An Empirical model of Satisfaction, trust, and Repurchase intention in online shopping
Neeti Gupta
Senior Research Fellow, Himachal Pradesh Business School, Himachal Pradesh University, Himachal Pradesh.
*Corresponding Author E-mail: neetiguptanaag@gmail.com
ABSTRACT:
India is witnessing tremendous growth in the acceptance of online shopping among people. To harness this opportunity, it is important to understand and ensure repurchase intention among customers. Hence, this research article explored the mediating role of trust between satisfaction and repurchase intention in online shopping context. The conceptual repurchase model was developed and tested using SEM on empirical data of 562 online shoppers. Results showed significant influence of satisfaction on repurchase intention and a partial mediation effect of trust between satisfaction and repurchase intention. The predictive power of the research model increased from 58% to 64 % due to mediation. The findings suggested that making efforts to improve the feeling of satisfaction and building trust are two stepping stones to enhance repurchase intention among customers. The result of the present research can help online marketers in understanding the importance of trust along with satisfaction for ensuring continuation among old customers. Also, present research will make value addition in ever-increasing online marketing literature.
KEYWORDS: Satisfaction, trust, repurchase intention, online shopping.
1. INTRODUCTION:
In the era of information technology, the internet is used for almost every business activity. The online shopping phenomenon is one of them. Online shopping in India is burgeoning. Both national and international players are showing interest in selling online. On top of it, shoppers from small and big cities of India are equally attracted to buy online. Considering the scope of online retailing it can be compared to perfect competition as there is no exit or entry barrier. Moreover, due to transparent environment customers are fully aware of prices and availability of products.
According to Chandra (nd) report, the e-commerce market in India is set to grow at a CAGR of 30% for gross merchandise value to reach $ 200 billion by 2026 and predicted to have a market penetration of 12% compared to 2% currently. But, despite the increase in sales volume every year ensuring continuation among customers in an open and highly competitive online environment is the biggest challenge for online retailers. As argued by Reichheld and Schefter (2000) that the repurchase is extremely desirable given the comparatively high cost of acquiring new customers and the economic value of loyal customers. So, repurchase intention among consumer is extremely important to remain profitable in online retailing.
Need for studying the mediating role of trust to ensure repurchase intention arises as online shopping lacks personal touch. Moreover, many of the existing researches studied antecedents of satisfaction, trust and repurchase intention. But, given the importance of these three important variables there are not enough researches regarding their relationship and influence in light of the mediating effect of trust.
Consequently, the objective of this research is to empirically examine the mediating effect of trust on the relationship between satisfaction and repurchase intention in online shopping through a reconsideration of existing literature. The result of the present research will contribute to the existing online retailing literature and can be useful for online retailers to understand the respective importance of satisfaction, trust, and repurchase intention.
2. REVIEW OF THE LITERATURE:
Repurchase Intention:
Repurchase intention is an intention to continue using the online platform. The problem of customer repurchases faced by electronic-retailers is more serious due to fierce competition, transparency, and consumer empowerment. Risks of losing customers to competitors have shifted online retailers’ attention from inducing consumers to adopt their retailing website to motivate consumers to purchase repeatedly through them (Chiu et al., 2014). Li and Hong (2013) stated that repurchase intention is crucial in online shopping as it has more economic advantages towards the marketer than constantly seeking new customers to purchase. Similarly, Anderson and Srinivasan, 2003 stated that the value of loyal customers may be worth up to ten times as much as its average customer and bring many benefits to a seller. Reichheld and Schefter (2000) also indicated that the repurchase is extremely desirable given the comparatively high cost of acquiring new customers and the economic value of loyal customers. They suggested that encouraging repeat purchases among profitable customers’ companies can initiate a spiral of economic advantage.
Satisfaction:
Satisfaction is a favourable feeling of customers when performance exceeds expectations. In online shopping, satisfaction is a result of various stages passed by the customer before finally receiving the goods. In the study of Khalifa and Liu (2007) post-purchase experience, purchase experience, and pre-purchase experience all had a significant effect on online shopping satisfaction. Customer satisfaction is very important in the online environment as higher customer satisfaction can bring greater profits to the company. Moreover, it acts as a source of competitive edge in a highly competitive and transparent online environment. For satisfaction, the customer thinks that the decision to make purchases through online shopping is appropriate (Suhaily and Soelasih, 2017). The influence of satisfaction on attitude and purchase intention was studied by various authors in the past. It was emphasized in the literature that online retailers need to make efforts to satisfy their customers in the whole of the purchase process as customers are becoming more value-oriented.
Trust:
Trust plays a vital role in commercial activities that have a dependency exchange partner. Trust is a complex multidimensional construct which acts as a complexity reduction factor (Gefen, 2000). Trust gives the confidence to rely on an exchange partner. Moon and Kim (2001) defined trust as, “Consumer’s willingness to be vulnerable to the electronic commerce actions with an expectation that they will perform what is important to the customer.”
Trust is one of the most widely examined concepts in online marketing literature. Trust is also a crucial factor for any long-term business relationship as researchers such as Gefen (2000), Koufaris and Hampton-Sosa (2004), and Nunkoo et al. (2013) have suggested that lack of trust is a major hindrance in the online purchase. Lack of trust prevents buyers from engaging in e-shopping. Similarly, Hoffman et al. (1999) had stated that customers rarely engage in relationship exchanges with a vendor who fails to convey a sense of trustworthiness.
Satisfaction and Repurchase Intention:
Satisfaction is a crucial key to build a long-term relationship. Customer satisfaction in online shopping is a primary predictor of customer online purchase and repurchase intention (Azam et al., 2012). Yulisetiarini et al. (2017) stated that increasing customer satisfaction will also increase repurchase intention. Curtis et al. (2011) investigated the relationship between customer loyalty, repurchase/repurchase intent, and satisfaction to resolve the mixed views on these concepts using meta-analysis. Repurchase intent and satisfaction displayed strong positive relationships in the meta-analysis (0.63) as well as in moderator analyses. Similarly, Mosavi and Ghaedi (2012) study showed a positive impact of customer satisfaction on repurchase intention (0.29).
Previous studies suggested a positive influence of satisfaction on repurchase intention (Wen et al., 2011; Rose et al., 2012; Rezaei and Amin, 2013; Mpinganjira, 2014; Khan et al., 2015; Safa and Solms, 2016; Suhaily and Soelasih, 2017; Bao, 2015; Kim and Na, 2015; Chou et al., 2015; Ali, 2016; Li, 2016; Tatang and Mudiantono, 2017; Ashfaq et al., 2019., Hsu and Vui, 2019.
H1: There is significant positive influence of satisfaction on Repurchase Intention
Satisfaction and Trust:
Nguyen (2014) tested the relationship between customer satisfaction and trust, Pearson’s product-moment correlation coefficient showed r value 0.69, indicating a strong positive relationship. It was concluded that the customers will trust the online company substantially more if their level of satisfaction is higher. Likewise, Mosavi and Ghaedi (2012) study showed that customer satisfaction had the most impact on trust (0.33).
H2: There is significant positive influence of satisfaction on Trust
Trust and Repurchase Intention:
Previous studies have suggested that trust is positively related to repurchase intention though the difference was found in its effect on repurchase intentions. Trust was the most significant determinant of customer repurchasing behaviour in online shopping as increasing uncertainties will be caused by distance and other impersonal factors (Wen et al., 2011). Sullivan and Kim (2018) investigated the perceptions of online trust among online buyers and their willingness to repurchase from the same website. The findings showed that trust and e-commerce adoption components are critical in influencing repurchase intention.
A positive influence of trust on repurchase intention was statistically established in previous research conducted by Wen et al. (2011); Karami et al. (2012); Rose et al. (2012); Mosavi and Ghaedi (2012); Rezaei and Amin (2013); Moeeini and Fard (2014); Chou et al. (2015); Lee et al. (2016); Tatang and Mudiantono (2017); Omotayo and Adeyemi (2018); Hsu and Vui (2019). Trust leads to repurchase by customers and brings enormous benefits for companies (Safa and Solms, 2016). Therefore, based on research results Al-Maghrabi et al. (2011) suggested that managers should work to increase the level of trust to increase continuance intention, especially among old consumers.
H3: There is a significant influence of Trust on Repurchase Intention
Mediating Role of trust:
The relationship between variables under study and repurchase intention is not always straight forward. Trust is proved to be an important predictor of repurchase intention. Customer relationship varies with the firm depending on the level of trust. In the absence of trust, customers cannot be engaged and retained. Zboja and Voorhees (2006) research findings demonstrated that customer trust in a retailer mediates the effects of satisfaction on customer repurchase intentions. As suggested, in order to influence customers to return, a retailer must satisfy them and earn their trust. Su et al. (2009) found an indirect effect of trust on repurchase intention. Likewise, in the research conducted by Liang et al. (2018) trust was determined to be the mediator between transaction-based satisfaction and repurchase intention.
H4: Trust mediates the relationship between satisfaction and repurchase intention.
3. RESEARCH METHODOLOGY:
The objective of the research is to establish the mediating effect of trust between satisfaction and repurchase intention. The theoretical base of the present research is a stimulus-organism-response model based on cognitive psychology. This theory suggests that the organism mediates the relationship between the stimulus and the response. Trust is used as an organism, satisfaction as a stimulus and repurchase intention as a response.
Figure 1: Proposed Research Model
Cross-sectional quantitative causal research was adopted to meet the objective of the study. The target samples for the current research were online shoppers living in Shimla. Available literature in the form of newspapers, reports, and articles was used as a secondary source. Whereas, primary data is collected through a questionnaire. The questionnaire consisted of questions related to satisfaction, trust and repurchase intention on a five-point Likert scale adapted from prior researches. Questions related to trust were adapted from (Valvi and West (2013), Lee and Joshi (2007), and Kim et al. (2008), related to satisfaction were adapted from (Bhattacherjee, 2001; Valvi and West, 2013, and Lee and Joshi, 2007), and related to repurchase intention were adapted from (Kim et al., 2008, Bhattacherjee, 2001 and Liu et al., 2005).
Cronbach’s alpha method has been used to investigate the reliability of the questionnaire during the pilot study. Later while conducting confirmatory factor analysis reliability was examined using composite reliability as well as Cronbach’s alpha and construct validity was checked using convergent validity using individual loadings and Average Variance Extracted (AVE).
Data was collected using convenience sampling by sending the questionnaire link to the list of people collected from logistic partners of e-tailers in Shimla, Himachal Pradesh. Data was collected from 500 respondents. After screening, 452 responses were found complete in all respect and used for all the subsequent analysis. Data were analyzed using AMOS 16. The measurement model was conducted to ensure the model fit. Then path analysis was used to find the direct, indirect and total relationship of factors under the study.
4. RESULTS AND DATA ANALYSIS:
The mean score of satisfaction is 3.90, trust is 3.79 and repurchase intention is 3.97. The mean value of all the variables is above average. It is concluded that shoppers are satisfied with their decision to shop online, they show trust in online shopping and will continue with it.
The Cronbach’s alpha value for satisfaction (0.73), trust (0.80) and repurchase intention (0.83) were more than the recommended 0.7 during the pilot study conducted on 30 respondents. Validity and reliability are also confirmed while conducting CFA. Convergent validity is confirmed as individual values in the model are higher than cut off of 0.7 (Figure 2) and values of AVE (Table 1) substantially exceeded the recommended level of 0.5 as recommended by Hair et al. 2014. The reliability of the scale is confirmed as values of composite reliability and Cronbach’s alpha are more than recommended cut off 0.7.
Table 1: Reliability and Validity
|
Factors |
Composite Reliability |
Cronbach’s Alpha |
AVE |
|
Satisfaction |
.87 |
.86 |
0.57 |
|
Trust |
.83 |
.81 |
0.55 |
|
Repurchase Intention (RPI) |
.86 |
.87 |
0.61 |
Measurement Model:
In present research value of Chi-square is 1.651, which is statistically significant. It is in line with criteria suggested by researcher Kenny (2015) that model with cases 400 or more, the chi-square is always statistically significant. Similarly, the value of relative chi-square is also below the recommended value 2 by Kline (1998).
Table 2: Result of Goodness and Badness of Fit Indices
|
Indices |
Cut-off |
Model Values |
Results |
|
Relative chi-square |
≤ 3 |
1.205 |
Pass |
|
RMR |
≤ .8 |
.021 |
Pass |
|
GFI |
≥ .90 |
.967 |
Pass |
|
AGFI |
≥ .80 |
.951 |
Pass |
|
NFI |
≥ .90 |
.966 |
Pass |
|
RFI |
≥ .90 |
.957 |
Pass |
|
IFI |
≥ .90 |
.986 |
Pass |
|
TIL |
≥ .90 |
.983 |
Pass |
|
CFI |
≥ .90 |
.986 |
Pass |
|
RMSEA |
≤ .05 |
.038 |
Pass |
Source: Primary data
The dependent, mediator and independent items and variables are examined on the measurement model. The fit indexes presented in Table 2 are within the accepted thresholds. The analytical results demonstrated a good fit. Therefore, the research model and hypothesis are tested using a structural equation model.
The mediation effect of trust between satisfaction and RPI is checked according to Baron and Kenny (1986)29 approach. According to this approach following three conditions to be met to conduct the mediation effect:
· An effect of the dependent variable on the independent variable should be significant.
· An effect of the dependent variable on the mediating variable should be significant.
· An effect of the mediating variable and the independent variable should be significant.
The bootstrapping method is used to find the total, direct and indirect effect of trust as a mediator on satisfaction and RPI. Data was bootstrapped for 2000 samples at a 95% significance level.
Figure 2: Measurement model of satisfaction, trust and repurchase intention
Source: Primary Data
Direct effect of satisfaction on Repurchase Intention (RPI):
It is observed (Figure 3) that standardized estimates of satisfaction (β=.762, S.E.=.051, C.R.= 13.008, p=***, p < 0.05) is significant at 1% level. Supporting hypothesis H1. It is concluded from the result that there is a significant positive influence of satisfaction on RPI without mediation. The model explains a 58% variance in RPI due to satisfaction.
Table 3: Direct Effects of Research Model
|
|
|||||
|
Before Mediation |
Estimates |
S.E |
C.R |
p-value |
Result |
|
RPI ← Satisfaction |
0.762 |
0.051 |
13.008 |
*** |
Accepted |
|
After Mediation |
|||||
|
RPI ← Satisfaction |
0.573 |
0.055 |
9.113 |
*** |
Accepted |
|
Trust ← Satisfaction |
0.633 |
0.051 |
10.814 |
*** |
Accepted |
|
RPI← Trust |
0.300 |
0.060 |
5.070 |
*** |
Accepted |
Source: Primary Data
The direct effect of satisfaction on trust is (β=.633 S.E.=.051, C.R.= 10.814) and trust on RPI is (β=.300, S.E.=.060 C.R.= 5.070) with p-value *** (p < 0.05) are significant at 1% level (Figure 4). Therefore, H2 and H3 is accepted. It is concluded that there is a significant influence of satisfaction on trust and trust on RPI.
Figure 3: Direct relationship between satisfaction and repurchase intention
Source: Primary Data
Figure 4: Mediation effect of trust between satisfaction and repurchase intention
Source: Primary Data
Table 4: Path Analysis
|
Hypothesis |
Exogenous |
Mediator |
Endogenous |
Direct effect |
Indirect Effect |
Total Effect |
Result |
|
H4 |
Satisfaction |
Trust |
RPI |
0.573 |
0.190 |
0.763 |
Partial Mediation |
Source: Primary Data
The direct influence of satisfaction on RPI when trust is used as a mediator is (β=.573, S.E.=.055, C.R.= 9.113) with p-value *** (p < 0.05). Direct effect of satisfaction on RPI is reduced from β=.762 to .573 but still significant at 1% level. The standardized indirect effect of satisfaction on RPI through trust is β=.190 with p-value =*** (p < 0.05) which is significant at 1% level. Results (Table 3) support significance of both direct and indirect effect.
Therefore, hypothesis H4 is accepted and it is concluded that the effect of satisfaction on RPI is partially mediated through trust. Paths analysis (Table 4) shows .57 direct effect of satisfaction on RPI and .190 (.63*.30) indirect effect through trust. Total effect of satisfaction on RPI when trust is used as a mediator is .793 which is almost equal to direct effect of satisfaction on RPI (.792) without mediation. But after mediation, the model explains 64% variance in RPI which was 58% before mediation. It means the influence of satisfaction on RPI is increased by 6% if trust factor intervenes between satisfaction and RPI.
5. DISCUSSION:
The present study tried to examine the mediating effect of trust on the relationship between satisfaction and RPI. Research hypothesis H1, which asserted that there is a significant positive influence of satisfaction on repurchase intention, was accepted statistically with a beta value 0.762. Result is in line with previous studies of Wen et al., 2011; Rose et al., 2012; Rezaei and Amin, 201390; Mpinganjira, 2014; Khan et al., 2015; Safa and Solms, 2016; Suhaily and Soelasih, 2017; Bao, 2015; Kim and Na, 2015; Chou et al., 2015; Ali, 2016; Li, 2016; Tatang and Mudiantono, 2017; Ashfaq et al., 2019; and Hsu andVui, 2019 which suggested a positive influence of satisfaction on repurchase intention.
Research hypothesis H2, which posited that there is a significant positive influence of satisfaction on trust, was statistically accepted. A significant positive influence of satisfaction on trust is established in the research of Mosavi and Ghaedi (2012). The positive relationship between both the variables was also well established in the research result of Nguyen (2014).
Research H3, which asserted that there is a significant positive influence of trust on repurchase intention, was found to be statistically significant. This present result is in alignement with the findings of Wen et al. (2011); Karami et al. (2012); Rose et al. (2012); Mosavi and Ghaedi (2012); Rezaei and Amin (2013); Moeeini and Fard (2014); Chou et al. (2015); Lee et al. (2016); Tatang and Mudiantono (2017); Omotayo and Adeyemi (2018); Hsu andVui (2019) which suggested that trust leads to repurchase intention.
Hypothesis H4, which argued that there, is a mediation effect of trust between satisfaction and repurchase intention was statistically accepted. Partial mediation through the trust was statistically established in the present research results. The repurchase model with mediation explained 64% variation which was 58% before mediation. Trust is proved to be an important mediator between satisfaction and RPI. The present result is supported by the research of Zboja and Voorhees (2006) which demonstrated that customer trust in a retailer mediates the effects of satisfaction on customer repurchase intentions. Similarly, Su et al. (2009) found an indirect effect of trust on repurchase intention and Liang et al (2018) research statistically proved trust to be the mediator between transaction-based satisfaction and repurchase intention.
6. IMPLICATION:
Online shopping is impersonal with different touchpoints therefore based on current research findings it is suggested to the marketers to improve both satisfaction and trust to attract customers to purchase again and again. The present study also extends current knowledge related to the interrelationship between satisfaction and repurchase intention with a mediation effect of trust.
7. LIMITATION AND DIRECTION FOR FUTURE RESEARCH:
The limitation of this paper is that it is focused on satisfaction and trust only. So, in future attitude, commitment, loyalty, and external factors like subjective norms should be added to the current repurchase model. The second limitation is the general nature of the present research. To overcome this, a future study must be conducted on a specific online retailer or a specific type of product. Lastly, research is conducted about goods only. So, future research can be extended to the service sector.
8. CONCLUSION:
The finding of this study confirmed the statistical significance of all the four hypotheses. A significant effect of satisfaction and trust on repurchase intention was statistically established. The result of the present research also proved that trust plays a partially mediating role between satisfaction and repurchase intention. Researcher suggested that the formation of repurchase intention among customers is attributed to a satisfying experience. But if along with satisfaction, customer trust online retailer, customers repurchase intention tends to increase. Hence, the researcher concludes that satisfaction and trust are crucial factors for ensuring and enhancing repurchase intention among shoppers. Moreover, trust plays an important role in increasing repurchase intention among satisfied customers.
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Received on 13.01.2020 Modified on 11.02.2020
Accepted on 02.03.2020 ©AandV Publications All right reserved
Asian Journal of Management. 2020;11(2):167-173.
DOI: 10.5958/2321-5763.2020.00026.8