The role of hedonic and utilitarian products for e-consumer trust.

ABSTRACT

Consumer trust in e-tailers has recently received growing attention within Internet shopping research. Trust has been studied to determine how it is established and maintained. The present study aimed to determine the impact of purchasing hedonic versus utilitarian online products in terms of e-tailer trust and subsequent willingness to depend on an e-tailer. Results showed that certain antecedents to e-trust might be more important in hedonic product contexts versus utilitarian product contexts and vice-versa. In both cases, trust in an e-tailer significantly contributed to a willingness to depend on an e-tailer. Implications include trust-building strategies for e-tailers in terms of hedonic and utilitarian products.

Keywords: E-trust, hedonic, utilitarian.

1. INTRODUCTION

Consumer trust in general has been explored extensively within traditional shopping environments. Its role among online retailing has been investigated relatively less, although there is evidence to support the magnitude of trust between buyers and sellers online. Many of these elements include the perception of credibility, ease of use, technical competence, service quality, transaction security, conflict handling and communication (Corritore, Kracher, & Wiedenbeck, 2003; Janda, Trocchia, & Gwinner, 2002; Lee & Turban, 2001; Morgan & Hunt, 1994; Seines, 1998). This paper focuses on how consumer trust in an etailer changes within a hedonic or utilitarian product context.

Some e-tailers are in the business of hedonic products--providing experiential enjoyment to their customers, while others provide utilitarian products--those that fulfill an inherent function (Okada, 2005). There is evidence to suggest that each type of product leads to different consumer attitudes and behavior (Hu & Lee, 2000). Further research indicates that hedonic products may be more valued than utilitarian products (Dhar & Wertenbroch, 2000). What remains to be seen is how this assertion influences consumers' trust in e-tailers and their subsequent willingness to depend on e-tailers.

2. LITERATURE REVIEW

A definition of trust has not universally been agreed upon (Chen& Dhillon, 2003). Trust as a construct has been defined and measured in multiple ways across several disciplines. Generally, trust is viewed as a psychological antecedent to behavior (Chen & Dhillon, 2003). Arguably the most comprehensive definition of trust has been proposed by Mayer, Davis and Schoorman (1995) where trust is the "willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party". Within the realm of online shopping, this definition is particularly meaningful because of its reference to the inability of consumers to monitor online e-tailers.

2.1 Importance of Trust in the Online Buyer-Seller Relationship

Trust is a key component in building good buyer-seller relationships. This carries over into the online environment, although the nature of the relationship changes. The nature of trust in the online retail environment compared to trust within traditional stores is different for two reasons. First, consumers have lost the personal, face-to-face contact as part of the shopping experience. A higher degree of uncertainty about the e-tailer may lead to a more ambiguous trust concept. Second, there are certain elements of risk inherent in online transactions that are not present in traditional shopping situations. The Internet creates a global network of information exchange that could potentially reveal sensitive information (e.g. credit card numbers). Consumers are apprehensive to provide personal information over the Internet because they are uncertain about what happens to it once it has been provided.

Four constructs leading to the formation of trusting beliefs are the perceived reputation of the e-tailer, perceived site quality, perceived risk and perceived behavioral control (Janda, Trocchia, and Gwinner, 2002; McKnight, Choudhury, & Kacmar, 2002a; Seines, 1998; Venkatesh, Morris, Morris, & Davis, 2003). Positive perceived reputation of an e-tailer has been shown to increase the perception of their credibility (Ganesan, 1994). Reputation reduces uncertainty, and therefore increases trust (Chen & Dhillon, 2003). Additionally, consumers are more willing to depend on e-tailers that they believe have a stronger reputation (McKnight et al., 2002b). Reputation in the online environment may be transferred over from an offline store. However, in the case that the e-tailer only exists online, reputation must be dependent on secondhand information and personal experience with the website alone. The perception is that e-tailers who are of good standing are less likely to endanger their reputation by taking advantage of consumers and are therefore thought to be more trustworthy (Jarvenpaa, Tractrinsky, & Vitale, 2000). The visual presentation of a website including layout, graphics and readability can provide various levels of encouragement for purchase intentions (Chen & Dhillon, 2003). Perceived site quality is important because in some cases, it is the only way for consumers to evaluate tangible qualities of an online company. Consumers make assumptions about an e-tailer based on their experience with the website. McKnight and researchers (2002b) found perceived site quality to be a strong predictor of trust in an etailer. Increasing site quality can therefore potentially lead to increased levels of trust in an e-tailer:

Perceived risk in the online retail environment is the possibility of facing an outcome that is adverse. Its effects have been previously studied within online retailing because of its unique nature. Janda, Trocchia, and Gwinner (2002) conducted in-depth qualitative interviews regarding online risk perceptions. The researchers found two main types of online risk concerns, termed financial (e.g. supplying credit card information) and non-financial (supplying personal information). Consumers who shop online are concerned about the consequences of revealing personal and financial information (Hoffman, Novak, & Peralta, 1999). Others have also supported the involvement of risk influencing trust in e-tailers (Corritore, Kracher & Wiedenbeck, 2003). They assert that trust cannot be present without satisfactory levels of risk.

Perceived behavioral control is identified as the awareness of limitations imposed on behavior by internally and externally derived sources (Venkatesh et al., 2003). These sources could be consumers' own beliefs about their ability to use the Internet or their comfort level with navigating a particular website. Perceived behavioral control, as part of the theory of planned behavior, is influential in the formation of beliefs about a particular intention (Ajzen, 1991). In this case, the more control consumers feel they have over the success of their online shopping experience with a particular e-tailer, the more willing they may be to trust the e-tailer. In the same way that knowledge is power, and understanding of the virtual retail environment leads to the perception of a secure transaction.

E-commerce presents a unique marketplace because of its intangible qualities. Transactions can take place without the consumer ever seeing the actual product or having personal contact with the e-tailer. We define the behavioral outcome of trust for e-tailers as the willingness to depend on an e-tailer. This construct implies a general readiness to rely on an e-tailer in the case of completing a transaction (McKnight et al., 2002b). A recent study proposed a causal model showing trust in a website leading to increased online purchase intention (Yoon, 2002). Regression analysis showed that trust in a website had a significant positive impact on intention to purchase online. This research supports the notion that consumer trust can influence consumers' attitudes toward online shopping. Another study (Jarvenpaa et al., 2000) found trust in an Internet store to be an antecedent to perceived risk and attitudes toward the store, which in turn influenced the consumers' willingness to buy. In this case, attitudes and willingness to buy were positively related while risk perception was negatively associated. This brings up an interesting point, as it has been shown that trusting beliefs, regardless of whether they precede or follow risk and attitude beliefs, do impact constructs that relate to purchase intention or willingness to rely on an e-tailer.

An important implication is that certain types of e-tailers may need to be more concerned about particular antecedents of trust versus others. For example, it may be more important for e-tailers selling hedonic goods to be concerned about specific antecedents to trust and the willingness to depend versus utilitarian goods e-tailers. The primary purpose of this study is to understand the formation of trust and the resulting willingness to depend on an e-tailer for consumers purchasing hedonic versus utilitarian goods online.

2.2 Hedonic Versus Utilitarian Consumption

Past research has demonstrated that hedonic and utilitarian products have differing effects on consumer attitudes and behavior (Hu & Lee, 2000). This paper focuses on how consumer trust in an e-tailer changes within a hedonic or utilitarian product context. For the purposes of this study, products will be defined in terms of their hedonic (relatively discretionary) or utilitarian (relative necessities) nature. Hedonic products are more likely to evoke a sense of guilt from consumers due to their elected quality (Okada, 2005). It may be easier for consumers to purchase goods if they can justify why they are purchasing them. Is it possible that hedonic products are correlated with a higher perceived level of trust in the e-tailer? The increased trust should in turn positively impact the willingness to depend on the etailer. The present research aims to explore the relative importance of trusts' linkage with willingness to depend on an e-tailer in terms of hedonic versus utilitarian online products.

There is some evidence to suggest that purchasers of hedonic products value their items more than purchasers of utilitarian items (Dhar & Wertenbroch, 2000). If this is the case, then it naturally follows that trust and subsequent willingness to depend on an e-tailer may be more of an issue for purchasers of hedonic products online. Based on previous literature, it is hypothesized that the four antecedents have a stronger relationship with trust within the hedonic product context versus the utilitarian context. More specifically, trust in an e-tailer will be positively related to perceived reputation, perceived website quality and perceived behavioral control, and these relationships will be stronger for hedonic online products. Trust in an e-tailer will be negatively related to perceived risk, and this relationship will be stronger for hedonic online products. In addition, trust in an e-taller will be positively related to a willingness to depend on an e-tailer. This relationship will be stronger for products hedonic online products versus utilitarian online products.

3. METHODOLOGY

The primary purpose of this research is to investigate consumer trust in the online retail environment in terms of hedonic versus utilitarian goods. An online survey was utilized for data collection. After distribution of an e-mailed invitation to 30,000 potential subjects, 327 respondents filled out and submitted the survey (response rates of 9.08) about Internet usage and Internet shopping behavior. The survey was completed anonymously and on a voluntary basis with an incentive of being entered into a drawing for two $25 gift certificates. The nature of the information being gathered made the online process an ideal method for data collection. The population for this study consisted of all online consumers who reside in the United States, have purchased at least one item online and are 18 years old or older. A randomly selected double opt-in list of addresses purchased from a broker was employed. The broker has partnerships with more than 50 online retail stores with credit card information screening. The IP addresses were also screened to prevent respondents from taking the survey more than once. In this way, the validation error was minimized.

Data collected included perceived e-tailer reputation, perceived website quality, perceived risk, perceived behavioral control, overall trust in an e-tailer which was comprised of three separate dimensions (competence, integrity, benevolence) and willingness to depend on an e-tailer. Structural equation modeling using AMOS was employed to test the proposed paths. Structural equation modeling is one of the most powerful instruments of theory-guided data analysis in marketing and consumer research. Rather than merely specifying the number of components and items to be analyzed, confirmatory factor analysis allows researchers to specify the precise relationship between the factors and items used to measure them as well as linkages among the factors (Ryan, 1982).

4. RESULTS

Two path analyses were run using AMOS to simultaneously explore the relationship among the proposed variables. Models were run for overall trust, competence trust, integrity trust and benevolence trust. Chisquare values for both models were significant, which is an undesirable but common occurrence with structural equation modeling. Additional fit measures were above .90 and sufficient for the utilitarian model, and very close to the cutoff of .90 for the hedonic model. The fit measure results are presented in Table 1 (Hu & Bentler, 1995, chap. 5).

Between the two path models, eight out of the ten proposed paths were found to be in the expected direction and significant. The remaining two were in the proposed direction but not significant. Table two provides summary results.

The hypothesis, which proposed a stronger trust relationship with hedonic product contexts versus utilitarian product contexts, is partially supported (see Table 2). The influence of perceived behavioral control on consumers' trust in an e-tailer (.57, p < .01 vs..02, not significant) and trust's influence on willingness to depend on an e-tailer (.83, p < .01 vs. .70, p < .01) are stronger for hedonic online products. The same trend is not true for the effect of perceived e-tailer reputation (.71, p < .01 vs..97, p < .01) and perceived website quality (.13, p < .05 vs. .29, p < .01) on trust in an e-tailer.

5. DISCUSSION

There are several implications that stem from the current findings. This study concurs with Hu and Lee (2000) that consumers develop trust attitudes in a slightly different manner depending on whether the online products involved are predominantly hedonic or utilitarian products. Evidence to support what was proposed in this study involves the linkage between perceived behavioral control and trust and the linkage between trust and the willingness to depend on an e-tailer. These two paths are supported by Dhar and Wertenbroch's (2000) assertion that hedonic products are of higher value to consumers. Consumers purchasing hedonic products online and who also have higher levels of behavioral control over the e-tailer show higher levels of trust in the e-tailer. The same cannot be said for consumers purchasing utilitarian e-products. The models also demonstrate that there is a slightly stronger relationship between trust in an e-tailer and the willingness to depend on an e-tailer in the hedonic eproduct context than the utilitarian e-product context. An e-tailer's perceived reputation, perceived website quality and perceived risk was found to be more influential for utilitarian e-products. Within both contexts, however, trust has a significant impact on the consumers' willingness to depend on the e-tailer.

E-tailers should remain focused on the type of products they offer to consumers. The data gathered here indicate that hedonic products may elicit e-trust in different way than utilitarian products. Hedonic product e-tailers should concentrate on increasing consumers' perceived behavioral control more so than utilitarian products e-tailers. Overall, perceived e-tailer reputation plays an important role for both types of products, although it is slightly more important for utilitarian products. Future studies should identify specific examples of hedonic and utilitarian products to study more detailed and controlled contexts.

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Lynn M. Goetzinger, Purdue University, West Lafayette, Indiana, USA

Jungkun Park, Purdue University, West Lafayette, Indiana, USA

Lynn M. Goetzinger is a doctoral student at Purdue University pursuing her degree in Consumer Behavior.

Dr. Jungkun Park earned his Ph.D. at the University of Tennessee. Currently he is an assistant professor in Consumer Sciences & Retailing at Purdue University.

III. TABLE 1. GOODNESS-OF-FIT INDICES FOR HEDONIC AND UTILITARIAN
TRUST MODELS

              Hedonic Product Trust    Utilitarian Product Trust

[X.sup.2]   1554.29, df=345, p < .01   2284.66, df=345, p < .01
CFI                    .88                        .92
NFI                    .85                        .90
TLI                    .86                        .90

IV. TABLE 2. STANDARDIZED COEFFICIENTS FOR HEDONIC AND UTILITARIAN
TRUST MODELS

Parameters       Hedonic Product Trust    Utilitarian Product Trust

TRUST--REP              .71 **                     .97 **
TRUST--QUAL             .13 *                      .29 **
TRUST--RISK            -.08                       -.06 *
TRUST--CONT             .57 **                     .02
DEPEND--TRUST           .83 **                     .70 **

Note * p < .05, ** p < .01; Perceived E-tailer Reputation (REP),
Percieved Site Quality (QUAL), Perceived Risk (RISK), Perceived
Behavioral Control (CONT), Willingess to Depend (DEPEND)