E-Commerce Why Is Consumer Trust

e-Commerce

Why is consumer trust important in e-commerce? Compare traditional (non e-commerce) markets to e-commerce markets.

Trust is the most critical success factor there is in e-commerce as customers must believe that an online retailer is not only going to do what they say they will, but will also compete transactions as securely, accurately and efficiently as possible. All of these factors are combined to form the expectations of customers purchasing over website and through e-commerce channels. Trust is such a critical catalyst of e-commerce websites that without it, any online initiative would eventually fail and go bankrupt without it (Kord, Yaghoubi, Khani, Esmaeali, 2011). In an era of skepticism and distrust, consumers today look for assurance of e-commerce sites being secure, financially stable and capable of not only completing the transaction but also being able to protect consumer privacy (Antoniou, Batten, 2011). The determinants of trust include certifications of online retailers by third party services denoting safety and security of transaction applications, certifications and certificates showing protection form malware, and visible evidence of strong security measures including 128-bit encryption for transactions (Beatty, Reay, Dick, Miller, 2011).

In comparison, non-e-commerce or brick-and-mortar stores have the advantage of being able to have their customers in the store, and can prove by physical location and investments in the store that they are a going concern. There is also the evidence of staff, management, inventory, and the actual location and its value relative to other retail establishments, as defined by its location. in-store trust is significantly easier to achieve as a result over e-commerce.

Given the global nature of online transactions, why consumer trust differs across cultures?

There are a myriad of factors involved in why consumer trust differs significantly across cultures. Of the many frameworks that have attempted to define these differences, one of the most effective in understanding why trust differs so significantly is the Hofstede Model of Cultural Dimensions (Hofstede, 1983). This framework was originally devised by Dr. Geert Hofstede to quantify the differences between cultures on five core dimensions. It is commonly used for completely analyses of why one culture has trouble intermeshing and integrating with another on a workforce and individual level. One of the most valuable aspects of Cultural Dimensions Model is the ability to see how one culture sees time and transactions from a completely different vantage point compared to another. The five dimensions of this model include the Personal Distance Index (PDI), Individuality (IDV), Masculinity (MAS), Uncertainty Avoidance (UAI) and Long-Term Orientation (LTO). Country comparisons can be completed using the application Dr., Hofstede makes available on his website at this location: http://geert-hofstede.com/countries.html. Each of these dimensions shows how drastically different cultures are from each other, with the aspects of PDI, UAI and LTO being the most significant differentiators across cultures on a consistent basis. The Hofstede Model shows why trust is hard to achieve across cultures given how drastically different values, perceptions and the development of expectations are. It also shows why it is so critical to get completely acclimated to a given culture before attempt to sell into it.