Appraisal of the potential of the growth of e‐retailer based on impact of perceived value on trust for online purchases

• DOI: http://doi.org/10.1002/jsc.2232
• Author: Mujahid Mohiuddin Babu,Bidit Lal Dey
• Date: 01 September 2018
• Published date: 01 September 2018

RESEARCH ARTICLE

Appraisal of the potential of the growth of e-retailer based on

impact of perceived value on trust for online purchases

Mujahid Mohiuddin Babu

1

| Bidit Lal Dey

2

1

Coventry Business School, Coventry

University, Coventry, United Kingdom

2

Brunel Business School, Brunel University,

London, United Kingdom

Correspondence

Mujahid Mohiuddin Babu, School of Marketing

and Management, Faculty of Business and

Law, Coventry Business School, Coventry

University, Priory Street, Coventry CV1 5FB,

UK

Email: ac4691@coventry.ac.uk

Abstract

Customer satisfaction for online purchase and its subsequent influence on customer trust is a

pivotal in the proliferation of online businesses that in turn can foster global and national eco-

nomic growth. The significance of understanding perceived value in the context of online shop-

ping is as important as is in the context of traditional shopping. Quantitative data were collected

from customers, who have online shopping experience. The analysis, carried out using structural

equation modeling, suggests that customers' perceived acquisition value has a significant impact

over their satisfaction which affects their trust with regard to an online retailer.

1|INTRODUCTION

The online retailer's growth as company is significantly dependent on

customers' trust on the firm. As evident in extant literature that firm

growth significantly depends on customer orientation and customers'

perception of value received from the transaction, level of satisfac-

tion, loyalty and overall trust to the company (Hay, 1992; Keiningham,

Aksoy, Cooil, & Andreassen, 2008; Lu, Liu, & Rahman, 2017; Reicheld,

2003; Sirgy & Lee, 2008). Therefore, the integrated relationship

among customers' perceived value, satisfaction, and trust on the e-

retailer would play an instrumental role for the company's success to

ensure its seamless growth. In a similar way, Dhar and Glazer (2003)

and Johnson and Selnes (2005) argued that in order to manage com-

pany growth, profitability, and shareholder value, the firms should

focus around broader managerial perspective that takes into account

the firm's entire customer portfolio. Customers' behavioral actions are

important for the firms, irrespective of the industry. In the context of

online retailing, the significance of customers' behavioral actions are

more significant as in this case, the interaction between buyer and

seller is virtual. Due to the rise of phishing online scams and fraudu-

lent activities, customers are very wary for browsing through any

retailer's website, making a transaction and recommending that to

other customers. Customers' such actions are highly determined by to

what extent they are satisfied with and trust the e-retailer. In extant

literature, there are several studies which investigated firm growth

through macro strategic factors; however, very few studies have used

micro lenses such as underpinning variables of customer behavior to

explain customer growth. Therefore, in this study we would develop

and investigate an integrated pathway to build up trust for the online

retailer which is instrumental for the overall growth of the company.

Due to the rise of phishing online scams and fraudu-

lent activities, customers are very wary for browsing

through any retailer's website, making a transaction

and recommending that to other customers

Since the advent of e-commerce, its application has increased at

an exponential rate. The customer's tendency to do online shopping

has been growing at great speed and in many cases, at the expense of

traditional shopping (Anselmsson, 2016). In understanding the cus-

tomers' both online and offline shopping behavior, perceived value

plays an important role. The significance of understanding perceived

value in the context of online shopping is as important as is in the con-

text of traditional shopping. Although perceived value is difficult to

define and measure, the most common definition is a ratio or trade-

off between quality and price, that is, value for money (Yu, Zo, Kee

Choi, & Ciganek, 2013). Consumers assess the net gain obtained from

acquiring, possessing, or using a product which influences relational

outcomes, such as consumer satisfaction, trust, and loyalty. While

doing so, consumers compare the purchase price to the reference

price held in their memory and obtain a transaction value which may

lead to hedonic and ego-related benefits from taking advantage of a

good price deal (Grewal, Monroe, & Krishnan, 1998). This double

aspect of transactions has been largely documented in Thaler's

exchange theory (Thaler, 1983, 1985).

Customers' perceived value has a significant impact on their con-

sumption behavior. However, relatively few studies investigate the

DOI: 10.1002/jsc.2232

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