commerce to work, both parties (online companies and Internet consumers) should trust each other as well as provide pertinent data and information. But customers are more prone to attacks since their information is more critical. Their Personal information such as name, address, and credit card number are necessary for online purchase transactions. More detailed information about users' Internet behavior is required for some Web site customization and personalization. However, there are a few customers that are not comfortable and refrain from giving their information, this is the hurdle that e-commerce needs to overcome. These consumers turn their back on electronic commerce due to this fact. As a matter of fact, studies revealed that the biggest problem that e-commerce is facing that slowed if not stopped their growth is the consumer’s fears on privacy and security online. There are a lot of fears about online privacy. Fears that were discussed was the current technology’s capabilities with regards to having somewhat of a tool or recorded database that shows every aspect of Internet users' behavior, and media reports helped in escalating these fears by publishing reports on violations of Web sites on their own privacy agreements by distributing customer information without permission. There was a very recent opinion poll on Internet users that showed the huge impact of the public's concern over online privacy. All the results that were gathered on the subject of online privacy showed that everyone are aware of the risks and very concerned about the threats to their privacy when consumers use electronic networks. Majority of consumers indicated their concern on unknown parties getting personal information and because of this, it gives internet hackers an opportunity to steal credit card information and this takes place during business transactions on the Web. The public's fears are well supported by the FBI's Internet Fraud Complaint Center which recorded 48,252 complaints to law enforcement or regulatory agencies in 2002 alone. The total dollar loss from online fraud was estimated to be $54 million. According to recent published reports this situation is becoming worse every year. Since 1998 there have been increased reports on internet fraud statistics as documented by the National Consumer League's in their annual report. As of today, there are still a large amount of Commercial Websites that do not offer consumers privacy. Records that came from the Federal Trade Commission indicated that between 85-97% of commercial Web sites gathers at least one type of personal information from visiting internet users, such as names and email addresses. What’s worst is that many Web sites do not inform internet users that they are collecting these data. They do not even offer a reason for collecting such information. They do not even offer a reason for collecting such information. There was a report that FTC released in 2000 which indicated that less than 20% of E-Commerce Websites displayed a comprehensive privacy policy disclaimer. Due to thus findings it is not a surprising that a lot of Internet users are very hesitant in disclosing any personal information online. A survey done by the TRUSTe Corporation reported that 41% of their survey respondents close the Web page rather than giving any personal information. If only websites can assure that customer’s personal information would not be disclosed there would have been an estimated $6 billion or more per year through e-commerce if privacy was not such a concern. Having these data, a question was raised on how important it is to engage in e-commerce and how to improve communication with customers. These are the factors that influence consumers in disclosing personal data and information. Some researchers in the field of communication, marketing, and psychology gave their opinions and suggestions. An example would be, the company would show that they can be trusted in protecting the consumer’s perceived privacy. Past Internet experience and General privacy concern was cited as important indicators in both commercial and online exchange. There have been prior theories and researches done, and uses a model of how these variables affect information disclosure on the Internet. This model was formulated to address the question on the role of trust and past online behavior in information disclosure, and at the same time exploring the concurrent influences of users' privacy perceptions and attitudes toward the Web site sponsor. Together with this, the study would also explore the quality of information disclosed on the Internet. Research Model Using the concept of today’s shopper’s, there has been speculations that consumer’s judge’s the store on their appearance before they make their purchases. Bearing that in mind, means that there would be a big possibility that when a well designed E-Commerce website is available, there would be a greater chance for that website to garner sales. But the visual cues or what the customer sees allows them to evaluate the shop's professionalism, competence and trustworthiness by comparing the current shop with other shops that the customer was able to look at. But this study is focused on E-Commerce which means transactions or purchases would be done using the internet. Majority of consumers are not well aware of shopping on-line and some who are aware and currently purchases products online are not that much aware of it’s high risk. Only those consumers that are a bit if not highly technical and or frequent users are aware of the risk and already have measures to combat such risk. As of this writing, E-Commerce is a failure since consumers have no confidence in purchasing products online due to their inadequate knowledge on technologies. There have been a lot of reports against hacking and theft on the internet but there’s no report in boosting E-Commerce. This type of report gives a negative feedback and pushes away consumers in using E-Commerce websites. So building trust with consumers and E-Commerce websites is a very big challenge. This paper would try to evaluate how this issue is going to be addressed and if it’s feasible. Internet user’s level of confidence to transact on a particular website is determined on how the website would make them feel that they would and can protect their privacy which would have a huge effect on their trust of the site. But the fact of the matter is that everyone has their own interpretation on the subject of perceptions of privacy protection, cultural and other factors also play a vital role. Web site design can also be a factor which would show the contents on the site that also mentions about privacy protection With regards to the sites design, site complexity and layout, it showed that it has an affect on customer’s perceptions of the authority of the site, which would impact privacy perceptions. What is contained on the Web site would be a determining factor and would influence internet users to trust the site especially those sites that publish their perceptions of the site's privacy protection using such elements as privacy statements and seals, an example of which are, TRUSTe or BBBonline. After further research, for customers to gain the sites trust and eventually increase customer’s regards to the sponsoring companies, the website content should give much attention in improving its perceptions of privacy protection using features such as privacy statements and seals. A site that focuses on these features would earn the trust of internet users. Showing and respecting customer’s needs is an important factor that would promote and improve customer relations and the companies’ reputation, which can be interpreted as the consumer's overall evaluation of the company. On the subject of trust, the website that explains the procedures why they need such information collection would increases consumers' comfortability of security and organizational trust. Furthermore, those websites that have privacy policies that are easy-to-understand and explains how the company will use the customer information would increase trust on a Web site. Survey’s showed that if a website would post their privacy statements or display privacy seals, consumers are more willing to provide personal information to the Web sites. Using these data, it indicates that the level to which Internet users would trust a commercial Web site are those who can show that it would protect their privacy, these would eventually give positive result to their overall regard for the company and which would translate to eventually trusting the company's Web site. Concern for Privacy A person's general concern for privacy is another factor that can predict trust of commercial Web sites. Arguments indicate that there are some individuals who have their interpretation in a matter of degree. These people want to have a value of personal control over information that they would divulge about themselves. On the subject of information privacy values, it was gathered that there’s a negative relationship between the value people place on privacy and perceptions of control over personal information, which is the very foundation of trust as defined earlier. It is hard to find articles online regarding these matter, but there were several individuals' that performed research on this subject stated that the concern for privacy has increased, internet users are registering on Web sites that shows less of not no regards for information privacy, internet users would provide incomplete if not false information when they do register, since they have less trust in the Web site. Debates regarding one's general trusting stance can generalize to trust on Internet-based companies. This theory suggests that Internet users' general concern for online privacy will negatively predict their trust of commercial Web sites. Research Question This paper will determine what needs to be done for consumer’s to gain trust on E-Commerce websites. The questions that would be taken up on the survey are as follows: 1.) Would consumers trust E-Commerce website and do their shopping online? 2.) What would it take to gain their trust? 3.) Would a well designed website do the trick? 4.) Would strict security measures on the website would be the ultimate solution? 5.) Are you aware that you can do your shopping online? Bearing this in mind, a survey was done to see whether these questions can be answered and what the current mindset of shoppers is in this era or where we are in terms on consumers trust on E-Commerce websites and to know what kind of human interaction can be used as an interface to induce trust. Hypothesis There are a lot of Consumer decision-making researches done previously. The existing cognitive model thinks that consumers search information on risks and benefits. Then they will compare them against each other to reach a decision. Trust is a device for reducing complications. A number of theories were tested and formulated and some of them showed the users tend to decline in giving up information on websites that do not show them that their information is safe. Internet users' are more concerned on providing personal information online especially if the website is not showing any security or disclosure agreements negatively influences their past online information disclosure. The amount of time users spend on the Internet to the company's Web site. Relevance and Significance of the Study This research we would show the different types of shoppers and how they are different from one another. In this study the design of the interface has a huge impact. Those very inexperienced Internet users see the greatest risk on how the system was designed; some of them believe that even those vendors that are trustworthy does not have the capability to protect them from the risks related to the Internet. Barriers and Issues of the Study E-Commerce websites vary in so many ways. Each website has its own definitions and processes that can be as easy and as difficult depending on the products that each site carries. Language barrier also has a very big impact on E-commerce websites. To successfully overcome the present state of E-Commerce, there’s a lot of ground work that needs to be covered. Most of the issues are technology specific. The biggest issue is people’s acceptance of the technology. Once this is achieved, consumers would then evolve and cultural change would then follow. Methodology Acknowledging that the literature contains contradictory evidence of the impact of reading the privacy statement on perceptions of control and trust, we posit the following hypotheses that are consistent with the predominant findings of the trust and privacy literature: Data collection and Participants This study would be using as a method of getting the results is by doing some survey. 20 participants would be given a series of questions which would determine whether they know something if not anything about E-Commerce and its risk. This survey would also gather enough data to identify the barrier that E-Commerce has to overcome to be successful. Profile of Participants on Socio-Demographic Variables and Relevant Internet Dimensions (From the Questionnaire) Variable Distribution Sex Male Female Age Mean Education High School or less College University Experience on the Internet Less than 4 years 4 to 6 years 6 years and over Have already made an online purchase Yes Survey Questionnaire: A Instruction: Please put a X mark on the appropriate answer and give appropriate reason for NO answers YES NO Remarks 1.) Have you used the internet to purchase any product? 2.) How many times have you purchased any product online? 3.) Are you aware of the risk? 4.) Would the website design encourage you to purchase online? 5.) Do you know anything about security when purchasing online? Survey Questionnaire: B Instructions : Please give a brief description of your answer Answer 1.) What would be your apprehension in purchasing online? 2.) Can you give us an insight of your experience purchasing online? 3.) Will you continue purchasing online? 4.) Will you encourage others to purchase online? Discussion There are lots of arguments between commercial Web sites and online consumers. Commercial Websites argued that for them to survive in the industry it is important for them to have the ability to collect and use customers' personal information. But consumers are concerned about their privacy, which makes a lot of consumers reluctant to provide information while online. Looking into this argument, this study would like to find out and perform a test using a model of Web-based disclosure that emphasizes trust. Commercial websites probably are not aware that without consumer trust they would not survive, the most that they can do is to promote and develop a profitable exchange relationships with online customers and earn their trust. Previous experience of internet users tends to show online behavior and attitude toward the Web site; this is an important factor in the decision to disclose personal information to a commercial Web site. When applying this theoretical model to consumer psychology, the result would find that it is a good predictor of actual purchasing behavior. These theories that predict users' attitudes toward an Internet-based store can affect their willingness to buy from that store. The experiment found out that attitudes can directly affect online purchase decisions. Consumers trust is the key for the success of e-commerce. To promote consumer trust, many e-commerce companies are desperately searching for new ideas and experimenting with various trust-building strategies, which include joining with third-party assurance programs. This study would try to evaluate a model describing the relationship between third-party assurance seals, trust, and online purchasing intentions. There were Five manipulated simulations on retail website that were used to test eight model-derived hypotheses. Partial results support hypothesized relationships on the following: between disposition to trust trust of the e-retailer perceived risk attitude toward purchasing from the e-retailer intention to purchase These hypotheses address a positive relationship between the viewing of assurance seals and consumer trust of a specific e-commerce website are not supported. Contrary to early studies, there was a small but significant and positive impact on post hoc results, which revealed that one seal type, the privacy assurance seal, consumers’ trusted an unfamiliar e-commerce website. To sum it all up, the results shows that companies should put emphasis on consumers' sensitivity with their privacy concerns. Otherwise they would fail to generate business. A report released by the Better Business Bureau in 2001 disclosed that people who do not to purchase products or services online have two main reasons: 1) They don’t trust the website regarding their security of online shopping. 2) They also don’t trust the reliability of businesses on the Web. Other surveys, regardless if it is academic, practitioner, and government-sponsored, revealed the same reasons why consumers do not want to make purchases online. This shows an underlying gap between e-commerce companies’ desire in attracting shoppers to their E-Commerce websites and many consumers' trust in those websites. To address the identified gap, third-party assurance services have entered the e-commerce playing field. E-Commerce companies’ are hoping that with the help of these third party assurance seals, would build consumer trust and would start increased online sales due to displaying these third-party assurance seals on their websites. Theoretical foundation research on the role of trust in garnering consumer acceptance of e-commerce has recently begun to produce conceptual and empirical results. The use of third-party assurance seals received substantial support from those in the e-commerce industry; it promoted building and maintaining trust between consumers and online merchants. The few published results have tested the effects of assurance seals on intention to purchase or consumer expectations of specific merchant behaviors. This study would further explore the research stream by addressing the following two research questions: 1. What is the effect of viewing third-party assurance seals have on a consumer's trust of an unfamiliar e-commerce website? 2. What is the effect of trust on a consumer's intention to purchase from an unfamiliar e-commerce website? TRUST Trust has received considerable attention in the business and social science literature. Based on a comprehensive review of trust research, it indicates that trust integrates common dimensions from various disciplines. Rousseau et al. (1998 pg. 395) define trust as "...a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another." A working definition of consumer trust has been tailored from Rousseau, et al.'s more general definition. For this study, trust in an e-commerce company is specifically defined as a consumer’s acceptance on vulnerability in an online transaction based on their positive expectations regarding an e-commerce company’s future behaviors. This definition clearly stipulates that trust within the context of social exchange theory (SET), which states that people make their decisions on social relationships based on predicted future behaviors of others, anticipated rewards and costs, perceived dependence, and control in relationships. 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