Volume 21 Issue 3 - January 13, 2012 PDF
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Consumer Perceptions of Interface Quality, Security and Loyalty in Electronic Commerce
Hsin Hsin Chang* and Su Wen Chen
Department of Business Administration, College of Management, National Cheng Kung University
 
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In today’s competitive e-commerce environment, it is difficult to build customer loyalty because of the low switching costs when a competition is “just a click away” (Chen & Hitt, 2002; Yang & Peterson, 2004). Hence, online companies have been eager to launch loyalty programs whereby customers may obtain substantial benefits by conducting most of their online shopping on one website (positive lock-in). Customer interface quality, perceived security and customer loyalty have been identified as critical factors for success in e-commerce. However, few studies have examined whether the customer interface and its perceived security affect customer satisfaction and switching costs, and in turn, influence customer loyalty. Specifically, some managers have argued that switching costs may no longer be as effective as it was in the past and be contingent upon different business situations (Yang & Peterson, 2004). Thus, further investigation into the role of switching costs in an e-commerce environment is needed.

In order to understand the relationships among customer interface quality, perceived security, customer satisfaction, switching costs, and customer loyalty, we developed a research model (see Figure 1) for testing the relationships among constructs based on cognition-affect-behavior (C-A-B) model. Cognition consists of beliefs, thoughts, or perceptions formed through interaction with marketing stimuli (e.g. products, services, and shopping environments). Affect refers to a favorable disposition toward a stimulus that leads to a relative preference for the product in that particular stimulus. Based on the model, our study posited that customer perceptions of interface quality and security (i.e. cognition) formed through interaction with an e-commerce website positively affected customer satisfaction and switching costs (i.e. the affect), and thus customer loyalty (i.e. behavioral intention).

Customer interface quality is a multi-faceted concept that records the shoppers’ perspective from pre- to post-purchase (Negash, Ryan, & Igbaria, 2003). Since there are several components contributing to customer interface quality, a single study cannot include all possible customer interface features from all previous studies. For an online store, the customer interface serves as the store atmospherics (Eroglu, Machleit, & Davis, 2001; Éthier, Hadaya, Talbot, & Cadieux, 2006), which is the attempt to design web environments that produce positive emotional effects in the buyer that increases the chance of making a sale. We therefore adopted four components of customer interface quality that deal with this atmosphere: convenience, interactivity, customization, and character.

In e-commerce, security refers to perceptions about security regarding the means of payment and mechanisms for the storage and transmission of information. The lack of perceived security is a primary reason why many consumers do not shop online. Hence, a major concern of online customers is how secure their transactions are. Accordingly, we defined perceived security as the extent to which it is believed that an e-commerce website is secure for transmitting sensitive information.

From an environmental psychology perspective, physical store atmospherics elicit cognitive responses, influencing people’s beliefs about a place (Donovan & Rossiter, 1982). For an online store, the customer interface replaces the atmosphere of the physical store, and thus serves as an online environmental cue, especially during transactions. Therefore, if a website is aesthetically pleasing, customized and well-organized, consumers may believe that the online store is willing to invest in maintaining a relationship with them, and consequently may regard the online retailer as trustworthy (Koufaris & Hampton-Sosa, 2004), thus raising the level of perceived security. Hence, we posited that:

H1: Customer interface quality has a significant positive influence on perceived security.

Customer satisfaction is an affective response to purchase situations, and is an important goal in consumer marketing. There are various definitions of customer satisfaction appearing in the literature. Base on pervious studies, we treat customer satisfaction as cumulative in defining customer satisfaction as the customer contentment regarding their prior purchasing experience with a specific website. Switching costs have been investigated from many perspectives. It is apparent that switching costs are not only economic in nature, but can also be psychological and emotional. We thus defined switching costs as the consumers perceptions of the time, money, and effort associated with changing e-service providers.

Studies have indicated that customer satisfaction toward a website depends primarily on the evaluation of the performance of various website attributes. Specifically, the impact of website interface quality on satisfaction has received some attention. Furthermore, despite the ease of making comparisons online, online shoppers perform less comparison shopping than brick and mortar shoppers. This is because the search costs associated with shopping across online stores increases with the number of competing alternatives. A good website avoids wasting the customer’s time by providing orderly screens, simple search paths, fast and readable product presentations, and simple navigation, which in turn reduces customer switching behavior. Hence, we posited that:

H2: Customer interface quality has a significant positive influence on customer satisfaction.

H3: Customer interface quality has a significant positive influence on switching costs.

Consumers’ attitudes and beliefs regarding security have significant effects on their intention to purchase online, since they risk the loss of sensitive information and financial costs of fraud. According to social exchange theory (Blau, 1964), exit from, or maintenance of, exchange relationships depends on future expectations regarding the costs and benefits of the relationships, weighted against the expected benefits of the alternatives. In e-commerce, customers have been found to value the security of their private data very highly. Thus, online customers tend to keep on using a website that is perceived to have high security. This implies that high switching costs are engendered when a customer perceives one e-commerce website as having reliable security, and so it is reasonable to assume that high perceived security is associated with high switching costs. We thus posited that:

H4: Perceived security has a significant positive influence on customer satisfaction.

H5: Perceived security has a significant positive influence on switching costs.

Most of the early related literature emphasizes the behavioral dimensions of loyalty, such as repeat purchase behavior, concentrating on the development of models designed to predict repurchase rates. In recent years, the marketing literature has increasingly treated customer loyalty as an attitude construct. We thus defined customer loyalty attitudinally as a customer’s favorable attitude toward an e-commerce website that predisposes the customer to repeat buying behavior.

Satisfaction reflects online customers’ cumulative impressions of a specific website’s performance. According to expectations-disconfirmation theory (Oliver, 1980), when customers are satisfied with a specific website, they believe that it will deliver what they expect. Therefore, customer satisfaction acts as an antecedent to loyalty. In addition to customer satisfaction having a significant association with customer loyalty, switching costs also have explanatory power.

The moderating effect of switching costs on the customer satisfaction-loyalty link was been found to be negative in much empirical research (e.g., Aydin & Ozer, 2005; Jones, Mothersbaugh, & Beatty, 2000). Those studies thus suggested that the influence of customer satisfaction on customer loyalty decreases under conditions where high switching costs are perceived by customers. In e-commerce, switching costs include not only those that can be measured in monetary terms, but also the psychological effect of becoming a customer of a new product or service provider, and the time and effort involved in buying products from a new provider. Switching costs can thus increase online customer dependence on an existing provider. Based on the above statement, this study thus posited the following hypotheses:

H6: Customer satisfaction has a significant positive influence on customer loyalty.

H7: Switching costs have a significant positive influence on customer loyalty.

H8: The relationship between customer satisfaction and loyalty is weaker when customers perceive higher switching costs.

Our research subjects were adults in Taiwan who had at least one year’s online shopping experience. The respondents were asked to fill out the questionnaire with a ‘familiar e-commerce website’ in mind. Data was collected with a web survey. The main survey had 363 responses. A total of 49 invalid questionnaires, that were incomplete or gave the same rating for all items, were eliminated, and 314 questionnaires were retained for analysis.

Empirical analyses were performed using SEM analysis. We first developed the measurement model by conducting confirmatory factor analysis (CFA). The structural equation model was then estimated for hypotheses testing. The analytical results show all path coefficients(H1, H2, H4, H5, H6, and H7), except for the path of interface quality to switching costs (H3), were significant at the 95% level. In addition, our study showed that switching costs positively moderated the effect of customer satisfaction on customer loyalty, contrary to hypothesis 8.
Fig. 1 Research model
                      
Our study contributed to the field related to the creation of customer loyalty in e-commerce. First, while perceived security has been identified as a key to e-commerce, little research has investigated the factors that affect it. Our results showed that customer interface quality could increase customer perceptions of security. Furthermore, our study examined the influence of customer interface quality and perceived security on customer loyalty, as well as the mediating roles of customer satisfaction and switching costs based on the cognition-affect-behavior model. Our empirical results confirmed that customer interface quality and perceived security positively affected customer satisfaction and switching costs, and consequently customer loyalty. Building customer loyalty in e-commerce is a difficult challenge that requires online companies to differentiate themselves from their competitors. Our study suggested that practitioners should consider focusing more on customer interface design in their marketing strategies, particularly with regard to convenience, interactivity, customization, and character.

Finally, our results showed a positive moderating effect of switching costs on the relationship between customer satisfaction and customer loyalty, which differs from some previous research. One reasonable explanation is that the moderating effect of switching costs on the customer satisfaction-loyalty link is affected by market structure. If the market has a single or overwhelmingly large provider resulting in high switching costs for customers, then satisfaction should have little effect on loyalty. In contrast, if the market is highly competitive, resulting in low switching costs, then customers will be more sensitive to their satisfaction level. In the context of e-commerce, the market is often highly competitive, so customers face only minimal barriers to switching product or service providers. Therefore, it is reasonable to show a positive interaction effect of switching costs and customer satisfaction on customer loyalty. These findings contributed to providing evidence for supporting the view that the moderating effect of switching costs on the relationships between customer satisfaction and customer loyalty is contingent on situational variables, such as the type of business, customers and products.
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