Risk,Trust And E-Commerce

Online-Trading-Risk-Rules

Businesses have understood that use of cutting edge technology per se does not lead to creation of full trust in customers which is needed from customers’ side to buy online. All superior technology can do is building technology trust, which is the level of confidence customers feel regarding the technology used by an online retailer. But another type of trust is more essential to persuade customers into buying online from a seller and that is called relationship trust. Customers should believe in the competence, reliability and integrity of an online entity before involving in any transaction with it. An online seller could be successful when it can communicate cues of competence and honesty to viewers in a matter of seconds to keep them on the website and afterwards lead them to buying online or at least generation of sales leads. Ease of use, simplicity of surfing and completing a purchase order in addition to accreditation of a recognized third party displayed on a website all can contribute to the development of relationship trust.  Apart from all the measures taken by businesses to build up trustworthiness image of themselves, it is noteworthy to take into account the heterogeneity of online customers in terms of their perception towards risk. Those who are risk averse see less benefit and more cost in purchasing online as they have concerns about being exposed to online theft and other types of fraud and also afraid of buying something online and receiving a product with different specifications. At the other side of the risk continuum are risk takers, those who identify lots of benefits in online shopping because of cost and time savings which far and away outweighs the negligible risk associated with online transactions. What type of customers a business is dealing with would determine the required investment for building technology and relationship trust which are the prerequisite of engaging customers in online purchasing (Kim & Byramjee 2014).

Reference:Kim, S, & Byramjee, F 2014, ‘Effects of Risks on Online Consumers’ Purchasing Behavior: Are They Risk-Averse or Risk-Taking?’, Journal Of Applied Business Research, 30, 1, pp. 161-171, EconLit, EBSCOhost

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8 thoughts on “Risk,Trust And E-Commerce

  1. I personally see lots of benefits of online shopping however I agree there is need for lots of trust on the side of the consumer when making a purchase online. Just last month I purchased a pair of shoes online and I did not receive them. After weeks of emails and phone calls trying to track my delivery I eventually got my shoes over a month after the expected delivery date! I think this shows some risks you were talking about in your post as although it may not of been the company’s fault, I probably will never buy online from them again. So even though I purchased online and had no face to face customer service from this company, it is still important for these companies who sell online to value the customer and assist them in whatever way possible.

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  2. Technology makes more resources and products available for the consumer to choose by just surfing online. On the one hand, this is beneficial to both sellers and consumers in terms of convenience. However, on the other hand, trust issue, consumer satisfaction as well as online fraud and online bank transaction safety also come with this high-tech trend. For example, my friend bought a Sony camera from eBay with much lower price than the price in retail store, but it is not brand new as the online seller said and much different fromcthe picture post. It was a online fraud and lead to consumer low satisfation. as a result, my friend might never want to engage in online purchasing again.

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  3. It is interesting because I also had a very bad experience with eBay.I needed to buy a text book for one of my units and found a new copy on eBay for half of the normal price.The tile,author,edition and ISBN were a perfect match for the book prescribed by the lecturer so I ordered the book.Since it was out of stock it took around 25 days to receive it but surprisingly the content of the book was a kind of short version of the original one and all the case studies which were critical part of learning that marketing unit were missing.I got so disappointed as I had to buy the original one and did not have the choice to return it back.I don’t remember was that because of the terms of the sale or the complexity of returning a purchased product.Anyhow I did not voice my dissatisfaction and anger but I was feeling ripped off add angry.Since that incident I have never even opened emails sent by them promoting different products.In my case I went for shopping the book online and perceived a medium level of risk because of not having the experience of buying a book online but I was happy to take the risk because of my financial situation at that point in time but after this incident I moved from a semi risk taker person to a position of being more risk averse when it comes to high involvement purchase like my university subject book.To wrap up,it was not easy for me to trust the E-commerce site of eBay at the first place but was so easy dislike it and leave forever.one incident was enough to transfer eBay from my evoked set to Inept set when contemplating about online purchases.

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  4. I do agree that relationship trust plays an important role on consumers’ behaviour especially in terms of online business.Online shopping provides a convience stage for clients to purchase what they need,however,a lot of concerns and considerations have occured as well and more importantly,as compared with traditional shopping,online shopping is more difficult to be monitored,without reliable trust relationship between customers and suppliers,the business can not be made successfully.

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  5. Interesting article and by reading above comments it’s understood that everyone have had a bad experience with online shopping happened to either themselves or someone they know. Yet it’s still so hard to miss out on a bargain and its especially true for a female. In my profession I’m amazed at how quick consumers are to trust someone over the phone and give out credit and information. I also come across other consumers who are affirmative about not giving any information over the phone.

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  6. There will always a risk if you buy online, but some people prefer to do online shopping than go to the store physically. Generally people choose to buy online because the items are a lot cheaper and can be done anytime they want. As what you said above is correct, trusting the online entity or website is the prerequisite for online shopper customer. Me personally, I always look at how secure the online website is before I am buying anything from it. Nowadays, some well known online shopping websites (e.g. Ebay) have a security policy in place to protect their buyers and sellers. You can raise a dispute to the seller if you are not satisfied with them and Ebay can help you with that. http://pages.ebay.com.au/help/policies/overview.html. Besides that, online websites are usually associated with a secure payment portal such as PayPal. https://www.paypal.com/au/webapps/mpp/why-paypal/. Therefore, shopping online becomes a lot safer and more convenient. The risk has been minimised to provided a safer trade environment.

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  7. It seem to be true that how much technology e-commerce important for marketing nowadays.This is interesting topic to talk about how to persuade customer to purchase online . There are a high level of preceived risk for customer to purchasing online such as a lack of tangible and how to make customer be trust in website and can rely on a payment online system.Some shopping website is so complicated step. Some customer preceive a risk performance such as what if the product was broken during deliver.They might be uncertain in product quality by shopping online. How to make sure for customer that they will not be waiting a product for long. However,that will be worth if marketer can eliminate customer negative aspect about purchasing online by create trust and attrative conditions and price such as sale promotion. As well as a payment step and a shopping process for customer should be easy to understand and simple. Some customer are not really shopping online, if it is not cheaper than shopping at store which they can touch its texture and see its size feature, real colour. Therefore , this is a marketer duty to reduce preceived risk and create a good experience shopping online and change their negative perspective of shopping online to be positive.

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  8. Online customers are not one homogenous group but rather have different assessments of the risk involved in online transactions. While organizations continues to make attempts to project themselves as trustworthy and build “relationship trust” with consumers, clients who are risk averse will still be hesitant to make online transactions, while the risk takers will find it relatively easy to make online transactions.

    I think eventually online transactions will become so ubiquitous and their convenience so widely acknowledged that even the risk averse consumers will have to reassess their positions.

    Perhaps more effort needs to be taken to persuade the risk averse consumers to adopt online trading, complaints should be quickly addressed and there should be mechanisms to protect the clients from would be fraudsters. Overall it is probably only a matter of time before everyone embraces online transactions.

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