Building E-commerce Trust
Applying Usability Principles

Front Page | Table of Contents | Introduction |
Chapter 1 | Chapter 2 | Chapter 3 | Chapter 4 | Chapter 5 |
Conclusion | References |


The concept of trust has been thoroughly explored in this thesis. Several different theories, opinions, statements, areas, and literature that have an importance on trust, have been integrated, and a model has been provided. In order to answer to the general problem statement of this thesis, elaborate answers are given to the five sub questions which are mentioned in the introduction. In the last paragraph, recommendations for e-commerce companies, research limitations, and recommendations for future research are given.

In the network economy, which areas need to be explored and defined in order to understand the importance of trust?

Four areas have been discussed in this thesis that have to be explored in order to understand the importance of trust: the Internet, e-commerce, Web design, and e-commerce trust. A fifth sub area has been added that belongs to the area of Web design: usability.

The Internet is one of the fastest growing mediums the world have ever known. It contains several features, among which e-mail, HTML, World Wide Web, and Web browsers. Originally dominated by academic content, the Internet has gradually evolved into a true economy. The statistics have shown that rich and developed countries account for 82% of the online population. The success of the Internet make it indispensable for companies to have an online presence.

E-commerce is an integral part of e-business, which involves buying and selling goods and services electronically. The shopping cart system is the most advanced and efficient type of e-commerce Web site, although it is subject to high expenses. Only 3.2% of visitors to an e-commerce Web site actually make a purchase. Therefore, e-commerce companies have substantial interest in designing trustful Web sites as many customers use them for cross shopping.

Web design is the process of developing a Web site according to pre-set codes. Web design is simultaneously 1-dimensional and N-dimensional. This implies that Web sites have to be designed simply and clearly, and that navigation has to be transparent and easy, otherwise users tend to go somewhere else. E-commerce Web sites in particular have to take these considerations into account, because customers use e-commerce Web sites for convenience and ease of use.

A model to understand e-commerce trust has been provided, consisting of four phases, namely unawareness, building trust, confirming trust, and maintaining trust. The last phase has been called lock-in. The second phase, building trust, has been argued to be the most important one and is optimised by pursuing a good Web design strategy. Four extraneous factors have been discussed that increase the level of trust: increased experience with the Internet, increased numbers of hours online at home, using the Web for financial services, and significantly relying on e-mail.

Usability has been defined as facilitating the buying process of customers as much as possible. The concept of usability goes very well with the implications made above, namely that e-commerce Web sites need to be transparent, easy to navigate, clear and simple, and well designed to favour cross shopping. Indeed, many usability elements have been statistically approved to positively influence the level of trust.

In the network economy, which theories have an impact on building trust in e-commerce Web sites?

Four economic theories have been described that impact the level of trust in e-commerce Web sites, namely transaction cost theory, agency theory, lock-in and switching costs, and network externalities.

The concept of trust suffers from homonymy, which means that it knows many different definitions and interpretations. Economic theory view trust as a rational choice mechanism, suggesting that intermediaries lower the probability of unsuccessful trades, and consequently reduce the risk associated with trading. Definitions of trust typically include a phrase about feelings of security about the trusted party. Trust is argued to refer to a perceived attribute, or set of attributes, of the trusted person. In this thesis, usability elements has been argued to constitute the perceived attributes of an e-commerce Web site. Usability elements communicate trust, because they lower the risk of trading.

Good e-commerce Web sites have been described as excellent sources of lowering customer's transaction costs. Lower transactions costs involve, among others, fast product research, facilitating cross shopping, an easy purchasing process, and a smooth checkout. As convenience and ease of use are the main reasons people buy on the Web, e-commerce companies are recommended to design their Web sites in such as way that the customer's transactions costs are lowered as much as possible. If done so, a higher degree of trust is achieved, because customers feel more comfortable and satisfied after their visit, and because their goals are expected to be achieved in an earlier stage. Moreover, trust has an important role in establishing cooperation relationships by lowering the risk of transacting.

Agency theory exists on the part of customers, because interaction with the company creates agency costs. E-commerce Web sites are capable to reduce these agency costs by optimising customer communication and Web site transparency. Evidently, excellent customer communication results in increased customer satisfaction, whereas transparent Web sites avoid customer's suspicions that the Web site is hiding something. It goes without saying that these communicate positive feelings of trust. That is, in a competitive environment, companies have substantial interest in keeping their reputation high, reducing the risk of trading. Usability elements decrease agency costs which results in an increase of trust, because they reduce the risk of trading.

Users' switching costs were argued to be very low when surfing on Internet Web sites. A single click might suffice to go to another site. E-commerce companies have to design their Web sites in such a way that switching costs are increased. Locking in customers is the appropriate method to increase switching costs. The assumption has been made that once customers are locked in, they exhibit high levels of trust as locking in happens during the phase of maintaining trust. However, research has not been able to fully prove this statement. Several explanations might exist.

First, the usability elements that have an impact on locking in customers, do not have an impact on the concept of trust. Second, research limitations caused a failure in proving the relationship between locking in and the concept of trust. Third, there is no relationship between lock-in and the concept of trust. It might be that even when customers are locked in, they do not want to feel locked in as it goes against feelings of freedom and privacy. This would explain why locking in customers does not result in an increase of trust.

Metcalfe's Law, implying that the largest network always wins over smaller networks, serves as an excellent example of how network externalities impact the network economy. Therefore, larger e-commerce Web sites, characterised by containing very deep and broad product offerings, enjoy a higher popularity, because positive feedback is expected to set in. Indeed, the most trusted e-commerce Web sites on the Internet are among the biggest ones. These Web sites score high on some trust elements, such as competence, expertness, predictability, and credibility. So, network externalities increase trust, because they are characterised as possessing elements which positively influence trust.

How can these theories be integrated into the explored and defined areas?

A model has been provided that describes the interaction between usability, Web design, trust factors, economic theories, and extraneous factors. Six trust factors exist that form the basis for building trust in an e-commerce Web site (see next question). Several usability elements can be applied to these six trust factors. Usability elements are mainly Web design elements as they are to be integrated into the Web design of a Web site.

A change in the level of trust requires a change in psychological characteristics of a customer. Commonly, increased satisfaction results in increased trust. Increased trust can be achieved by a direct or an indirect change in satisfaction. An indirect change in satisfaction happens when the customer's transaction costs and agency costs are lowered, when network externalities arise, and when the customer experiences a lock in process. Usability elements are characterised as increasing trust by an indirect change in satisfaction.

Extraneous factors and other components of the six trust factors may have a more direct effect on satisfaction and subsequently lead to an increase in trust. A direct effect on trust is not expected, because trust requires a psychological change which involve other internal feelings to be changed first. This thesis has showed that by increasing a Web site's usability, the level of satisfaction should be greatly increased, which is considered as the driving force in increasing the level of trust.

Which factors influence trust when building an e-commerce Web site?

Six factors form the basis for building trust in an e-commerce Web site: brand, navigation, fulfilment, presentation, technology, and security. These factors are to be considered all encompassing from which different components can be added in order to optimise their effectiveness. In this thesis, usability components have been added:

Building a good brand equity can be achieved by enjoying high rankings at reputation managers and by getting involved in alliances, although research demonstrated that mentioning alliances do not communicate sings of trust. These approaches, however, give substantial rise to network externalities. Request and relationship marketing lower user's transaction and agency costs, and tend to lock in customers. Affiliate programs containing deep links are considered to be an interesting usability principle, although no statistical evidence has been found on their effect on trust.

Navigation is key to building a trusted e-commerce Web site. Usability principles that positively impact the level of trust are the use of navigation standards and the avoidance of design elements that work against the back button. In general, increasing navigational usability lowers transaction costs and increases trust. Research proved that the absence of a good search tool decreases trust, and that making use of local navigation does not tend to increase the level of trust. However, local navigation is to be considered as an interesting and easy method to lock in customers.

Usability in fulfilment can be achieved by disclosing information up-front and by using e-mail in a customer friendly way. Up-front information makes the buying process more transparent, while appropriately using e-mail optimises communication with the e-commerce company. Both usability elements reduce agency costs for the customer, increasing the customer's feeling of trust. Providing product availability was the only exception found on this statement as no relationship with the concept of trust was proved.

A good presentation of an e-commerce Web site is crucial, because it is the first thing users look at after having loaded a Web site. It is recommended to use presentation standards, to take greatest care of content design, and to avoid advertising design. Doing so should have a positive effect on trust as some agency and transaction costs are expected to decrease.

Technological usability principles involve a fast download speed, avoiding bleeding-edge technology, and making use of customisation and personalisation. Fast download speed reduces transaction costs, while customisation and personalisation increase customer's switching costs and lock them in. Research has accepted the hypothesis that good Web site performance reduces transaction costs and subsequently increases trust. No proof has been found on the relationship between personalisation and the concept of trust.

If people feel secure about an e-commerce Web site, their level of trust is greatly increased. Legal documents are expected to increase transaction costs and decrease trust, although research results showed otherwise. People might be very much concerned about their privacy and security, so that an increasing number of legal documents trades off a decrease in transaction costs. Therefore, the conclusion has been made that increased numbers of legal documents are expected to increase trust. Usable security involves an appropriate way to deal with id's and passwords, which locks in customers, and therefore was expected to increase trust. Research has showed that the omnipresence of sign-in pages and their standardised character, reduces the level of trust in the absence of sign-in pages and sign-in standards.

How important is the concept of trust for e-commerce Web sites?

After the terrorist attacks on the United States on September 11, 2001, many voices have started talking about a changed world. As having argued in the introduction, a changed world where the concept of trust got an even more important role, especially concerning the network economy. Specifically, it is to be argued that the overall level of uncertainty avoidance has increased on a global basis. One of the reasons why e-commerce experienced strong growths in the United States, the Scandinavian countries, and the United Kingdom, is the fact that these countries score low on uncertainty avoidance. It is also explains why e-commerce experiences more difficulties in Latin countries, South European countries, and Asian countries, which score remarkably higher on uncertainty avoidance. An increase of uncertainty avoidance on a global level will force e-commerce companies to consider issues of trust to a higher degree. It might result in different strategies being pursued in order to safeguard the further growth of e-commerce.

As the main reasons of people not buying on the Web involve security and privacy reasons, it goes without saying that the concept of trust enjoys prime importance. This thesis has showed that many usability elements have a substantial impact on the trustworthiness of e-commerce Web sites. As opposed to the sayings of some authors that usability elements threaten the distinctiveness and the creativity of Web sites, this thesis has a totally different conclusion, which results as an implication of Jakob's Law stating that users spend most of their time on other sites.

Jakob's Law communicates that users prefer a Web site to work the same way as the other sites they already know. As the network economy is characterised by network externalities, the biggest e-commerce Web sites are simultaneously the most successful, the most visited, and the most trusted Web sites. Moreover, these Web sites are equally well characterised by scoring very high on the application of usability elements. This implies that other e-commerce Web sites are recommended to follow similar design elements and Web site strategies if they want to be perceived as trustful. It implies, furthermore, that the application of some usability elements might increase trust only because the most trusted e-commerce Web sites make use of them.

The success of e-commerce Web sites lies partly in the fact whether they are able to implement usability elements as much as possible. Although usability elements might tend to standardise the Web, a true competitive advantage can be achieved by implementing them. As opposed to the dirt world, where competitive advantages are often achieved by serving niche markets and by following distinctive strategies, the World Wide Web functions differently, because issues of trust, security and privacy have to be considered. On the Web, a competitive advantage can be achieved by creating Web sites that are transparent, usable, and that look similar to the Web sites users mostly visit and are familiar with. This will ensure a significant level of trust and will lead an e-commerce Web site to its success. In other words, applying usability elements is about building a competitive advantage in e-commerce Web sites.

Recommendations, research limitations, and future research.

This thesis has showed that applying usability elements in the Web design of e-commerce Web sites can have an important influence on trust. It is recommended for e-commerce companies to apply usability principles to a great extent, because they typically lower user's transaction costs and agency costs, which decreases the risk of trading. Deviating from Web design standards is to be avoided, because its decreases the user's perception of predictability. Designing Web sites that look familiar to users is the key strategy to be considered by decision makers. Familiarity on the World Wide Web means applying Web design strategies similar to those applied by e-commerce companies enjoying a high degrees of network externalities. This will ensure the user perceives an e-commerce Web site as credible, competent, and predictable. In consequence, due to an indirect effect, trust will be created.

Although the research has been able to statistically prove many positive relationships between usability elements and trust, several research limitations exist that might have impacted the research results. Suffering from homonymy, trust is a difficult concept to investigate being different from person to person. Moreover, a direct customer approach might generate more convincing results concerning the relationship between usability elements and trust. Other research limitations that might have affected the research results involve 1) the investigation of a limited number of Web pages of the e-commerce Web sites being selected, 2) the reliance on Jakob Nielsen's usability articles, 3) the rapid changing nature of e-commerce, and 4) a negative correlation between Bizrate's trust factors and non-trust factors. This last limitation is expected to be absent, because a negative correlation was argued to be very unlogical.

Some of the research limitations could be solved by conducting different research methods. The research conducted in this thesis should be viewed as exploratory research, opening the way to future research. More usability elements might exist that affect trust. Moreover, the usability elements researched in this thesis might be researched in more detail to reveal their impact on trust further. Concluding, this thesis has empirically proven that there exists a positive relationship between the application of usability elements and the generation of trust. Future research might explore this relationship in greater detail.