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Understanding Customers' Satisfaction and Repurchase Intentions
Understanding Customers' Satisfaction and Repurchase Intentions
Understanding Customers' Satisfaction and Repurchase Intentions
www.emeraldinsight.com/1066-2243.htm
Understanding
Understanding customers’ customers’
satisfaction and repurchase satisfaction
intentions
479
An integration of IS success model, trust,
and justice Received 22 August 2010
Revised 4 May 2011
Yu-Hui Fang Accepted 7 May 2011
Abstract
Purpose – The aim of this study is to extend DeLone and McLean’s IS success model by introducing
justice – fair treatments received from the exchanging party – and trust into a theoretical model for
studying customers’ repurchase intentions in the context of online shopping.
Design/methodology/approach – The research model was tested with data from 219 of PCHome’s
online shopping customers using a web survey. PLS (partial least squares) was used to analyze the
measurement and structural models.
Findings – Data collected from 219 valid respondents provided support for all but one hypotheses
(with a p-value of less than 0.05). The unsupported hypothesis regards the relationship between service
quality and satisfaction (H4). The study shows that trust, net benefits, and satisfaction are significant
positive predictors of customers’ repurchase intentions toward online shopping. Information quality,
system quality, trust, and net benefits, are significant determinants of customer satisfaction. Besides,
online trust is built through distributive, procedural, and interactional justice. Overall, the research
model accounted for 79 percent of the variance of repurchase intention.
Originality/value – An endeavor to extend the updated IS success model in terms of the peculiar
nature of e-commerce is needed. The study complements the updated IS success model with justice
trust perspectives, considering them a more comprehensive measure of online shopping satisfaction
and repurchase intention in an e-commerce context.
Keywords IS success model, Justice, Online shopping, Repurchase intention, Online catalogues,
Satisfaction, Home shopping, Service quality assurance, Trust, Taiwan
Paper type Research paper
1. Introduction
The business-to-consumer (B2C) e-commerce or online shopping market is growing
rapidly and has become one of the most interesting developments in e-commerce.
According to a market survey by ComScore, online sales outperform offline retail sales Internet Research
Vol. 21 No. 4, 2011
in certain key holiday categories in 2008 despite the 3 percent decline in overall sales pp. 479-503
q Emerald Group Publishing Limited
(including online and offline sales) during the holiday season[1]. Clearly, online 1066-2243
shopping market provides an avenue for struggling to survive in the turbulent markets DOI 10.1108/10662241111158335
INTR of the global weak economy. As with any transaction mode, repurchase is critical to the
21,4 success of online stores. What, then, keeps buyers loyal to an online store? E-commerce
research has addressed this issue from different aspects, including explanations based
on service quality, benefits of online shopping, trust, and satisfaction (Childers et al.,
2001; Gefen et al., 2003).
Customer satisfaction is particularly important to the success of online stores as it is
480 posited as a major driver of post-purchase phenomena, such as repurchase intentions.
In early online shopping, a web presence and low prices were believed to be key drivers
of success. More recently, web site quality has become essential for improving
customer satisfaction and creating customer loyalty (Parasuraman et al., 2005). In
traditional service research and in emerging research on electronic service (e-service)
(Collier and Bienstock, 2006), several antecedents of customer satisfaction have been
proposed. Among these, web site quality figures prominently. Several researchers have
developed conceptual models for measuring B2C web site success (Liu and Arnett,
2000). They identified three major quality constructs that are critical to web site
success in e-commerce: information quality, system quality, and service quality. Those
models are consistent with the updated information systems (IS) success model
(DeLone and McLean, 2003), a research framework theorizing that information quality,
system quality, and service quality are fundamental determinants of an individual’s
satisfaction, which in turn is the determinant of repurchase intention. DeLone and
McLean (2004) argue that IS success model can be applied to study e-commerce
success. Accordingly, the study uses IS success model as the theoretical foundation for
explaining customer repurchase intention.
Trust in the seller is a vital key to building customer loyalty and maintaining
continuity in buyer-seller relationships (Anderson and Weitz, 1989). The spatial and
temporal separation between online buyers and sellers leads to asymmetry problems.
A typical type of asymmetry is information asymmetry, which refers to a situation
where one party to a transaction has more or better information than the other party
(Akerlof, 1970). Many researchers have argued that trust is a crucial enabling factor in
relations where there is uncertainty, information asymmetry, and fear of opportunism
(Pavlou et al., 2007), as is the case in online shopping (e.g. Lee et al., 2011). Accordingly,
the first objective of this research is to integrate IS success model variables with trust
and examine their relative influences on customers’ satisfaction and repurchase
intentions toward online shopping.
Justice is a fundamental basis for relationship maintainability in social exchange
(Lind et al., 1993). Justice refers to perceptions of fairness and assessment concerning
the appropriateness of performance outcomes or processes (Cropanzano and
Greenberg, 1997). According to uncertainty management theory, justice is important
for people because justice judgments are an effective and readily available device for
handling various uncertain conditions (Van den Bos and Lind, 2002). Justice can
remove trust-related uncertainty and alleviate much of the discomfort that uncertainty
would otherwise generate. Accordingly, justice theory is a framework through which
to explain and understand individuals’ feelings of trust or mistrust more fully
(Saunders and Thornhill, 2003). This study proposes an extension of justice to
buyer-seller relationships in online shopping. The logic behind the proposed extension
is that as with organizational employment relationships, the online buyer-seller
relationship also involves information or power asymmetry, and thus online
transactions are also governed by justice. A vulnerable buyer, unable to avail him or Understanding
herself of traditional safeguards against seller opportunism, must rely on the powerful customers’
seller’s sense of justice and restraint to avoid mistreatment (Anderson and Weitz,
1989). Consequently, examining the impact of justice on customers’ trust in online satisfaction
vendors is the second objective of this research. In sum, this study complements the
updated IS success model with justice and trust perspectives, considering them more
comprehensive measures of online shopping satisfaction and repurchase intention in 481
an e-commerce context.
2. Theoretical background
2.1 IS success model and e-commerce
DeLone and McLean’s (1992) model of IS success is one of the widely used models for
explaining the impact of quality on individual’s satisfaction and use of IS. The IS
success model consists of six interrelated dimensions of success:
(1) system quality;
(2) information quality;
(3) use;
(4) user satisfaction;
(5) individual impact; and
(6) organizational impact.
The model posits that system quality and information quality, individually and jointly,
affect user satisfaction and system use. Additionally, system use affects user
satisfaction with the reverse being true. Based on their evaluation of some important
research on IS success of the last decade, DeLone and McLean (2003) proposed an
updated IS success model as a foundation for empirical e-commerce research. The
model adds service quality, intention to use, and net benefits.
While the updated IS success model is currently regarded as a major breakthrough
in this field, there are several challenges facing it as applied to e-commerce context. An
endeavor to refine and extend the updated IS success model in terms of the peculiar
nature of e-commerce is still needed (DeLone and McLean, 2004). Therefore, this study
attempts to illuminate the challenges and to develop the e-commerce success model.
First, service quality was added to the original IS success model to reflect the
importance of the services of the IS function. Service quality is commonly defined as
how well a delivered service level matches customer expectation. The SERVQUAL
instrument[2] (Parasuraman et al., 1988) has been widely tested as a means of
measuring customer perceptions of service quality. DeLone and McLean (2003)
adopted three dimensions of SERVQUAL (i.e. responsiveness, empathy, assurance) as
the metrics for the service quality construct. However, the SERVQUAL instrument
does not embrace the unique facets of e-commerce service quality (e.g. the interactions
between customers and the web sites). Therefore, Parasuraman et al. (2005) proposed
the E-S-QUAL scale and identified seven dimensions for assessing electronic service
quality[3]. Given the unique nature of e-commerce, the measures for service quality in
the e-commerce success model should adopt the E-S-QUAL scale, rather than the
SERVQUAL instrument.
INTR Second, the net benefits are the most important success measure as they capture the
21,4 balance of the positive and negative impacts of e-commerce on customers (DeLone and
McLean, 2003). DeLone and McLean (2004) identify improved customer experience,
entertainment, reduced shopping cost, and real-time marketing offers as individual
benefits from e-commerce. These are in line with recent online shopping research that
convenience, price savings, extensive information, enjoyment, and broad product
482 selection are considered as major benefits of online shopping (Childers et al., 2001). In
addition, according to DeLone and McLean (2003), use and user satisfaction will lead to
net benefits. If repurchase is to occur, it is assumed that the net benefits from the
perspective of the customer are positive, thus influencing re-purchase intention and
satisfaction. Therefore, this study reconciles the net benefits measures with the
e-commerce context and considers them as antecedents of repurchase intention and
satisfaction, instead of as dependent variable in the updated IS success model.
Third, the updated IS success model is originally developed in the traditional setting
where the level of uncertainty is lower than that in the online environment
(Grabner-Kraeuter, 2002) and does not involve trust construct based on that the need
for trust only arises in uncertain environments (Mayer et al., 1995). In e-commerce, the
transaction-specific uncertainty is elicited by an asymmetric distribution of
information between the transaction partners (Grabner-Kraeuter, 2002). Therefore,
two of the main obstacles to directly apply the updated IS success model to measure
e-commerce success are the lack of deliberating the inherent uncertainty of e-commerce
and the exclusion of other critical factors (e.g. trust). These difficulties, however, could
be alleviated by investigating IS success along with trust. Trust is especially critical in
online transaction because trust absorbs transaction-specific uncertainty through
mitigating the negative effect of perceived information asymmetry and the resulting
possibility of encountering opportunistic behavior (Pavlou et al., 2007).
Furthermore, two important deficiencies of the updated IS success model are that it
excludes justice theory as a basis for any of its scales and its incapability to deal with
the imbalance of power and information in online transaction settings. E-commerce has
been described as the conduct of business among consumers and e-businesses, which
enable them to exchange value electronically (e.g. money, goods, services, and
information). Given the hidden information and hidden action problems in the
e-commerce context (Pavlou et al., 2007), there are power and information asymmetries
between online buyers and sellers. Justice evaluations are more likely to arise in any
exchange of value (Adams, 1965) and in asymmetrical power relationships (Lind, 2001).
Consequently, justice should not be ignored due to its valuable framework for
explaining customers’ reactions to a variety of situations.
485
Figure 1.
E-commerce success
model
3.1 Satisfaction
According to Kolter (2000), satisfaction is an individual’s feelings of pleasure or
disappointment resulting from comparing the perceived performance (or outcomes) of
online shopping in relation to his or her expectations. Oliver (1980) theorizes that
satisfaction is positively associated with future intention, both directly and indirectly
via its impact on attitude. In the final step of satisfaction formation processes,
satisfaction determines intentions to patronize or not to patronize the store in the future
(Tsai and Huang, 2007). Therefore:
H1. Customers’ satisfaction positively affects their repurchase intentions.
3.6 Trust
487
Following Pavlou and Fygenson (2006), trust is defined as the buyer’s beliefs that
the seller will behave benevolently, capably, and ethically. According to TPB
(Ajzen, 1991), trust beliefs create favorable feelings toward the online vendor that
are likely to increase a customer’s intention to purchase products from the vendor.
Lack of trust prevents buyers from engaging in online shopping because they are
unlikely to transact with a vendor that fails to convey a sense of its trustworthiness,
mainly because of fears of seller opportunism (Hoffman et al., 1999). According to
Gefen et al. (2003), online customers in general will avoid purchasing from the
online vendor whom they do not trust, or they assume that the online vendor will
not be ethical and behave in a socially suitable manner (i.e. trust to be bad). Indeed,
prior research shows that trust plays a pivotal role in driving customer satisfaction
(Lin and Wang, 2006) and repurchase intention (Weisberg et al., 2011; Zboja and
Voorhees, 2006). Therefore:
H7. Customer trust in the online vendor positively affects customer satisfaction.
H8. Customer trust in the online vendor positively affects repurchase intention.
4. Research methodology
4.1. Measurement development
Measurement items were adapted from the literature wherever possible (see Appendix).
A small-scale pretest of the questionnaire was conducted using 20 graduate students
with online shopping experience to assess its logical consistencies, ease of
understanding, and contextual relevance. Finally, a large-scale pretest with 195
customers of the target online shopping store was also conducted to confirm the
measurement properties of the final items and provide preliminary evidence for the
proposed model. The results indicated that the measurement model fulfills the criteria of
reliability, convergent validity, and discriminant validity, with composite reliability
values ranging from 0.87 to 0.95, AVE ranging from 0.61 to 0.87, and factor loadings
ranging from 0.68 to 0.95. The results of the structural path analysis indicated that 9 of
11 hypotheses were supported. The relationship between service quality and satisfaction
ðH4; t ¼ 0:72Þ was insignificant, while the relationship between trust and repurchase
intention was marginal ðH8; t ¼ 1:82Þ:
Items for measuring three justice dimensions were adapted from Anderson and
Srinivasan (2003) and Folger and Konovsky (1989) to fit the context of online shopping.
Items for measuring trust were based on Gefen et al. (2003). Items for measuring three
quality dimensions were adapted from DeLone and McLean (2003), McKinney et al.
(2002), and Parasuraman et al. (2005). Among the seven dimensions of the E-S-QUAL
scale proposed by Parasuraman et al. (2005), efficiency and system availability,
however, could be classified into the measures of system quality in this e-commerce
success model; while fulfillment could be replaced by the measures of distributive
justice. Overall, this study retained responsiveness, contact, and privacy as the
measures of service quality and did not include the compensation measure because
very few customers had compensation experience. Items for measuring net benefits
were based on Anderson and Srinivasan (2003), Childers et al. (2001), DeLone and
McLean (2003), and Devaraj et al. (2002). Items for measuring satisfaction were adapted
from McKinney et al. (2002) and Oliver (1980). Repurchase intention was adapted from
Parasuraman et al. (2005) and Pavlou and Fygenson (2006). For all the measures, a
seven-point Likert scale was adopted with anchors ranging from strongly disagree (1) Understanding
to strongly agree (7).
customers’
4.2. Survey administration satisfaction
Given that our research aimed at understanding online customers’ satisfaction and
repurchase intentions, the research model was tested with data from PCHome’s online
shopping customers. PCHome was chosen because it is the most widely used online 489
shopping store in Taiwan. A banner with a hyperlink connecting to our web survey
was published on a number of bulletin board systems (BBS), chat rooms and virtual
communities and individuals with online shopping experience with PCHome were
cordially invited to support this survey. Given that the questionnaire items of service
quality and interactional justice constructs involved issues regarding interactions
with service representatives and problem handling such as product return, for survey
results to be valid, respondents had to experience online service and contact with
service representatives of PCHome to evaluate both constructs (so-called purposive
sampling or judgment sampling). In this sampling plan, sample elements were
selected because they are believed to be representatives of the population of interest
and were expected to serve the research purpose of our study (Churchill, 1991).
Therefore, in the demographic information of our survey web page, we required
respondents to indicate whether they had experience in contacting customer service
representatives and returning products. Initially, 2,072 online respondents voluntarily
completed the survey. Since very few respondents have experience in contacting
customer service representatives and returning products, after eliminating invalid
respondents (e.g. those without service representative contacting and product-return
experience), 219 valid ones remained for our data analysis. The promise of an
incentive significantly enhanced the probability that a respondent would more fully
complete the questionnaire and make fewer errors in the responses to survey
questions (Godwin, 1979). Only 50 respondents were randomly selected from these
219 valid ones due to our limited budget. Table I lists the demographic information of
the respondents.
DJ PJ IJ TR IQ SQ SEQ NB SA RI 491
DJ1 0.85 0.47 0.50 0.53 0.58 0.34 0.45 0.45 0.54 0.53
DJ2 0.86 0.54 0.63 0.67 0.65 0.50 0.58 0.61 0.66 0.64
DJ3 0.86 0.52 0.52 0.53 0.56 0.33 0.49 0.45 0.55 0.52
DJ4 0.78 0.52 0.50 0.48 0.48 0.30 0.46 0.36 0.54 0.47
DJ5 0.72 0.47 0.53 0.57 0.54 0.45 0.46 0.43 0.59 0.53
PJ1 0.51 0.87 0.68 0.71 0.53 0.48 0.74 0.49 0.65 0.57
PJ2 0.50 0.77 0.59 0.58 0.46 0.47 0.59 0.57 0.52 0.57
PJ3 0.53 0.85 0.61 0.65 0.52 0.46 0.62 0.48 0.62 0.58
PJ4 0.53 0.87 0.63 0.61 0.49 0.45 0.61 0.47 0.55 0.53
PJ5 0.51 0.80 0.56 0.56 0.44 0.39 0.51 0.37 0.50 0.43
IJ1 0.61 0.70 0.93 0.74 0.56 0.48 0.73 0.59 0.70 0.67
IJ2 0.62 0.68 0.94 0.76 0.60 0.48 0.74 0.66 0.72 0.71
IJ3 0.63 0.69 0.93 0.74 0.57 0.46 0.74 0.63 0.68 0.70
TR1 0.63 0.64 0.68 0.85 0.57 0.50 0.64 0.50 0.70 0.64
TR2 0.68 0.66 0.67 0.86 0.61 0.54 0.66 0.55 0.74 0.65
TR3 0.55 0.66 0.71 0.87 0.58 0.49 0.66 0.56 0.66 0.61
TR4 0.60 0.67 0.70 0.91 0.56 0.50 0.67 0.60 0.76 0.73
TR5 0.51 0.58 0.69 0.79 0.52 0.54 0.62 0.73 0.66 0.70
IQ1 0.47 0.38 0.49 0.47 0.75 0.46 0.43 0.57 0.50 0.48
IQ2 0.47 0.45 0.52 0.50 0.80 0.50 0.49 0.57 0.54 0.50
IQ3 0.60 0.50 0.53 0.61 0.80 0.48 0.54 0.48 0.60 0.51
IQ4 0.61 0.54 0.48 0.52 0.81 0.43 0.54 0.42 0.54 0.48
IQ5 0.54 0.44 0.38 0.48 0.74 0.37 0.35 0.42 0.53 0.44
SQ1 0.38 0.39 0.39 0.46 0.44 0.82 0.40 0.44 0.52 0.48
SQ2 0.38 0.42 0.42 0.48 0.48 0.85 0.47 0.51 0.54 0.48
SQ3 0.43 0.50 0.43 0.51 0.47 0.77 0.50 0.42 0.54 0.45
SQ4 0.41 0.47 0.44 0.52 0.48 0.89 0.49 0.49 0.58 0.56
SQ5 0.36 0.39 0.36 0.42 0.40 0.72 0.42 0.55 0.49 0.50
SQ6 0.36 0.44 0.41 0.48 0.50 0.76 0.52 0.51 0.51 0.47
SEQ1 0.41 0.46 0.54 0.52 0.40 0.49 0.75 0.58 0.51 0.52
SEQ2 0.56 0.71 0.72 0.67 0.56 0.45 0.87 0.55 0.64 0.60
SEQ3 0.56 0.56 0.65 0.62 0.51 0.48 0.78 0.44 0.56 0.51
SEQ4 0.39 0.65 0.60 0.61 0.45 0.46 0.80 0.46 0.52 0.48
NB1 0.48 0.49 0.55 0.58 0.50 0.50 0.50 0.79 0.55 0.67
NB2 0.40 0.43 0.50 0.50 0.45 0.43 0.45 0.81 0.53 0.56
NB3 0.49 0.51 0.59 0.58 0.56 0.54 0.53 0.85 0.68 0.70
NB4 0.47 0.42 0.51 0.53 0.53 0.45 0.49 0.84 0.60 0.69
NB5 0.48 0.45 0.56 0.58 0.49 0.52 0.57 0.74 0.55 0.55
SA1 0.66 0.61 0.70 0.75 0.63 0.59 0.64 0.68 0.92 0.84
SA2 0.65 0.63 0.71 0.78 0.65 0.64 0.67 0.70 0.94 0.80
SA3 0.67 0.66 0.65 0.74 0.65 0.59 0.63 0.64 0.90 0.75
SA4 0.66 0.62 0.71 0.77 0.64 0.62 0.65 0.66 0.92 0.79 Table III.
RI1 0.59 0.60 0.67 0.73 0.57 0.55 0.59 0.74 0.82 0.94 PLS confirmatory factor
RI2 0.58 0.56 0.67 0.71 0.56 0.59 0.59 0.72 0.77 0.93 analysis and
RI3 0.63 0.59 0.73 0.72 0.60 0.53 0.61 0.78 0.78 0.95 cross-loadings
INTR Discriminant validity was assessed by examining cross-loadings and the relationship
21,4 between correlations among constructs and the square root of AVEs (Fornell and
Larcker, 1981). An examination of cross-factor loadings (Table III) indicates good
discriminant validity, because the loading of each measurement item on its assigned
latent variable is larger than its loading on any other constructs. The other criterion is
that the square root of the AVE from the construct should be greater than the
492 correlation shared between the construct and other constructs in the model (Fornell and
Larcker, 1981). Table IV lists the correlations among the constructs, with the square
root of the AVE on the diagonal. All the diagonal values exceed the inter-construct
correlations, indicating satisfactory discriminant validity of all constructs. Therefore,
we conclude that the scales should have sufficient construct validity.
4.3.2 Structural model. In PLS analysis, examining the structural paths and the
R-square scores of endogenous variables assesses the explanatory power of a
structural model. The results of structural path analysis are depicted in Figure 2. Data
collected from 219 valid respondents provided support for all but one of eleven
hypotheses, exhibiting a p-value less than 0.05. The unsupported hypothesis, the
relationship between service quality and satisfaction (H4), was not significant at the
0.05 level. Tests of significance of all paths were performed using the bootstrap
DJ PJ IJ TR IQ SQ SEQ NB SA RI
DJ 0.82
PJ 0.62 0.84
IJ 0.66 0.74 0.93
TR 0.69 0.75 0.80 0.86
IQ 0.69 0.59 0.62 0.67 0.78
SQ 0.48 0.54 0.51 0.60 0.57 0.81
SEQ 0.60 0.74 0.79 0.76 0.61 0.58 0.80
Table IV. NB 0.58 0.57 0.67 0.69 0.63 0.61 0.63 0.81
AVE and correlation SA 0.71 0.69 0.75 0.83 0.70 0.66 0.70 0.72 0.92
among constructs RI 0.64 0.62 0.73 0.77 0.61 0.59 0.64 0.80 0.84 0.94
Figure 2.
SEM analysis of the
research model
resampling procedure. In addition, the model accounts for 72 to 79 percent of the Understanding
variance (R-square scores). Overall, the research model accounted for 79 percent of the customers’
variance of repurchase intention (Figure 2).
satisfaction
5. Discussion and implications
Drawing on the IS success model, trust, justice, management and marketing literature,
the study theoretically develops and empirically tests a model that explains and 493
predicts customers’ repurchase intentions toward online shopping.
Notes
1. www.comscore.com/press/release.asp?press ¼ 2658
2. The SERVQUAL instrument contains five dimensions: reliability, responsiveness, empathy,
assurance, and tangibility (Parasuraman et al., 1988).
3. These seven dimensions for assessing electronic service quality are efficiency, fulfillment,
system availability, privacy, responsiveness, compensation, and contact (Parasuraman et al.,
2005).
INTR 4. Justice can be considered as a set of fairness perceptions (Cropanzano and Greenberg, 1997).
Justice researchers generally have accepted the terms fairness and justice as
21,4 interchangeable, both implicitly and explicitly (e.g. Greenberg and Colquitt, 2005), and we
follow this tradition.
5. Percentage of respondents without contact and return experience: (2072 2 219)/2072 ¼ 89
percent; Percentage of respondents with contact and return experience: 219/2072 ¼ 11
496 percent
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Trust (TR)
TR1 Based on my experience with PChome in the past, I know it is honest.
TR2 Based on my experience with PChome in the past, I know it is not opportunistic.
TR3 Based on my experience with PChome in the past, I know it keeps its promises to
customers.
TR4 Based on my experience with PChome in the past, I know it is trustworthy.
TR5 Based on my experience with PChome in the past, I know it has the ability to
complete transactions.
Satisfaction (SA)
SA1 I like to purchase products from PChome.
SA2 I am pleased with the experience of purchasing products from PChome.
SA3 I think purchasing products from PChome is a good idea.
SA4 Overall, I am satisfied with the experience of purchasing products from PChome.