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Custom E-Retailing: Critical Thinking Essay

Many studies on online commerce have been done where issues of trust have reigned supreme. The study under evaluation on e-retailing by Walczuch and Lundgren (2004) emphasizes the importance of trust in e-commerce. Specifically, consumers can only purchase gods online on the basis of trust placed upon the e-retailing platform. The topic of the research analyses the psychological antecedents of institution-based consumer trust in e-retailing by Walczuch and Lundgren (2004) by giving an analysis on the importance of trust in online transactions. Additionally, the authors group the psychological factors that enable individuals to trust online transactions into five groups. They include: individual personal characteristics, perception about e-retailing, consumer attitude’s towards internet shopping and the customer prior experience on online transactions.

The authors emphasize the importance of trust in buying goods and services online as evident from the research. The topic is important as it gives online businesses an idea on issues of trust that affect consumer online buying behavior. The study was motivated by gaps in previous literature on the topic. Specifically, lack of previous research on institutions that influence consumer’s trust on e-retailing as well as extensive research on psychological antecedents of institution-based consumer trust in e-retailing. Secondly, researches have focused more on what happens in the consumer’s mind prior, during and when a consumer decides on whether to trust a particular retailer. Thirdly, few researches have focused on how trust is formed by the consumer when making online transactions.

The study’s hypotheses include: personal characteristics such as extraversion, neuroticism, agreeableness, conscientiousness, honesty to experience, and propensity to trust in e-retailing influences consumer trust in e-retailing. Positive examination of consumer perception that influences their trust on e-retailing such as their perceived investment, perceived similarity, perceived familiarity, perceived control and the perceived normality of the online buying process, influences the consumer trust in e-retailing positively. Knowledge based factors such as the awareness of what happens in e-retailing and security of the e-retailing websites (security technology) have a positive influence in e-retailing. Positive attitude to the use of the computers, the internet and towards shopping have an influence on the e-retailing trust (Walczuch and Lundgren 2004).

The two regression models have some differences. The difference between the two regression models is that the first regression model shows more statistical analysis and incorporates monitory factors in its analysis of the data. however, the second model involves additional factors which the authors found to be relevant to the topic under study such as perceived familiarity, knowledge on information practices as well as the consumers experience with e-retailing over time.

The studies main findings include: the image that consumers have as far as the retailer is concerned is an important factor in determining the trust in doing online transactions. Issues like the size of the e-retailer, e-retailer’s reputation, information which the consumers get from other sources on e-retailing, perceived control and similarity of the online transactions with the normal offline transactions can affect the level of trust that the consumers attach on e-retailing. Provision of information on e-retailing can increase the number of customers who buy goods and services online as they do not have to be experienced internet users for them to buy goods online. Lastly, Consumers should be informed on reduction of costs that comes with buying goods online. E-retailing websites should explain the process that the consumer needs to follow in order to buy the goods and the services as well as provide guarantees on delivery and other procedures so as to promote consumer trust on online retailing.

The implications of the study on e-retailers can be evaluated as follows: consumer’s trust is very important in e-retailing. Retailers should therefore devote considerable time and effort in providing consumers with relevant information in online transactions. The retailers should provide guarantees and other online after-sale services to positively influence consumers’ perception on e-retailing. E-retailing should not target only internet users but also the non-internet users by providing necessary steps on how to go about online transactions (Kimery, 2002).

Basic assumptions held by the creator of knowledge in terms of the nature of the world (ontological independence/ socially created) can be explained as follows: basically, ontology refers to whether the reality is a result of what is in the mind of someone (Holden, 2004). It is the relationship between what the society beliefs and how this belief affects the social factors (Socialogy, 2012). Reality is therefore objective until proven otherwise through research. Prior to this research trust was not seen as influencing the institution based consumer trust in e-retailing. There was an objective view that it is caused by privacy and security issues. Findings of the authors of this article are based on research conducted, that is, the findings are purely based on the data analysis and not on the views of the authors, and thereby counteracting the societies view on factors that affect e-retailing.

First, the authors begin by introducing why the topic is a matter of research citing other researches that have been done previously and that touch on the issue of trust and psychology. The authors have pointed out issues such as security privacy and the confidentiality of transactions as some of the issues that have contributed to the infinite growth experienced in the online market. The authors have cited that all these issues can be summed up as consumers’ lack of trust. According to the authors, trust is a central theme in any transaction involving the buyer and the seller including online transactions. Secondly, the authors have reviewed different literatures to support the gaps that exist as far as trust in e-retailing is concerned. Lastly, the authors rely more on statistical data to analyze their findings and therefore do not rely on their own knowledge. This shows the ontological independence of the authors throughout the article.

In terms of the nature of human beings (agency/ structure), the authors have assumed a positivism ontological approach by assuming that different people have certain behaviors’ that prove the relationship of the variables under study. The various perceptions of the consumers, their experience as well as their knowledge as far as e-retailing are concerned can all contribute and influence online buying patterns.

On what constitutes valid knowledge (objective / subjective) the authors have used a representative sample of the US students who are mostly involved in the e-retailing transactions to collect data. The authors in this article have relied on quantitative data which include 73% of all  the students who are experienced and 27% of students who were inexperienced as far as e-retailing was concerned. They have made a generalization based on the data collected. The authors are more subjective and do not include their personal views in this article.

The model is falsified as it leads to further statistics on the variables, which can have a negative or positive effect on the variables which have been tested by the authors in question. The authors have collected data on the trust issues when it comes to online buying by university students, but has concluded by saying that the consumers behave rationally. This implies that the results may not be a true indication of the situation on the ground as consumers may first reason out prior to making buying behavior choices.

Inductive reasoning refers to the generalization of the sample to the entire population (Experiment Resource.com, 2012). Inductive reasoning is applied in the study in the sense that the data is collected from a small sample and generalization made. The research populations of the authors are the students in the US; a sample of only 149 students is used and the questionnaires administered to them. 149 out of all the students in the US is a very small sample size. The sample though small, the authors have assumed it and used it to give a general view of factors that affect consumer based trust of e-retailing.

The methodology which has been used in this article is the quantitative method. This is because the questionnaires have been analyzed and the statistics made on the various variables used to determine the level of trust in consumer based e-retailing. Out of the 149 students who were interviewed using the questionnaires, generalization is made that the same results apply to all other students in the US as far as institution  based consumer trust e-retailing is concerned. Therefore, it is clear that throughout this study, the authors are based on generalization of the findings.

Conclusion

The evaluation of this study shows that e-retailers must win consumer’s trust as it is very important in e-retailing. Substantial amounts of time and effort should be taken in providing consumers with relevant information in online transactions. In this case, the e-retailers should provide guarantees, online after-sale services as well as other benefits in order to positively influence consumers’ perception on e-retailing and positively influence their purchase decisions. E-retailers should also note that non-internet users are also as important as internet users as they are potential consumers.

Code: Sample20

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