1

Abstract –The e-commerce business

has demonstrated to be an alternative for

customers who gradually have transformed

their traditional business activities.

However, the lack of trust creates a barrier

in the adoption of online shopping due to

the customers being unable to touch or

interact with a product or service before

making the decision to purchase it. This

study examines the concept of trust from

different perspectives in order to determine

how this complex concept can be applied in

online trust. An online model of building

trust and decision making process are

analyzed which allow one to know how the

trust is forming over the time and which are

the factors that have a significant impact on

online trust in e-commerce environment.

Keywords - E-Commerce, E-Trust,

Online Shopping, Building trust.

I. INTRODUCTION

Advances in technology and the use of

the internet in our daily lives have changed

the way in which the businesses

transactions and operations are being

developed all around the world. With the

adoption of e-commerce, businesses can

sell products and services over the internet

24 hours a day reducing costs related to

personnel and retail space and attracting

new consumers. However, since the

transactions are performed without personal

contact and handling products, consumers

in the e-commerce environment are more

exposed to issues related to fraud or theft of

credit card details, sharing personal

information with other entities, not receive

the right products, and difficulty in

returning product by errors in the request

(Bhathagar et al., 2000; Constantinides,

2004). In addition, an analysis developed

by Hoffman et al. (1999) described that

63% of users do not provide real personal

information to websites due to their not

knowing how their data will be used and

also to avoid any risk. Thus, trust is the

most important factor in any commercial

transaction conducted over the internet

where consumer confidence needs to be

cultivated to continue with the growth of

the business (Chellappa and Pavlou, 2002).

Without consumer trust, e-commerce will

never reach its full economic potential

(Ferraro, 1998).

The remainder of the paper is organized

as follow: Section 2 defines e-commerce

concept and its advantages and

disadvantages. Section 3 describes in detail

the trust definition from different

perspectives and disciplines. Section 4

presents a brief analysis on online trust and

the factors that are associated to e-

commerce. Also a model has been included

to understand how the trust is being built in

this type of environment. Section 5 includes

a brief explanation about how the decisions

to make online transactions are generated.

Section 6 describes a case study as an

example the trust online. Section 7 includes

recommendations which can be addresses

in the future work in this area and the last

section contains a brief summary of the

findings in this paper.

II. E-COMMERCE

A. What is E-Commerce?

E-commerce as defined by (Hutt and

Speh, 2004) is the process of buying and

selling of goods and services over the

internet using computers in order to transfer

Consumer Trust in E-commerce

Environments

Wendy Yánez School of Computer Science, University of Birmingham

Bimingham, United Kingdom wpy443@student.bham.ac.uk

2

funds through digital communications. In

short, e-commerce constitutes a medium of

buying and selling of products and other

online services using internet (see fig. 1.).

Internet shopping (or e-commerce)

differs from traditional commerce in terms

of the quantity and quality of information it

offers to customers and because it requires

the development of customer loyalty and

trust in this marketplace. Combining the

open system environment of the Internet

and the intensive communications

requirement of being a remote shopping

innovation, the adoption of Internet

shopping becomes more complex and

difficult to expect (Slevin, 2000).

Technological advance is not the unique

requirement to adopt the online shopping,

there are other factors related to customers

as trust in the company and, especially, the

shopping channel in which they are going

to develop the transaction should be also

taken into account.

B. Types of E-Commerce

The e-commerce business is very

complex and can be applied for different

purposes, several models have been

identified such as: B2B (Business-to-

Business), B2C (Business-to-Consumer),

C2B (Consumer –to-Business), C2C

(Consumer-to-Consumer), B2G (Business-

to-Government) and M-commerce (Mobile

Commerce). According to Hutt and Speh

(2004), B2C provides the following

facilities:

Product information: Information

on new and existing products is

available on websites.

Sales: Products are sold from the

websites and allow the user to track

their order.

Service: Electronically users can

receive a feedback about any

problem with the order.

Payment: Electronic payment is

used to complete these transactions

C. Pros and Cons with Purchasing

Online

E-commerce is continuously growing

and according to Hansen et al. (2005),

people purchase online for the following

reasons:

Convenience: Easy and fast

without moving out of the home.

Greater supply: Offer more

variants of products.

Lower prices: Online stores are

able to cut expenses.

Price comparison: Consumers can

compare competitors’ prices on

products and services.

Saving time: Transaction can be

completed in seconds.

Although there are many reasons for

opting online purchase, some negative

aspects have been identified by Windham

and Orton (2000) as follow:

Fig. 1. E-commerce process (2010)

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Consumers can not appreciate the

real shopping experience of

touching things and trying items on.

Returning products is a possibility

because they have not met the

consumer’s requirements.

Customers are not familiar with or

trust the company’s brand, so they

are hesitant to perform online

commerce.

In general, the physical experience of

shopping in a traditional store is absent in

e-commerce, so the lack of trust is the main

reason for not purchasing products or

service online.

III. TRUST

According to the Oxford English

Dictionary (1971), trust is defined as

‘‘confidence in or reliance on some quality

or attribute of a person or thing, or the

truth of a statement’’ (p. 3423).

Nissenbaum (2001) suggested a definition

for trust as “An extraordinarily rich

concept, covering a variety of relationships,

conjoining a variety of objects. One can

trust (or distrust) persons, institutions,

governments, information, physical things,

systems, and more”. In this section a

general overview of trust from the

disciplines of philosophy, psychology,

management, and marketing is provided to

illustrate the nature and concept of trust.

A. Psychology

From a psychological perspective,

researches on trust focus on individual

personality differences and development

throughout the life (Lewicki and Bunker,

1996). In general, trust is difficult to define

trust because it can apply to different types

of relationships, varies across contexts, and

is multi-dimensional (Deutsch, 1958;

Rotter, 1980). Game theory perspective has

allowed analyzing the interpersonal trust

concept where the trust is determined by

communication, experience and motivation

(Deutsch, 1958; Kee and Knox, 1970).

Other psychological findings suggested that

the trust is affected by elements of risk and

vulnerability (Zand, 1972).

B. Sociological

Researchers examine the trust from the

perspective of social relationships that are

created between people (Barber, 1983;

Good, 1988). Many sociologists manifest

that trust is an essential element in any

relationship and without trust; modern

society would not be possible (Barber,

1983; Macy and Skvoretz, 1998). Most

researchers agree that building trust is a

challenging process where experience is

critical and information about past

behavior, goals and reputation are required

(Barber, 1983; Good, 1988; Buskens, 1998;

Seligman, 1998). In addition, trust is

commonly viewed as a dynamic process

which must be built over time and is

dependent on situational context (Lewis and

Weigert, 1985; Good, 1988; Buskens, 1998;

Macy and Skvoretz 1998). Some

sociologists also believe that trust cannot

exist in the absence of risk (Seligman,

1998).

C. Management

From management's perspective, trust

has been studied intensively in

organizational contexts. In this sense, Wang

and Emurian (2005) have defined the

organizational trust as ‘‘the belief that the

decision makers will produce outcomes

favourable to the persons interests without

any influence by the person’’ (Driscoll,

1978). Another role of trust that was

recognized it to reduce the cost of both

intra- and inter-organizational transactions

(Uzzi, 1997). Moreover, management

researchers generally consider that business

performance can be improved with trust

development.

D. Marketing

In the discipline of marketing, findings

about the trust have been generated related

to the distribution channels (e.g.,

manufacturer–retailer) and buyer-seller

relationships. In this context, there is a

particular area of research which focused on

how to maintain long-term relationships in

distribution channel considering that

arrangements about the costs were

relatively high. Kumar (1996) and other

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researchers suggest that trust should not be

considered as a power by the contrary as a

tool which helps to manufacturers or

retailers to gain more tangible benefits and

develop their full potential, thus facilitating

long-term commitments.

E. Business - Economics

Risk occurs as a topic in business-

economic related literature. As a reported

by Dowling and Staelin (1994), risk is

defined as a consumer’s perception of the

uncertainty and adverse consequences of

engaging in a commerce activity.

Furthermore, researchers agreed that risk

and uncertainty are primordial factors to

achieve trust (Lewicki and Bunker, 1996;

Mayer et al. 1995). So, the level of trust

requested or needed in online environment

has an intimate relationship to the degree of

risk which is presented in business

transactions (Konrad et al. 1999; Povey

1999). In general, across all the studies

performed by other disciplines, they agree

that trust can be perceived only in an

uncertain and risky environment and it is

developed over the time.

Although these multi-disciplinary

perspectives on trust have added richness to

the e-commerce environment, but they have

expressed inevitable differences of opinions

over its nature. Most researchers conclude

that trust is important in a range of

organizational activities and processes such

as team work, goal setting and cooperative

behaviors.

IV. ONLINE TRUST IN E-

COMMERCE

According with Mayer et al (1995),

“online trust is the willingness of a

consumer to be vulnerable to the actions of

an online store based on the expectation

that the online store will perform a

particular action important to the

consumer, irrespective of their ability to

monitor or control the online store”. This

definition provides a complete view of the

trust applied to different operations and

transactions online. Trust is more difficult

to build and more critical in online, than

offline, business environments (Hodges

1997; Ratnasingham 1998; Hoffman et al.

1999; Roy et al. 2001). Online transactions

are characterized to be more impersonal,

anonymous and automated compared with

offline transactions (Head et al. 2001).

In e-commerce environment,

consumers do not know in which way their

personal information will be used. They

only believe in that their private data will

not be abused by the vendor. Due to this

issue, consumers sometimes decide to

protect their personal information by

providing falsified their personal details.

However, hiding important details deprives

the online vendor of valuable information

that could be used to tailor their products or

services to individual customers using the

supplied data. Conforming to the research

developed by Milne and Boza (1999), it

suggested that consumer trust levels vary

by industry and depends also on how much

information is captured and whether it is

shared. Additionally, Simmons (1993)

claimed what trust level varies across

organizations, cultures, and even in each

person. Thus, Milne and Boza (1999) have

recommended that online trust can be

increased through honest divulgation of

information and the use of information

practices that assure the consumer's private

data.

A. EC-Trust Parties

In the B2C e-Commerce environment,

three main parties interact to determine

consumer trust levels. These trust parties

are:

Consumers: They have significant

experience in the traditional

market, but may not be as familiar

with online marketplace (Erickson

1963; Bowlby 1973). Therefore,

they try to establish trust before

interacting with a vendor in order to

acquire their products or services.

Vendors: Trying to build trust

among consumers in order to sell

their products or services. Vendors

may have both physical and an

online presence which results to be

more successful compared to solely

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operate in the electronic

marketplace. (Head et al. 2001).

Referees: Corresponds to third-

parties who provide independent

recommendations on the

trustworthiness of vendors. In this

way, trust seals are an important

mediating factor in building online

consumer trust.

B. EC-Trust Lifecycle

Many researchers hold that the trust is a

dynamic process that may increase or

retreat over time and with experience

(Ravald and Grönroos 1996; Roy et al.

2001). Head et al. (2001) distinguished four

phased lifecycle for developing online

consumer trust: chaos, establish, enhance,

and maintain where, all of them are linked

in a sequential and interactive way and

evolve over time (Lewicki and Bunker,

1996). The Online Trust Building Model

proposed by Head et al (2001) outlines the

phases of consumer online trust and

integrates the necessary interactions

between consumers, vendors and referees to

progress from one trust phase to another

(see fig. 2.).

In the first stage of online shopping

process, consumers may feel a sense of

chaos in the e-Commerce market, due to

they fear that their personal information

may be stolen or that online businesses may

be fraudulent. These considerations

suggested that the security mechanisms

applied on the websites have been not

effective. With appropriate motivation, trust

can be established over time, as consumers

become more familiar with the new

technology and the marketplace. If trust is

established and the initial transactions with

vendors met consumer expectations, then

consumer trust is reinforced and further

enhanced (Roy et al. 2001). As consumers

continue to experience successful

transactions, trust is maintained. However,

consumers continuously receiving positive

recommendations from referee, negative

reviews or remarks may still influence

consumer perceptions of vendor trust.

Trust also involves vulnerability, so

when people trust in online environment,

they are exposing themselves to risk. If

consumers experience a violation of trust,

they may easily revert back to the chaos

state where trust may be more difficult to

reestablish (Head et al. 2001). Lewicki and

Bunker (1996) proposed that violations of

trust will have different outcomes in

different phases of the trust lifecycle. So,

the model shows that the gap of trust will

send a consumer back to a state of chaos.

Nevertheless, if the relationship between

the consumer and vendor is strong (at the

maintain stage) and the violation is not

perceived to be intentional, then trust

violation consequences may be less severe,

possibly reverting to a previous phase (such

as establish or enhance).

Fig. 2. Online Trust Building Model (2002)

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C. Contributing Factors of EC-

Trust

Trust is essential in the electronic

commerce. Sanner (1997) identified three

bases upon which the trust can be built. The

first base is personality-based trust, which

in general is associated to the characteristics

of the person to be trusted. The second base

is related to the knowledge level of the

other party. The third base is institutional,

where trust is based on established

parameters and mechanisms that regulate

the relationship between the parties who are

involved in a transaction (see fig. 3.).

A. Personality-based trust

Known also as propensity to trust, it is

defined as the tendency to depend on

something from others in different

situations (Mayer, et al., 1995; McKnight et

al., 1998; Kacmar et al., 2002). This form

of trust is based on a belief is influenced by

cultural background and personality type.

So, these beliefs play an important role in

the initial stages of a relationship (Mayer, et

al., 1995), which will be more or less stable

depending on nature of the interaction

(McKnight et al., 1998).

Some researchers revealed that

propensity to trust is directly applied to

trust in the ecommerce. Thus, an online

shopping research over Amazon.com

suggested that inexperienced online

consumers should consider the propensity

to trust on others as a primordial factor to

start a business relation online. So, in the

absence of social cues and experience with

an online retailer, new consumers have to

base their trust essentially on their

socialized propensity to trust (Gefen, 2000).

In addition, other studies were carried out in

U.S.A., Singapore, and China which

indicated that propensity to trust positively

affects the consumer's trust in electronic

commerce (Teo, et al., 2007).

B. Knowledge-based trust

Knowing the other party sufficiently

well gives the capability to predict their

behavior (Lander, et al., 2004). So, this

knowledge of each other is acquired in two

different stages: first-hand and second-hand

knowledge. A familiarity with the online

vendor is the base of the first-hand

knowledge where interaction with a

particular party allows increasing the

consumer trust on Internet stores and starts

with “relationship exchanges” which

encompasses money and personal

information (Hoffman et al., 1999).

Furthermore, the second-hand knowledge is

associated with factors like familiarity,

reputation, brand, and website quality

which have a direct repercussion on trust,

due to face-to-face communications and

physical interactions are not present

(Bunduchi, 2005).

Familiarity

Antecedents such as familiarity

between parties suggest that the

development of trust is accumulated over

time and requires interaction history

(McKnight et al., 1998). Familiarity allow

reducing social uncertainty with the

increase of comprehension of current

actions of the commerce online, while trust

help to have a better understanding of the

future activities of the other party

(Luhmann, 1979). In e-commerce,

familiarity involves a growth of

Fig. 3. Factors in online trust (2008)

Fig. 3. Factors in online trust (2008)

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accumulated knowledge gained from

previous successful interactions on website

(Gefen, 2000). Thus, consumer trust will be

increased by the level of familiarity with a

trustworthy online vendor.

Reputation

From consumer perception, reputation

is defined as the belief that a store is honest

and protects its consumers (Doney and

Cannon, 1997). When consumers have not

had a previous experience with a vendor,

sometimes hearing positive experience from

others users can help them to change their

perceptions of risk and insecurity about the

online transactions and so helps foster

consumer trust. There are possibilities of

finding online vendors with a good

reputation which are seen as trustworthy

while there are others which are

untrustworthy due to bad reputation

(McKnight et al., 1998). In this way,

Amazon.com reputation has increased its

sales (Barnes and Vidgen, 2002). Some

empirical studies related to online shopping

with books or travel indicated that, online

trust is directly impacts for the reputation of

online vendor (Jarvenpaa, 2000).

Brand

In agreement with the researcher Kotler

(1991), the term brand can involve a name,

symbol, or design, or combination of both

which allow identifying the goods and

services that correspond to one seller or

group of sellers and differentiate them from

those of competitors”. In E-commerce,

brand has been analyzed as a surrogate for

trust (Delgado-Ballester and Munuera-

Alemman, 2001; Ha, 2004; Ha, 2005) and

has been used as the function for building

trust–based relationships with customers

(Berry, 2000). Therefore, brands give some

benefits to the customers because they

increase consumers trust on the products

that they cannot touch or manipulate and at

the same time help customers to have a

better understanding of the product buying's

process (Yousafzai et al., 2005).

In addition, brands allow simplifying

the decision-making process, helping the

shoppers to dispel doubts about the quality

and functionality of products (Dayal et al.,

1999). So, the risk level for consumers in

making business with online vendors is

decreased when a known brand is used in

online transactions (Cao and Gruca, 2004)

which contribute in the building trust

process (Dayal et al., 1999). In this context,

there are many well-known brands on the

Internet which are trusted by consumers

(Urban et al., 2000).Thus, brand should be a

relevant factor for initializing online trust in

new customers.

Website quality

Sinha et al. (2006) pointed out that

website quality should be examined in

accordance with the quality of content,

structure and navigation, and functionality.

Content refers to the information showed

on the website which should be engaging,

relevant, informative, useful and

appropriate for the consumer.

Structure and navigation includes

organization's information on the site and

the instructions that help users move

through sections on the site in a quick and

easy way to check in depth the website

content. So, websites are qualified as

consistent and effective when they have a

good structure and navigation.

Functionality involves the use of

technology on the site in order to provide

some features as content's load quickly, live

links, and any new technology used to

increase functionalities and give more

relevance to the site.

In offline shopping, consumer trust

depends on the salesperson expertise,

likeability, and similarity to the consumer

(Doney and Cannon, 1997). However,

online environments substitute the physical

salesperson with help buttons and search

features that allow increasing the consumer

trust in the shopping experience (Lohse,

1998). So, a well-designed website should

provide consumers enough information

about buying decisions, user-friendly

navigation, and instructions to complete a

successful ordering process. An empirical

study indicated that website quality has a

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positive impact on trust from Internet users

(Corbitt et al., 2003). In general, the

formation of consumer trust in online

environment will depend on the quality of

website.

Customer service

Customer service is defined as the

process that focuses on achieving users

expectations by executing actions that users

required in the proper time (Wagenheim

and Reurink, 1991). Conforming to some

researchers, maintaining consumer retention

can be reached by responding to services or

products failures in a fair manner in order to

meet the consumer’s expectations in an

effective way (Huppertz et al., 1978; Oliver

and Swan, 1989). These findings suggest

that purchase intentions will remain stable,

and possibly increase, when service

recovery is effective. However, a poor

customer service effort could affect the

future intentions to buy something from the

failing firm, due to the firm does not

reaching the customer expectations and it

dramatically reduces the trustworthiness of

the firm.

C. Institutional-based trust

McKnight et al. (1998) proposed a

definition of institution-based trust which is

focusing on customer's beliefs about

impersonal situations and favorable

conditions that allow them to feel safe and

comfortable during the online transaction's

execution. Some trust building strategies

related to security, privacy and third party

assurance are proposed based on structural-

assurance mechanism.

Perceived security

Many researchers have recognized

security as one of the major barriers in the

adoption of e-commerce (Furnell and

Karweni, 1999). From computing

perspective, this term has been defined as

protection mechanism against threats that

cause economic hardship in the form of

modification, disclosure of data, denial of

service, fraud and abuse (Kalakota and

Whinston, 1996). In the context of

electronic commerce, transactions can be

vulnerable to theft of credit card

information, or stealing of personal

information which occur via false or

defective authentication. So, security

controls are required to ensure timely and

accurate completion of transactions, prevent

fraud and third-party manipulation, ensure

smooth transactions, and safeguard

transaction authentication. All these aspects

are basic conditions that have to be taken

into account and have to be managed for

technological and organizational support in

order to achieve a successful e-commerce.

Findings on this factor suggested that trust

in e-commerce depend on the security level

perceived by the users during online

purchase (Chellappa and Pavlou, 2002;

Yousafzai et al., 2005; Wang et al., 2004).

In this context, while the perception of

security risk decreases, trust in online

environment should increase.

Perceived privacy

Privacy involves the protection of

accessing, using, and disclosure of private

personal information collected about

consumers in order that it cannot be shared

with other websites (Friedman et al., 2000).

Many surveys show that consumers are

concerned about the way in which

organizations are managing their personal

information. So, the privacy goal is

synthesized in increasing the autonomy

and/or minimizing vulnerability. In online

environments, opposite to offline

environments customers perceived an

insignificant control over information

privacy. Reaching full potential in e-

commerce requires that privacy can be

analyzed and addressed in the correct way.

Some empirical studies related to e-

commerce argued that the perceived

privacy is an indispensable factor in this

kind of business and is positively associated

to the inspiration of the trust (Liu et al.,

2004; Wang et al., 2004; Yousafzai et al.,

2005). In this way, online vendors should

be able to protect the customer's personal

information and prevent credit card misuse

during shopping online.

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Third-party assurance

In the electronic commerce context,

certifying third parties or intermediary

mechanisms such as TRUSTe, BBBOnLin,

CPA WebTrust, Verisign, insurance, etc.,

can help to create the required trust between

the online vendor and its consumers.

Without the intervention of these parties

there is no way to guarantee the quality of

the online content, and the influence of the

websites behavior. E-commerce industry

has contributed to the development of third-

party certification as a mechanism to help

consumers feel more secure when

conducting online transactions. So, these

third-party intermediaries are used to

protect consumers by reducing risks and

inspiring trust (Tang et al., 2003). In

addition, e-commerce defines insurance in

terms of financial compensation in order to

fully cover the cost of a credit card

purchase when something goes wrong or

cover other issues which involve

destruction of data by mistake (Friedman et

al., 2000). Therefore, using insurance on e-

commerce environment should impact in a

positive way the consumer trust (Gefen et

al., 2003; Kaplan and Nieschwietz, 2003).

V. E-COMMERCE DECISION

PROCESS AND SOCIAL

INFLUENCE

In this section we describe a customer’s

decision making process in E-commerce

and examine how social influence affects

each decision making step.

We also examine how data about the

social influence can be captured by E-

commerce platforms and be used to test

the customer’s decision.

A. Social Influence

In E-commerce, social networks play

an important role on consumer’s final

purchase decision due to reviews written

and shared by previous customers and

evaluated by new customers on websites

help to customer to decide about a specific

product or service. As reported by Lee et al.

(2006), many online shoppers decide to

wait for others consumers’ opinions on the

internet, in order to analyze their comments

and recommendations about their

experience purchasing something. These

comments will allow new consumers to feel

confident with the buying process, reducing

the risk of buying a new product or service

on internet. In addition, Bearden et al.

(1986) observed that during the buying of

new product, two kinds of social influence

are present: normative social influence (or

subjective norms) and informational social

influence. Normative social influence is

related to the social pressure that can be

applied on new customer to influence in

their decision to adopt a new product or a

service. Informational social influence

analyzes the experience of early customers

from their publications in social networks

which will allow them to decide whether to

buy or not a new product. Thus,

informational social influence is a learning

process that helps customers to feel more

confident about the product that wish to buy

(Lee at el., 2006).

In this section an approach is presented

which allow measuring the benefits and

repercussions that social influence could

have between consumers of an online

shopping environment. First, trusted

sources provide high quality reviews and

personalized comments about a determined

product in order to convince online

shoppers to buy them. Second, a company

producing a product may get customers’

direct and detailed responses and be in a

better position to predict market trends.

Third, marketing based on a social network

can try to identify opinion leaders who have

a vast experience in E-commerce websites

in order that they can influence in a positive

way on the site and maximize its

effectiveness. Many studies on this topic

(Kempe et al, 2003; Hill et al., 2006; Engel

et al., 1990) have demonstrated that

marketing based on social network provide

more benefits in terms of cost and

effectiveness compared with the traditional

direct marketing, which manages customers

as an independent decision maker without

taking into account the effect of the

influence of their social network.

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Fig. 4. Decision Making Process in E-Commerce (2007)

Therefore, influential consumers can

have a direct impact on viral marketing,

propagating a cascade of influence through

a social network in which friends will

voluntarily share their experiences or can

recommend to other friends, the product or

services that they previously have used

(Kempe et al, 2003). Thus, a company can

avoid marketing directly with a specific

consumer who is influenced by friends and

not going to buy a new product unless he

has have a recommendation or advice for

purchasing it. Therefore, the construction of

a social network with influential customers

has been a key issue for marketers as well

as sociologists which require interaction

between consumers to create more social

nodes.

Over the internet, there are some online

communities such as Epinions.com which

encourage users to provide trust data. In this

type of social networks, users explicitly can

express their trust to other participants,

leading to the construction of personalized

webs of trust. Many e-commerce websites

such as Amazon.com allow a consumer to

buy a product as a gift for friends and to

recommend it to other friends in order to

build a trust network. In addition, each

consumer can write product reviews and

also express how useful were the reviews

written by other consumers which will be

used as feedback for new customers.

B. Example E-Commerce Decision

Making Process

In general, decision making process

associates the following stages: Need

recognition, Information search, Evaluation,

Purchase and after purchase evaluation in

which a consumer has to make one or more

decisions (see fig. 4.). In order to describe

the image, an example has been included to

achieve a better understanding of each

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phase in the process (Engel et al., 1990).

Consider a customer Jane who wants to buy

a book about “social networks” in an online

shopping site.

Decision 1: Jane has the necessity to buy a

book related to “social networks.” She is

thinking if she should go to Amazon.com

where she shops often, or she should try

another online store such as Barnes &

Nobles. In addition, she is considering the

possibility to visit a Web-based community

site such as Epinions.com in order to search

in advance information about the product

that she needs at the moment.

Decisions 2 & 3: She decided to start her

research in Amazon.com. She searches for a

book about “social networks” considering

some details, such as, editorial reviews,

sample pages, customers’ reviews about a

few books and compares all those

information with her preferences (e.g., not

too thick, soft cover, and for a beginner,

price, customers’ reviews and reviews’

ratings, as evaluated by other customers).

At this point, she has to determine which

book to buy and decide if she would like to

rate some reviews that were helpful in

making a purchase decision or make a

comment related to one of them.

Decision 4: After she found the book that

she needs to buy, she has to decide if she

should buy the book at Amazon.com or she

should try to find the same book in another

store, which might potentially offer better

shipping options or lower prices.

Decision 5: When she decides to place an

order at Amazon.com, this website

automatically recommends her a set of

books which are related with the same topic

that she needs and those some customers

frequently purchased together. In this way,

she has to decide whether she is going to

buy some of the recommended books or

not.

Decision 6: After checking the

recommended books, she is not interested

in buying any of them and finally she buys

the book that she found at the beginning.

Then, Amazon.com shows a form which

allows the customer to write a review to

share her opinion about her buying

experience, to help other customers in their

decision making process. She also decides

to rate some reviews that influenced her

purchase decision of the product based on

the reviews’ accuracy or honesty which will

help other users in their online buying

process.

Decision 7: Then Amazon.com platform

gives her possibility to rate the book that

she bought. So, if she decides to rate her

book, she can receive more personalized

recommendations from Amazon.com.

When she rates products that she had

purchased, most often will help in her

future purchasing. At some decision steps,

current Web-based decision support

systems help customers in their decision

making process taking into account details

such as user preference, which is calculated

from historical purchase behavior, click

stream information, rating of purchase

products, or demographics.

Nowadays, e-commerce companies

have attempted to collect data about social

influence by encouraging a customer to

write and rate reviews (e.g., a decision step

3 and 6), as consumers are far more likely

to believe in information and opinions from

trusted acquaintances than their own

decision.

VI. CASE STUDY: EBAY

Recently, researchers in HCI and

human factors have begun to study trust in

an on-line context. A case study have been

proposed about one of the most trusted e-

commerce site on the internet, eBay which

manages a combination of feedback and

comments that help users build credibility

and establish positive reputations on

products. Moreover, a framework of trust-

inducing features has been included which

study the design and interface elements that

are necessary to perceived website

credibility.

A study performed in the summer of

2004, by the Ponemon Institute and

TRUSTe suggested that eBay is one of the

most trusted e-commerce websites on the

internet. Tedeschi (2004) argued that

12

according with New York Times report,

eBay’s has approximately 114 million of

registered users in its platform, and 90% of

them are buyers. Much electronic

commerce users who generally use these

systems to make their transactions, base

their experience on other users’ ratings of

sellers, vendors and manufacturers before

having their own online experience.

According with the features in e-commerce,

eBay has implemented a feedback platform

to provide buyers and sellers a method of

rating the purchasing process which allows

determining whether a customer should or

not do business with a particular user. So,

the combination of seller feedback and

comments are the essential tools or guides

to help users build credibility, establish

positive reputation and an in-house

customer support team create a safe

environment whereby users feel protected

(Greenspan, 2004). In its simple terms,

eBay defines feedback as the set of

comments and ratings left by other eBay

members about their experience of buying

or selling something. For each transaction,

the buyer and seller can rate each other by

leaving feedback. Each feedback consists of

a positive (+1), negative (-1), or neutral

rating (0), and a short comment (see fig. 5.).

eBay’s site provides users information

related to vendors ranking score which is

useful during the online shopping process

because it allows them to do the initial

filtering decision regarding the products

that they can look for, vendors in which

they should trust, offerings that they can

analyse and scores generated by previous

users who purchased goods from the vendor

previously. Thus, feedback policies used by

eBay are a standard way for validating the

quality of the individual with whom you are

considering having a transaction. So,

feedback is an essential component of the

individual’s online reputation. For instance

on eBay’s site, there is a section titled

“building your reputation,” which contains

information related to “Your feedback

profile made up of comments and ratings

from users who have traded with you where

your feedback profile is the most important

aspect of your reputation at eBay.

VII. FUTURE WORK

The challenge of establishing consumer

trust and their effects in e-commerce poses

problems that need further research. While

trust is an essential factor in e-commerce

which is seen as an issue in online buying

behavior, more work needs to be done to

determine how trust can be built in the

consumer and communicated to the online

vendor. Therefore, researchers can look for

strategies that allow communicating the

trust and credibility through the Web

interface or providing other solutions to

increase the user awareness level.

Fig. 5. Feedback rating – eBay transaction (2002)

13

Although establishing initial trust is

crucial in any online transaction, more

research has to be focused on understanding

how trust in e-commerce can be developed

and then maintained over time. In addition,

the paper makes a brief analysis of

antecedents of trust but a comprehensive

study should be executed to have a better

comprehension of these antecedents in the

e-commerce context from both the initial

and long-term trust perspectives.

Moreover, reputation systems provide

guidelines related to the development of

online trust. However, future research

should be done to address the limitations of

reputation systems and the role they play in

long-term trust building. Furthermore, more

work is also required to look in detail how

the dynamics of trust formation allow

establishing a network of trust between

parties of an online community or

participants of a reputation system in order

to assess the validity of such a trust-

building mechanism.

VIII. CONCLUSION

The Internet has made possible to

conduct business-to-consumer transactions

across an open network which although has

many benefits it also raises many concerns

(Chao, H., 2008). Researchers hold that the

lack of trust may be the most significant

long-term barrier for realizing the full

potential of electronic commerce (Keen

1997; Hoffman et al. 1999; Roy et al.

2001). Trust can trigger increased

purchasing to the extent that it reduces the

complexity and perceived risks of

purchasing (Gefen, 2000). However, as a

relatively young research field, research on

trust in e-commerce environment is still in

the stage of borrowing different constructs

from other theories and developing

theoretical frameworks. Sometimes

researchers neglect some important factors

that are relevant to understand trust-related

behaviors.

In this paper, a new conceptual model for

online trust and decision making process in

E-Commerce were analyzed to help to

further our understanding of online trust,

and also provide online vendors methods

for building consumer trust. First, the

Online Trust Building Method proposed by

Head et al (2001) illustrates the phases of

consumer online trust and outlines the

necessary interactions between consumers,

vendors and referees to progress from one

trust phase to another. However, this

method only considered the impact and

influence of trusted third-party referees and

their seals-of-approval as mediators for

building online consumer trust, so

viewpoints of multiple stakeholders such as

customers, employees, suppliers,

distributors, partners, stockholders, and

regulators should be taken into account to

develop a better comprehension of the trust

online from its initial stage. Second, a

framework for decision making E-

Commerce was presented where social

influence was the main feature that supports

this model which considers that consumers

who may not have complete information

about a product or service often make use

of previous customers’ opinions. It has

become apparent that the customer decision

process is influenced by information from

trusted people, not from product

manufacturers or recommendation.

Although some issues were covered in this

article, some of the trends and important

issues in e-commerce have been addressed

for future research. In general, two

important concepts related to e-commerce

were analyzed in the present paper which

corresponds to web navigation and

development of trust online. In e-

commerce, online vendors need to have a

user-friendly website where the process of

navigation and search require minimal

effort and users feel comfortable and

confident interacting with it. However,

having a user-friendly website is not

enough; it requires cultivating a climate of

trust and confidence among its users.

Therefore, ease of navigation and

establishing a climate of trust, are

determinant factors for e-commerce

success.

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