Abstract

Many consumers remain reluctant to purchase items from web-based stores, even stores displaying the AICPA/CICA Webtrust™ seal.  This reluctance reflects consumer distrust of online vendors.  This study looks at the issue of trust as it relates to small businesses operating online.  A survey was conducted to gather information about website techniques and practices currently used in small online stores, as well as perceptions of the effectiveness of these techniques and practices. 

The findings indicate that e-commerce websites often employ a variety of different assurance related techniques.  Customers are generally perceived as somewhat experienced internet shoppers who are concerned about privacy and security.  Six factors were found to be significant in explaining participant responses: “policies and procedures”, “seller legitimacy”, “seller information”, “transaction expectations”, “icons”, and “external validation”.   While most of these factors confirm the findings of earlier research, the composition of factors such as “seller legitimacy”, and “transaction expectations” suggests that small business websites may benefit by taking a multifaceted approach to allaying consumer fears. 

This study has implications for accountants wishing to expand web assurance practices.   The results of this study suggest that decision makers see a role for security-related icons such as the WebTrust™ seal in allaying consumer concerns.  At the same time, icons may be most valued by these decision makers when used in tandem with a variety of techniques that address the full range of customer concerns. 

Introduction

The ready availability of easy-to-use e-commerce shopping cart software and the unique opportunities associated with selling on the World Wide Web have resulted in the rapid growth of small enterprise (SE) online stores.  This growth has been dramatic in recent years; a 2004 survey found that the percentage of U.S. small businesses with an online presence has doubled to 70% in only two years (Saunders, 2004).   

At the same time, many consumers remain reluctant to purchase items from web-based stores.  Concerns about transaction security, privacy loss, the seller’s legitimacy, and even worries about merchandise quality can make consumers unwilling to shop (Odom et al., 2002; Van Den Berg and Lieshout, 2001; Van Slyke, Shim, and Johnson, 2006).  This lack of consumer trust is a particular concern for the SE, which typically lacks the name recognition of larger and more well-known retailers such as J.C. Penney or Wal-Mart. 

Accountants can play a role in mitigating the perceived risks associated with purchasing online by providing external validation of the website and its business practices.  The AICPA/CICA’s WebTrust™ Seal program was designed with just such a role in mind.  Developed in 1997, the program is intended to provide consumers with third-party verification of the legitimacy of the vendor and its business practices (AICPA, 2004).  Unfortunately, however, this program has not been particularly successful, with only 39 websites displaying the seal as recently as January 2005.  Kovar (2002) implies that one possible explanation for the limited effectiveness of the WebTrust™ seal may be that seals and icons only address one aspect of consumer’s multifaceted concerns.  Worries related to product quality and service remain unaddressed (Houston et al., 1999). 

The fact that seals and icons do not have a strong influence on consumer buying behaviors may represent a revenue-making opportunity for accountants providing assurance services.  As Kovar (2002) points out, “While designing web sites is the expertise of marketing, an opportunity for accountants might be providing “assurance” to the business regarding the design of their web site, both from the customer’s perspective and from a control perspective”.

Providing this additional assurance, however, requires an enhanced understanding of the techniques and practices most valued by business owners and managers.  Whereas an appreciation of consumer concerns is an excellent first step toward understanding what works from a business standpoint, it is not enough to know only about what works for the consumer.  Excessive costs, implementation issues, or other factors may reduce the value of a particular technique to the business.  This study takes a first step in understanding the practices most valued by businesses by examining SE trust-related website techniques and practices currently used in online stores, as well as managerial perceptions of the effectiveness of these techniques and practices. 

Background

   Trust is made up of beliefs about the other party (Geffen and Straub, 2004).  These beliefs can lead a consumer to anticipate that the other party will behave in a predictable manner, and so justify interacting with the other party.  Trust is, therefore, a necessary precondition to developing the intention to purchase.

Research into trust, and/or the antecedent conditions to developing the intention to buy goods, has found a number of elements in website design and content that may influence consumers’ development of trust.  Although most of the studies conducted to date examine the issue of trust from the consumer perspective, the elements identified are an excellent starting point for determining factors owner/manager decision makers are likely to find effective in allaying consumer concerns. 

Website Design Elements

   A number of studies report a relationship between a website’s professional appearance and the development of trust and/or intent to purchase.  Riegelsberger and Sasse (2001) assert that the “quality of the user interface” can be the single most important element when a consumer is making the decision whether to purchase from an online vendor.  Stephens (2004) finds a significant relationship between respondents’ willingness to trust and the layout, style, and navigation capability within a small hotel web site; similarly, Koufaris and Hampton-Sosa (2004) observe that ease of use of the website is a significant antecedent of consumer trust.  These results may be due to the perception that a well-designed site is more credible (Fogg et. al., 2002).

   Graphics may also play a role in establishing trust.  In a survey of potential consumers, the visual design of an online store, including color choices and inclusion of photographs and clipart were found to be positively related to consumer trust development (Wang and Emurian, 2005).  Similarly, Stephens (2004) observed a relationship between trust and the inclusion of the graphical images of the products being offered.   Steinbrück et al. (2002) found a positive relationship between inclusion of portraits of customer service staff and consumer trust.  This finding may not apply in all situations, however.  A study by Riegelsberger et al. (2003) suggests that the inclusion of customer service portraits may be effective, but only when included on poorly designed, untrustworthy web sites. 

   Related to website graphics are graphical icons and seals such as Verisign or the AICPA/CICA’s WebTrust™ seal.  A number of studies suggest that inclusion of seals (most notably the WebTrust™  seal) may be influential in developing trust, but only if the consumer is previously familiar with the seal (Portz, 2000; Wakefield, 2001, Odom et al., 2002).  The influence of the seals may be a function of attention; consumer purchase intentions are higher in the presence of the WebTrust™  seal, but only when the subjects pay attention to the seal (Kovar et al. (2000a, 2000b).  Unfortunately for e-commerce retailers, consumers often overlook the assurance seals, which can interfere with building trust in the website (Kimmery and McCord, 2006). 

As is demonstrated in these studies, familiarity appears to be key in determining the effectiveness of a seal.  Unfortunately for accountants providing website assurance services, evidence exists that suggests that any effectiveness observed may be overridden by other features of the website.  Internal investigations by a company displaying the WebTrust™ seal suggests that consumer trust in the vendor’s brand name may outweigh any effects of displaying the seal (Gendron and Barrett, 2006).  Smaller online businesses may not have the brand familiarity of the firm in Gendron and Barrett’s study, but other factors have also been found to outweigh the impact of the seal.  For example, Mauldin and Arunachalam (2002) observed that the consumer’s purchase intentions are not significantly influenced by web assurance icons when the consumer is already familiar with the product or when the consumer has reviewed vendor disclosures regarding business practices such as shipping and returns policies and procedures.  Vendor statements and guarantees are also more influential in trust development than web seals (Pennington et al., 2003-4). 

Website Content

         The content of an online store may even be more important than the visual appeal of the store in reducing consumers’ perceived information risk (Wang et al., 2005; Mauldin et al., 2002; Pennington et al., 2003-4).  Clearly delineating company policies related to privacy, security, and product returns can reduce uncertainties about a potential purchase (McKnight and Chervany, 2001-2; Warrington et al., 2000).  Pennington et al. (2003-4) found self-reported guarantees to be more influential in trust development than either third party ratings or (as mentioned previously) assurance seals. 

   Including product-related information on the website may also aid in the development of consumer trust by reducing the assessed information risk related to a substandard or incorrect product (Araujo and Araujo, 2003; Wang et. al., 2005).  Houston and Taylor (1999) observed that the perceived quality of products being offered is more influential in consumers’ willingness to purchase goods than the WebTrust™ seal assurances.  Stephens (2004) also found a relationship between the nature of the product information provided and website trust. 

   Information about the seller, such as an “about us” page or prominently displayed phone numbers and email contact information, may help bridge the physical distance between the buyer and seller and reduce uncertainties about the legitimacy of the seller. Kovar et al. (2000a) found that many consumers wish for personal contact, either with a company representative or with the product being purchased, and that this personal contact is an important antecedent in deciding whether to purchase online.  External validation in the form of testimonials, links to external websites, and awards received may also work to reassure consumers of a seller’s legitimacy and reduce uncertainty (Araujo and Araujo, 2003; Lim, Sia, Lee, and Benbasat, 2006). 

   To maximize revenues, businesses are interested in presenting an apparently trustworthy website that will make a consumer feel more comfortable about purchasing.  Prior research on consumer attitudes and behaviors suggests that both design elements and website content can work to reduce consumer fears and uncertainties.  Website layout and graphics, icons and/or seals are design elements that have been found to be important in consumer-based studies.  Website content, including policies and procedures, product and seller information, and external validation techniques may also play a role in trust development.  The following summarizes the various elements found to be important in prior consumer-oriented research, and suggests a role for such diverse elements as product information and icons in developing consumer trust in a SE website. 

Trust Elements Based on Prior Research

Design =   Layout and Graphics, Icons/Seals

Content = Policies and Procedures

                  Product Information

                  Seller Information

                  External Validation

Methodology and Results

Survey instruments were mailed to 220 SEs operating in the collectibles industry.  The collectibles industry was chosen because of the predominance of small, relatively unknown businesses whose owners are likely to be both in touch with customers’ concerns and have a strongly influential role in company website development.  Firms were identified through listings under the Antiques & Collectibles category in the Open Directory Project, a nonprofit directory which describes itself as the “largest, most comprehensive human-edited directory of the Web” (DMOZ, 2006).  Operated by volunteers, the stated purpose of the Open Directory Project is to list and classify websites.  Additional firms were located through nonprofit collectors groups such as http://www.Radko.org.  Websites were screened prior to inclusion in the study for e-commerce capabilities and contact information; websites that were informational only or that did not have a means of ordering online were excluded from the study. 

         The survey instrument consisted of four parts.  Part I elicited background demographic information about the respondent as well as the business.  Part II inquired about the features included in the design of the business’ online store.  Respondents answered “yes” if a particular feature was included in the store and “no” if it was not.  Part III employed a 7 point Likert scale to elicit respondents’ opinions about online customers of the business and the importance of various design and content features in making customers feel more secure while shopping.  The final section consisted of an open ended question in which respondents were asked for other features that might make customers feel more secure, as well as an opportunity to receive a summary of the study when complete. 

         Of the 220 survey instruments mailed, seventeen were returned with bad addresses that could not be resolved.  A total of 43 surveys were returned for a response rate of 21.1%. 

Results

         Tables 1 and 2 show the demographic information for the respondents and for the businesses they represent.  Notably, a total of 90.0% of the respondents reported a  title of either “Owner” or “President”, suggesting a decision making role in the business.  As expected, the businesses were small enterprises, with 78.6% of respondents reporting annual sales of $500,000 or less.  Over 40% of the respondents reported that 76% or more of the business annual sales were the result of online operations.

Business Demographic Information

*One respondent did not answer

Respondent Demographic Information

*Three respondents did not answer

         The respondent SEs typically incorporate a number of different techniques in the design of the online store.  The respondents report including an average of 12.047 (s.d.= 2.7251) techniques out of the 18 methods included in the survey instrument.   Table 3 presents the proportion of stores reporting use of each technique.  The most popular technique is a ready means of contacting the store personnel; all respondents include an email address (or a link to an

email form) on the website, and nearly all also report displaying a customer contact telephone number.  Least popular techniques employed include customer testimonials, vendor information, and customer service staff photos. 

Techniques Included In Online Store

The opinion section of the survey asked three questions about the store’s online customers and a series of eighteen questions about the importance of different store features in making customers feel more secure when shopping online.  A score of 7 indicates that the respondent strongly agreed with the statement, 4 is neutral or no opinion, and a score of 1 is strong disagreement with the statement.  Mean responses to each statement are presented in Table 4.  P-values reported in the table test whether the mean responses differ significantly from 4 (neutral).

Mean Responses to Opinion Questions