Trustmarks: Strategies for exploiting their full potential in e-commerce
The proliferation of e-commerce signifies the increasingly crucial role of consumer trust in enhancing their willingness to purchase. Trustworthiness is important to consumers who shop online, especially when dealing with unfamiliar sellers. Without enough brand exposure and knowledge about the retailer, it is difficult for them to form initial trust and feel comfortable to make a purchase. The perceived risks associated with online retailing also creates a significant hurdle for e-commerce activities. This is because online retailers lack physical presence, proximity to consumers, as well as direct interactions with them. Other instances of consumers’ personal data and payment information being used for unconsented purposes also contribute to their risk perception and lack of trust. Therefore, it is vital that online retailers provide credible signs and information that promote consumer trust and confidence.
Numerous intermediaries of trust assurance have been created and implemented by online retailers to generate trust and reduce perceived risk. The most significant are trustmarks, which are electronic labels – consisting of logos, pictures, and symbols – that indicate the e-merchant conforms to specific standards, such as transaction security, privacy laws, or integrity of business practices.
However, such trust indicators have not been effectively used and hence are still barely noticed by consumers. Previous research on trustmarks also lacks an understanding of their influence on trust, perceived risks, and willingness to purchase. Drawing data from two online surveys that are 3 years apart, this cross-sectional study addresses the gap by investigating how trustmarks play a role in forming online consumers’ trust, risk perceptions, and increasing their willingness to purchase, and whether customer recognition and knowledge levels of trustmarks have changed over time. As a result, it provides important insights that add to the body of marketing literature on trustmarks and inform managerial decision making on how to use this tool more effectively.
Method and sample
Two online surveys, which were conducted 3 years apart using mTurk, collected a total of sample of 447 responses (N=175 in Study 1, N=272 in Study 2) from German residents. Drawing on existing scales to measure each construct, including consumers’ trust, risk perceptions, willingness to purchase, perceived reputation, assurance, and knowledge of trustmarks, the study exposed participants to the top 25 trustmarks used in Germany and asked them which of these they recognised.
Key findings
- High levels of trustmark knowledge have a significant influence on consumers’ perceived trust toward online retailers.
- Consumers’ recognition and knowledge of trustmarks both strengthen the effect of trustmark use on perceived trust.
- Recognition of trustmarks has significantly increased over the past 3 years. However, knowledge of them remains limited.
- Trustmark use has multiple effects. Firstly, they drive consumers’ online trust perceptions and directly influences online risk perceptions. Secondly, they have an indirect effect on reducing risk perceptions through increasing trust. Finally, they can positively influence consumers’ willingness to purchase online by increasing trust and perceived risk.
Recommendations
Small and new online retailers often struggle with establishing positive reputation and developing consumers’ initial trust. This is due to the lack of physical contact, direct buyer-seller interactions, and tangible cues signalling quality and trustworthiness of the retailers.
This study addresses these challenges by reinforcing the importance of trustmarks in helping smaller, lesser-known e-retailers establish a stronger, more successful, and profitable market presence. In particular, the study suggests the multiple roles of trustmarks, such as their direct negative effect on perceived risk and their indirect effect on perceived risk through enhancing trust. Higher trust and lower perceived risk can result in an increase in consumers’ purchase intentions.
Therefore, to gain a competitive edge, the first thing small and new e-retailers should consider is to adopt trustmarks in their online stores. Not only should retailers in mature e-commerce markets with fierce competition and many product alternatives use trustmarks, but also those in emerging markets where e-retailers have an opportunity to become early adopters of this trust assurance tool before other competitors.
It is recommended that they display trustmarks on their home webpage or landing page to establish assurance from the start of the online shopping experience. Moreover, the study found not all types of trustmarks are equally recognised by consumers, and better-known trustmarks work better to enhance trust and purchase intentions. E-retailers should therefore select trustmarks issued by a third party that consumers widely recognise.
Finally, since consumer knowledge of trustmarks determine how effective they are in building trust and risk perceptions, e-retailers should provide more detailed information to educate potential consumers. This involves explaining the meaning and function of trustmarks and may be done through intensive promotional efforts such as online and offline advertising, for example, through short pre-roll advertisements used before displaying a feature ad or integrated into the feature ad itself. Education about the uses and benefits of trustmarks should also be done by third-party trustmark issuers, through promotional activities and advertising to raise consumers’ awareness and knowledge of the tool.
Researcher
More information
The research article is also available on eprints.