Factors in building trust with e commerce customers in the United Kingdom

Document Type:Proposal

Subject Area:Computer Science

Document 1

 Date: ………………………………… BEN AGYEKUM 57433641 School of Engineering, Department of Business Information Technology, Coventry University. This research thesis has been submitted with my approval as University Supervisor. Signature: …………………………………………….  Date: ……………………………. DR. Statement of the Problem 2 1. Research Objective 3 1. Scope of the Study 3 1. Limitations 3 1. Justification of the Study 3 1. Review of Relevant Previous Research 10 2. Rationale of the Study Based On the Literature Readings 13 CHAPTER THREE: RESEARCH METHODOLOGY 16 3. Introduction 16 3. Research Approach 16 3. Research Method 16 3. Age 21 4. Time Spent Daily On The Internet 22 4. Frequency of Online Shopping 23 4. Preference Of Online Shopping 23 4. Internet Proficiency 24 4. Internet proficiency level of the respondents…………………………… 24 LIST OF TABLES Table 4. Average age bracket of the respondents in the three survey………………. Table 4. Mode of the time frame the respondents spend on the internet………………22 Table 4. Frequency of the online shopping on monthly basis………………………… 23 Table 4.

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Marks and Spencer are one of the companies that are faced with this challenge in its attempt to grow its online consumer base amongst the local customers. The company has successfully managed to increase customer trust and loyalty by offering goods and services that are of superior quality. The same however cannot be said when it comes to an online platform primarily because it lacks the company’s services are offered via a website interface which lacks a human service provider as the case is in the non-internet platform. Trust is one of the most important elements of any relationship, and trust constructs relate to the currently existing internet relationship constructs within Marks and Spencer. The effect of the company’s interventions on the customer's purchase behaviors is highly dictated by what their trust intention and belief are in the company’s operations.

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Additionally, the five dimensions were used to rank the factors as prioritized by consumers regarding the weight they carry in increasing loyalty and trust levels. This study also sort to discover whether online customers’ loyalty to an online brand is increased with a perception of top-notch quality goods and services and with increased trust. By assessing the effects of the company’s interventions on the customers’ purchase behavior and if it was dictated by what their trust intentions and beliefs are in the company’s operations. Previous studies in the field of e-commerce seem to ignore the context of the study and focus more on the resulting effects of online customers’ loyalty and trust rather than the factors of both least and important in building this customer loyalty and trust.

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Hence, this study sort to explore this line within the field of e-commerce. This project aimed at helping solve this problem by identifying the factors of least and important in building trust with online e-commerce customers in the United Kingdom. By exploring the five dimensions of online service quality based on Marks and Spencer’s current online business practices. The explored factors were: empathy, assurance, reliability, responsiveness and tangibles. Aside from guiding business practices to realize a wider online consumer base, this study also aimed at meeting the needs of the online consumers, as a research based on online consumers’ feedback go a long way in ensuring Marks and Spencer meet the consumers’ needs and wants. Research Objective The main objective of this study was to determine factors of both least and important in building trust with commerce customers in the United Kingdom.

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Sample size of 50 participants was relatively small compared to the large number of online e-commerce customers hence the genera;ization to the entire group may have been biased. Some participants were unwilling to participate while others did not provide accurate information and even failed to answer some questions. Justification of the Study This study was justified since it had never been conducted before. There is no similar study done on impacts of both least and important in building trust with e-commerce customers in the United Kingdom. This study was also justified with time since was among the most recent projects in the field of e-commerce in this modern era where there have been a significant growth of tecnology and internet e-commerce.

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Chapter five gives the summary, conclusions and recommendations. CHAPTER TWO: LITERATURE REVIEW 2. Introduction This section details the literature review that will provide for the framework of this study. To begin with, the review provides a brief overview of the current position of Marks and Spencer company in the online e-commerce market in UK and definition of key concepts associated with it. Secondly, it will also provide an overview of the study within the field of e-commerce. In the midst of these crises’ caused by the changing retail landscape, Marks and Spencer company has in turn retaliated by introducing new unique sub-brands in their clothesline, launched its own credit card and introduced new products in food division. Moreover, it has directed more resources and energy to the online platform with an aim of turning things around for good.

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Definition of Key Concepts E-commerce: refers to the act of purchasing and transferring services and products by consumers and businesses via an electronic platform, by not having to use any written documents. It is generally regarded as the purchasing and transferring of services and products via the internet. Business-to-Consumer (B2C): refers to transactions or business done plainly between consumers and a company, in this case the consumers being users of the services and products. This study focuses on different aspects of trust as a component of e-commerce in order to determine factors of least and important in building trust with e-commerce customers. Furthermore, analyze online ideals of trust building and how they affect consumer’s decision making before making a purchase or transaction in an e-commerce environment.

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Technological advancements and increased internet usage in the day-to-day business operations and transactions have led to the development of new business transaction methods worldwide. The emergence of e-commerce has helped business to provide services and products using the internet on a 24/7 basis cutting down expenses associated with employee salaries and rental fees for hiring outlets. Inspite, the many benefits that come with e-commerce there are a few shortcomings such as consumer exposure to online identity fraud and theft, online shopping lack the aspect of human assessment and interaction before making purchases. Review of Relevant Theories This study critically reviewed the theory of creative destruction, theory of new niche formation and contingency theory as some of the relevant theories that provided the theoretical and conceptual framework for the project.

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Theory of new niche formation According to Delacroix & Solt (1988), the changes in the business environment, competition landscape and technological advancements create new gaps in the market which have not been occupied by existing companies. However, these changes may integrate appropriately with the companies’ frameworks and business concepts in order to fill these market niches effectively. Clark & Abernethy (1985) argue that there are two primary business environment changes that cause the emergence of market gaps: change in technology and sociocultural changes in consumers. The formation of new market gaps is associated with building around new technological advancements. Theory of creative destruction Creative destruction is the process by which entrepreneurs enter already existing markets through innovations and inventions, which result to appeal to the consumers and consequently destroying structures and business models of existing companies creatively.

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Schumpeter, 1975). Put differently, the emergency of new market segments and demands through entrepreneurial innovations and inventions to replace already established markets. Over time, these existing companies decline and close down but sometime may adapt by adjusting their products and services to stay in the game. Rise of new markets and demands through creative destruction are seen as threats as opposed to new opportunities to the existing companies in the market. Contingency theory has been crucial in numerous studies in the field of e-commerce and information technology. For instance information technology implementation by Paul (2005). In an e-commerce context, different business environments factors and changes over time determine the rise of B2C e-commerce. Nicolneva (2005) also observed that retailers based online who deal in products such as clothing and foodstuffs, interest most consumers’ traffic compared to different online retailers.

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The effect is attributed to specific features of products or services in different retail sectors and also influenced by consumer loyalty, trust and preferences. Therefore the success of a well-known business is all rounded, regarding e-commerce, Mukherjee and Nath (2017) state that for B2B a company’s brand name attributes to its success as well as the ability to retain a high degree of loyalty. McKnight and Chervany (2015) quote the case of Amazon. com that is a leading online book-selling site whose success has been attributed to a renowned brand name. Slade et al. state that as of 2017, 60% of purchases made on Amazon. Related studies on the same reveal that non-internet platform earns customer loyalty based on perceived quality of goods and services and trust in the brand (Slade, 2018).

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Recent studies by Hallikainen and Laukkanen (2018). Reveal that the same is also applicable for the online vendors but according to Christine-Roy et al. a lot of research still needs to be done on the same to offer concrete advice to the online businesses. Carter et al. states that very few studies have address the factors that attracts and retain loyal e-Commerce and specifically none of them address the case of Marks and Spencer, this study sets forth to fill in this research gap. McKnight and Chervany (2015) introduce the following five dimensions which are going to be used for this study: tangible, reliability, responsiveness, assurance and empathy. Tangibles: this relates to the consumer's assessment of the company’s appearance, equipment and facilities used to offer online services (McKnight et al.

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Reliability: this is the consumer’s perception of whether an organization is offering promised services via a dependable, reliable and timely manner. Responsiveness: this is the customer’s perception of a company’s willingness to offer them the needed help and assistance (Hallikainen et al. Customers’ trust in online business is critical primarily because there is little to no guarantee that in an internet environment the business will refrain from: 1. Presenting inaccurate information 2. Unethical, undesirable and opportunistic deeds such as unfair pricing 3. Make purchases with no prior permission 4. Finally, distribute the consumer’s data. Any of the attributes of the aspects used by the organization will then be used to make the list of factors that will be used in the first online survey and later on based on the consumers ranking be manipulated in the second and third online surveys.

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This study relates to all the above studies as it attempts to come up with an insight that will guide Marks and Spenser on the factors to invest in to realize a most important and least important consumer based e-commerce customers across the UK. Rationale of the Study Based On the Literature Readings Online consumer trust can be termed as the self-will of consumers to become helpless to undertakings of outlet which is based online with believe that the outlet will deliver on a certain crucial action, regardless of the capability to influence the online outlet (Mayer et al, 1995). The meaning stipulates the total prospect of how trust is applied in different business environments, operations and transactions. Both Roy et al (2001) and Hoffman et al (1999) concur that, building trust for an online based business enterprise is more cumbersome than building trust for an offline based business entreprise.

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Rovald (1996) argues that trust being a changing process it is prone to increase or decrease eventually with experience. Head et al (2001) came up with four lifecycle phases of building consumers’ online trust, the phases are; chaos, establishing trust, enhancing trust and maintaining trust. The phases follow each other sequentially and interactively. The proposed model of trust building integrates the essential operations, vendors, customers and referees phase to phase. During the initial stages of shopping online consumers are faced by chaos feelings about the e-commerce transaction environment, since they fear their personal details may be wrongfully used. CHAPTER THREE: RESEARCH METHODOLOGY 3. Introduction This chapter focuses on the research methodology to be employed and a justification to why this method was choosen over other methods.

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This chapter will also offer an indepth discussion of the research approach, sampling, data generation and analysis techniques to be employed, trustworthiness of the study, ethical considerations and lastly give a summary of the chapter. Research Approach This study used a quantitative research approach. This study adopts a quantitative approach since it is based on determining factors of both least and important in building trust with e-commerce customers, which falls on the field of social sciences. During this period, the consumer’s traffic was monitored to take note of an increase or decrease in their number. Additionally, another survey was done with a new set of random fifty customers to get their opinion on their trust level of the company’s business practices with the new factors incorporated.

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The same was done with the factors ranked the least but for two days to avoid negatively affecting the company’s brand, business operations and profits. A comparison of the data findings of the three online surveys was then made based on customers’ traffic and trust levels on the company’s business operation in the three different scenarios and a summary made on the same. Data Generation Techniques This study used questionnaires and document analysis as techniques of data generation. Using two different data generation techniques; this study used questionnaires and document analysis as techniques of data generation. Accuracy; this study ensure accuracy by employing random but systematic sampling so as ensure fair representation and generalization of findings to the general population.

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Ethical Considerations This study considered the following ethical issues: Plagiarism; this study sort to avoid plagiarism by referencing someone else’s work for example by using exact quote in inverted commas or brackets with the reference page, number or year. Informed consent; this study ensured informed consent from participants before they took part. Free will of participants; this study ensured that there was no pressure on individuals to participate. Summary In conclusion, this chapter provided an explanation and description of the methodological approach that this study adopted. Starting with, the research approach, research method, sampling method and techniques used, data generation and analysis techniques, trustworthiness of the study and lastly ethical consideration that this study upheld. CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS 4.

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Introduction This chapter details the findings and analysis of data obtained from this study that sought to determine factors of both least and important in building trust with e-commerce customers. The data analyzed was obtained through online survey with respondents drawn from across UK, randomly selected. The good response rate was due to the efforts such as reminders, curtesy calls and pop ups. As shown in figure 4. below Questionnaires not returned 21% Questionnaires properly filled and returned 79% Figure 4.  Average Response Rate for the three online surveys 4. Demographic Characteristics of the Respondents 4. In the first survey, the following were the number of respondents per each respective age bracket. one, (16-20) two, (21-25) eight, (26-30) fourteen, (31-40) fourteen, (41+) two. In the second survey, (10-15) one, (16-20) three, (21-25) nine, (26-30) sixteen, (31-40) eight, (41+) one.

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In the final survey, (10-15) zero, (16-20) two, (21-25) nine, (26-30) seventeen, (31-40) eleven, (41+) one. The overall age bracket of the respondents who filled and returned their questionnaires is as follows. Time Frame Frequency 1st Survey Frequency 2nd Survey Frequency 3rd Survey Less then 1hr 6 2 3 1-2 hrs 16 10 7 3-4 hrs 9 19 21 5-6 hrs 6 5 8 6 + hrs 4 2 4 Total 41 38 40 Table 4.  mode of the time frame the respondents spend on the internet daily 4. Frequency of Online Shopping The respondents were asked to indicate the number of times they purchase goods or services online on monthly basis. In all the three surveys, a majority of the respondents indicated that they did online shopping between 2-5 times monthly. The table 4. Internet Proficiency The respondents were asked to indicate their level of internet proficiency; whether novice, intermediate or advanced.

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In all of the three online surveys a majority of respondents who dully filled and returned their questionnaires indicated they were intermediate level and that they were comfortable using the internet. Only a few of the respondent that were learning to use the internet, while not so many on the advanced proficiency level. In the first survey, Novice were 4/41, intermediate 28/41 and advanced 9/41. In the second survey, Novice were 3/38, intermediate 26/38 and advanced 9/38. below shows clearly the mode. Amount (£) Frequency 1st Survey Frequency 2nd Survey Frequency 3rd Survey Less than 20 2 3 2 21-60 4 3 2 61-100 10 9 19 101-140 16 18 10 141-180 4 3 4 181-220 3 1 2 221 + 2 1 1 Table 4.  Approximate Amount Willing to Spend on a Single Purchase 4. Approximate Amount of Money Spent Annually On Online Purchase The respondents were asked to approximate the amount of money they would spend annually on online shopping.

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In all the three online surveys a majority of respondents approximated to spend around 1500-2000 £ annually on online shopping. The factors that ranked the least were; more expensive than those sold in physical stores, not skillful with the internet and waiting to receive the product. After the first survey, the factors which rank the highest were then incorporated in Mark and Spenser’s business practices within five days. During this period, the consumer’s traffic will be monitored to take note of an increase or decrease in their number. Additionally, another survey was done with a new set of random fifty customers to get their opinion on their trust level of the company’s business practices with the new factors incorporated.

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The same will be done with the factors ranked the least but for two days to avoid negatively affecting the company’s brand, business operations and profits. Majority of consumers who do online shopping are online for about 3-4 hours a day, shopping at least 2-5 times a month. The finding concur with the literature review on the factors that help build and enhance trust with e-commerce customers for instance convenience, saves time, availability of wide range of choices and flexible and attractive prices compared to traditional shopping. The findings reveal that majority of online customers are at an intermediate internet proficiency level yet they agree that online shopping is complex than traditional physical instore shopping. CHAPTER FIVE: SUMMARY, CONCLUSION & RECOMMENDATIONS 5.

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Introduction This chapter presents a summary, conclusions, and recommendations of the study. The finding concur with the literature review on the factors that help build and enhance trust with e-commerce customers for instance convenience, saves time, availability of wide range of choices and flexible and attractive prices compared to traditional shopping. Roy et al (2001) and Hoffman et al (1999). From the findings it is evident that incorporating factors that ranked the highest into Marks and Spencer in relation to building and enhance consumer trust increase the customer traffic significantly upto 63% more, on the other hand when factors that ranked the least were incorporated there was 35% decrease in the consumer traffic. This concur with McKnight et al (1998) who holds the same observations about e-commerce trust.

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Conclusion of the Study This study set out to determine the factors of both least and important in building trust with e-commerce customers as well as identify key areas that Marks and Spencer company need to address and invest on in order to attract and retain a wider loyal e-commerce customer base. Trust is one of the most important elements of any relationship, and trust constructs relate to the currently existing internet relationship constructs within Marks and Spencer. This study can therefore recommend the following insights that will guide Marks and Spenser on the factors to invest in to realize a most important and least important consumer based e-commerce customers across the UK. Marks and Spencer Company should provide security for their consumers against identity theft, offer attractive and flexible prices, review and improve their products return policy, provide a wide range of products and services for consumers to choose from and also simplify their online shopping process.

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Recommendations for Further Studies For further research, a study should be done on the determinants of e-commerce consumer trust and the resulting implications on e-commerce. Trust being an important factor in online shopping a further study should be done on the ways of building and enhancing trust and how the online vendor can incorporate these ways into e-commerce. Citizen Adoption of e- government Services: Exploring citizen perceptions of online services in the United States and United Kingdom. Information Systems Management, 33(2), pp. Christine Roy, M. Dewit, O. and Aubert, B. Mis Quarterly, 48(2). Hallikainen, H. and Laukkanen, T. National culture and consumer trust in e- commerce. International Journal of Information Management, 38(1), pp. H. and Chervany, N. L. What trust means in e-commerce customer relationships: An interdisciplinary conceptual typology.

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International journal of electronic commerce, 6(2), pp. Bunduchi, R. “Business relationships in internet-based electronic markets: the role of goodwill trust and transaction costs”, Information Systems Journal, 15: (4), 321-341. Constantinides, E. “Influencing the online consumer’s behavior: the Web experience”, Internet Research, 14: (2), 111-126. Ferraro, A. Davis, J. H. Schoorman, F. D. “An integrative model of organizational trust. Archer, N. “Building Trust in E-Commerce: A Theoretical Framework”. Proceedings of the Second World Congress on the Management of Electronic Commerce. Hansen, J. V. “Trust and TAM in online shopping: An integrated model’, MIS Quarterly, 27, 51-90. Delacroix, J. Solt, M. E. Niche formation and foundings in the California wine industry 1941-84. Hsoughton, J. D. Yoho, S. K. Toward a contingency model of leadership and psychological empowerment: When should self-leadership be encouraged? Journal of Leadership & Organizational Studies, 11(4), 65-83.

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July 12). E-commerce (a special report) — Debate—talking to the players: Will the Internet take over commerce? We asked three people who ask themselves that question all the time. The Wall Street Journal, p. R29. Nikolaeva, R. Select an approximate maximum amount you would spend on a single online purchase: Less than £20 21-60 61-100 101-140 141-180 181-220 221 & above 9. Select an approximate maximum amount you would spend per year online purchase: Less than £100 101-500 501-1000 1001-1500 1501-2000 2001-2500 2501 & above 10. How important are each of the following factors in refraining /keeping you from shopping on the internet. Please tick the appropriate box. Very Unimportant Unimportant Neither important nor unimportant Important Very important Waiting to receive the product Risk of credit card transactions Risk of identity theft Difficulty in returning products/items Risk of not getting what I paid for Risk of loss of privacy Not skillful with internet Lack of trustworthiness of vendors Complex compare to traditional shopping Not being able to touch products More expensive than those sold in retail stores I have undergone bad experience Thank you for taking the time to complete this survey.

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