INERTIA AND ONLINE TRUST LEADING FACTORS AFFECTING CONSUMER REPEAT-PURCHASE INTENTION IN E-COMMERCE (MODERATING ROLE OF ALTERNATIVE ATTRACTION)

Omar Masood^*

Director, Quaid-i-Azam School of Management Sciences,Quaid-i-Azam University, Islamabad, 45320, Pakistan, Tel: 9034159091; Email: masood_omar@hotmail.com

Kiran Javaria

Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad, 45320, Pakistan

*Corresponding Author:

Mahmood A Awan
Director, Quaid-i-Azam School of Management Sciences
Quaid-i-Azam University, Islamabad, 45320, Pakistan
Tel: 9034159091
Email: masood_omar@hotmail.com

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Abstract

The explosion of E-commerce activities required academia and industry to recognize the key factors of customer online repurchase intention. The purpose of this study is to determine the primary drivers of customer repeat-purchase intention in the aspects of trust and inertia. The study proposed an integrated model of online repeat-purchase intention. With the prevalence of internet, there is an interactive relationship build between consumer and online channels and now it has been paid much attention by practitioners and researchers. In E-Commerce, Online shopping is the innovation which comes through internet and online shopper repeat purchase intention is affected by many factors like; consumer inertia and online trust. Managers and Academics know fairly little about how the collective effect of consumer inertia and online trust affects the repeat-purchase intention. Based on the perspective of Theory of Reasoned Action (TRA) and PPM Model, the aim of study is to explore the relationship between consumer inertia, online trust and repeat-purchase intention in E-Commerce world. The moderating role of alternative attraction is also analyzed in the study and for the collection of data, survey analysis is conducted. Sample of study is 4100 customers of major cities of Pakistan (Rawalpindi, Islamabad, Lahore, Peshawar, Karachi, Quetta). This study found a result which is somewhat consistent with literature. Overall, it is concluded that consumer inertia and online trust has significant impact on consumer repeat purchase intention. Along with this, it is originating that alternative attraction moderates this relationship. Finding of this research will enable to suggest the website operators regarding management of different strategies for online consumer. Limitation, practical implication and future direction are provided at the end of this study.

Keywords

Online Trust; Consumer Inertia; Repeat-Purchase Intention; Alternative Attraction; E-Commerce

Introduction

E-commerce websites have changed the way of consumer purchases; it has become a new medium for businesses. Gradually, more consumers get started to purchase the product and services from E-commerce website, instead of going to any physical store. As compared to the traditional face-to-face mode of commerce, the online mode offers unique advantages, such as; plenty of available products, extensive selection and many more. The E-tailers face competition in the market due to the increasing online shopping website. The competition has remarkably increased for the last couple of years in Pakistan, like there are different online websites in Pakistan i.e. Daraz.pk, iShopping.pk, Kaymu etc. Now, customers are not bond on one point; their intention varies day by day. It is important for the E-tailers to maintain customer repurchases intention and sustain operations in order to gain competitive advantage in the market [1]. A number of studies argued that the most important factor of online shoppers repeated purchase intention is online trust [2,3]. Inertia helps the consumer to evade dealing with unknown and unfamiliar provider. In high level of inertia consumers stick to their current service providers which ultimately lead them to make repeated purchase intention decision [4]. In businesses there are competitive environment; sometimes, customers prefer to buy from the store which appears more attractive so their switching cost becomes high which is insignificant in online shopping context. Just one click of a mouse and customer can easily switch service provider. For that reason this study uses the variable alternative attraction which negatively moderates the relationship between consumer inertia and repeated purchases intention as well as between customer online trust and repeat purchase intention [1].

The motivation behind this research is; small but growing literature regarding inertia is available. Consumer Inertia and online trust have tendency to influence the Repeat-purchase intention of customer. This study contributes to the literature on consumer inertia, as it affects the repeat purchase intention by using a larger sample of consumer over a significant amount of time. Researcher collected dataset from 4100 consumers of online shopping websites in 2016. The aim of this research was to investigate the impact of Online Trust and Inertia on Customer Repeat-Purchase intentions in Pakistani context. The other objective was to analyze that whether female online shoppers are more attracted toward alternative offers than male online shoppers. The previous studies from online shopping context concentrate on consumer trust level which affects their repeat-purchases; very little literature focused on combine significant impact of consumer trust and inertia. There is difference between Asian and Western online shopper’s attitude. So, this study will contribute to explore the relationship in Pakistani context. This study will help the online website operator to increase consumer repurchases by providing them good purchase experience in order to develop online trust and inertia.

The paper is divided into four headings. Second heading will give the literature review which explains theoretical background and relationship analysis of factor affecting consumer repeat-purchases and it also explains a dummy gender effect on the relationship. Third heading demonstrates the research methodology of the paper. Fourth heading section will give research analysis and findings and fifth heading section finally concludes with short recommendation and practical implication of the research.

Theoretical Background

Push and Pull Mooring effects Model and the Theory of Reasoned Action has been used as a theoretical base for the present study. In 1885, Ravenstein [5] examined that the migration of human is influenced by push-pull effects [6,7]. This model explains that the migration of human is a result of interaction between push effect and pull effect, where push effect at the original place and pull effect at the place of destination. The PPM model properly identifies factors that cause pull, push or mooring effect in human migration or switching process. This study is also supported by push and pull mooring effect model. Bansal stated that in push-pull paradigm model, “attractive factors of alternative at the destination place pull the migrant to this destination” referring studies of [8] and [9] as example of human migration research [7]. Then another theory which supports this concept is the Theory of Reasoned Action which influences the attitude of customer and was developed by Ajzen et al. [10]. Reasoned action is concerned with behavior intention which means that our all actions are depending upon some reason. The theory supports that customer behavioral intention is depending upon the customer attitude and its subjective norms. This study is also supported by the Reasoned Action Theory that our behavior is based on norms and attitudes and our attitude or actions are based on some reason. When Organization increases their customer trust level by providing them good past experience, their behavioral intention will increase to repurchase the product.

Relationship Analysis

Influence of Consumer Inertia on Repeat-Purchase Intention

There are various researchers who documented inertia as a choice of brand, basically it is a form of determination in which consumers have a higher level of probability of choosing a product or service from which they have a higher level of familiarity or which they have purchased in the past [11]. Olsen explains; that inertia directs the consumer to make their intention to buy product without much consideration [12]. It inclines the consumer to re-patronize the product. According to Roos [13], inertia can be regarded as a pulling factor, as it pulls the customers to increase their repeat purchases [13]. Without inertia consumer may switch from one service provider to the other. Consumers who have a high level of inertia automatically attach to their current service provider and make their repurchase decision in a less conscious manner [4]. Saqib [14] found that there is a positive relationship between consumer inertia and repeat-purchase intention of consumer [14]. According to Kou female online shopper has higher level of inertia which ultimately leads them to increase their repeat purchase intention [1]. So, this study suggests that there is a direct or positive relationship between Consumer Inertia and repeat purchase intention and female online shopper has greater impact on consumer inertia than male.

H1: Female has more influence on positive impact of Consumer Inertia on Repeat-Purchase Intention as compare to Male.

Influence of Online Trust on Repeat-purchase Intention

In today’s e-commerce transactions, consumers follow some cognitive paths in order to minimize the uncertainty and complexity. An effective shortcut in this context is trust [15] and it is considerable aspect affecting shopping intention [16]. Trust is crucial not only in the traditional environment of shopping [17], but also in the context of online shopping. In online shopping, trust plays a vital role because it increases customer intention of internet shopping and it also helps the consumer evade seller possible opportunist behavior [18]. According to the Planned Behavior Theory, online website which consumer perceived less risky or on which consumer has had trust, they may be more willing to shop from this online store. Or simply they may not want to shop from more risky online store [19]. So when trust increases a risk perception decreases and it directly or indirectly exhibits a positive effect on internet shopping [20]. Jarvenpaa [19] examined that consumer willingness to buy is depending upon his positive or negative attitude towards online websites [19]. Rodgers et al. [21] stated that women are less satisfied with experience of online shopping than men. Therefore this study suggests that there is direct or positive relationship between online trust and repeat purchase intention; female trust level becomes low in online shopping context than male.

H2: Male has more influence on the positive impact of Online Trust on Repeat-Purchase Intention as compare to Female.

Moderating Role of Alternative Attraction

Consumers switch the previous stores or they are attracted toward alternative attraction when other stores offer them higher quality products on lower prices or more attractive product than the store they mostly visit [22]. Issac Newton proposes “Law of Inertia”, it also has marketing implication. Consumers will stay with their current service provider or etailer as long as no other force compels them to change. If consumers have high level of inertia they will be unwilling to change their current service provider though the alternatives are offering them more attractive products. [23]. Such highly competitive market offers various alternatives to the customers; so the customers can easily switch to one product from another [24,25]. Alternative attraction may weaken customer repurchase intention based on consumer inertia and online trust and further motivate customers to switch to other more attractive stores [22]. According to Kou, female online shoppers are attracted toward the different offers offered by various alternatives; that will lead them toward decrease in their inertia and repeat-purchase intention [1]. Therefore this study proposes that alternative attraction negatively moderates the relationship between online trust and consumer inertia and female shoppers are mostly attracted toward different alternative attractive offers.

H3: Female has more influence on the positive impact of Consumer Inertia on Repeat- Purchase Intention with negative moderating role of Alternative Attraction as compare to Male.

H4: Female has more influence on the positive impact of Online Trust on Repeat-Purchase Intention with negative moderating role of Alternative Attraction as compare to Male.

On the bases of literature Model and theory a frame-work is developed which shows that Consumer Inertia and online trust of customer are independent variables; Repeat- Purchase Intention of Customer is dependent variable and Alternative Attraction moderates this relationship (Figure 1).

Methodology

Statistical Tools

This study is quantitative based study. According to Tharenou [26] to get reliable and accurate results quantitative approach is an appropriate method, so for this study quantitative approach is being selected to get accurate and reliable results. Due to time constraint, it was not possible to access all online website customers so Non-Probability Sampling technique is used in this study and convenience sampling from non-probability sampling technique is used (Table 1). This is the advantage of Convenience sampling technique that timely and cost effective manner data is collected. Those customers were selected as participants of this study who were accessible easily and those who were willing to be the part of this study. Reliability Analysis Shows that all items are Consistent and reliable in nature. Here all variable Cronbach’s Alpha value is greater than 0.6 which shows that all items are reliable. All variables skewness and kurtosis value lies between -3 to +3 and -10 to +10 respectively, which shows that data is normally distributed.

Table 1: Demographic profile of sample.

In sample of this study, majority of Customers are male. There were 55% male and 45% female customer. Most of customers belonged to age group of 21-30 years. Most customers preferred to use the website Daraz.pk as its percentage was 34%. Most respondent had family monthly income of above 45000 and its percentage is 38% which was higher than others.

Data

The data used in this study was collected from 4100 consumers of major cities of Pakistan (Rawalpindi, Islamabad, Lahore, Peshawar, Karachi, and Quetta). Ramamurthy describes that primary data sources provide efficient information, and the researcher becomes able to examine different and new updated information [27]. Therefore, primary data collection method was used for this study. The online shoppers (Males & Females) of Pakistan were the population of this research so unit of analysis for this research was online customer. The sample of this study was Customers of famous online websites like iShopping.pk, Kaymu.pk, Alibaba.com and Daraz.pk of Pakistan major cities. The total sample size was 4100 individuals. The collective data was assembled by combining the datasets from the entire consumer. The Regression analysis was performed on this collective data to find the outcome which will be mentioned in the next section. The R-square mean technique was also used on the dataset.

Analysis of Research

Regression Analysis

At first, the Pearson Product Moment Analysis was conducted to find the two variables dependency on each other (Table 2). Sharma stated that the basic purpose of correlation index is to examine the strength of relationship between variables [28].

Table 2: Correlation analysis.

The correlation between all variables is less than 0.8 which depicting that there is no higher correlation between variables means variables act independently and there is no issue of co-linearity exists (Table 3). After examining the relationship through correlation analysis between the variables, Regression analysis is conducted to determine the relationship between Consumer Inertia, Online Trust and Repeat-Purchase Intention and also find the impact of Alternative Attraction that whether Alternative Attraction moderates the relationship of independent and dependent variable.

Table 3: Regression analysis.

In this study, the value of adjusted R square in Model 1 is .597 which means that 59% change in Repeat-Purchase Intention is because of independent variables i.e. Consumer Inertia, Online Trust. The value of adjusted R square in Model 2 is 0.629 which means that 62% change in Repeat-Purchase Intention because of independent variables in the presence of alternative attraction (moderator).

Un-standardized and standardize value of consumer inertia, online trust and alternative attraction are 0.466, 0.336 and -0.064 respectively. Beta value of consumer inertia is greater than other variables so it shows that consumer inertia has greater impact on repeat-purchase intention than online trust and alternative attraction. Consumer inertia and online trust significant value was 0.000 which is less than 0.01 (p<0.01, sig at 99%). And t value shows that there has positive relationship between variables. Hence H1 and H2 are accepted as consumer inertia and online trust has positive impact on repeat-purchase intention. Un-standardized and standardized value of interactionCI_AA is 0.133 and 0.134 respectively, which shows small impact. t value of interaction is 2.983 which is positive and significant value is 0.003 which is less than all levels so alternative attraction has significant but positive impact on consumer inertia and repeat-purchase intention relationship; hypothesis H3 is rejected because it shows that alternative attraction has negative impact on relationship. Un-standardized and standardized values of interactionOT_AA were -0.227 and -0.238 respectively, which shows alternative attraction has moderate impact on relationship. t value of interaction is -5.273 which is negative and significant value is 0.000 which is less than all levels so alternative attraction has significant and negative impact on online trust and repeat-purchase intention relationship ; hypothesis H4 is accepted because it shows that alternative attraction has negative impact on relationship. Dummy Gender variable significant value is 0.137 which shows that dummy gender is insignificant. So there is no impact of dummy gender on relationship.

Discussion

This study has been conducted to explore the relationship between inertia, trust and repeat-purchase intention of customer and also explain that whether alternative attraction moderates the relationship or not. Based on previous frameworks and theories, this study has developed a combined model of consumer trust and inertia in the context of Internet shopping. The findings and literature of this study provides evidence that a consumer’s trust and inertia strongly affects the consumer’s perception of repurchases and increases the consumer’s purchase intention. Literature of study has suggested that gender has effect on this relationship as popcorn & Marigold demonstrated that female outnumber the male online shoppers and he also asserts that 80 percent of buying decisions are made or dominated by women’s [29]. Conversely Rodgers et al. [21] that women are less satisfied with experience of online shopping than male, simply female trust level becomes low in online shopping context than male but the results of this study contradict with literature, results reveal that gender has no influence on consumer inertia, trust and repeat-purchase intention relationship [21]. Whether customer is male or female it has no impact on its trust and inertia level. Lee et al. [30] reviewed that consumer with the high level of inertia are satisfied with their service provider and have a high level of trust and may willingly and non-begrudgingly accept the switching cost [30]. Online vendor can feel self-assured that their satisfied and high-inertia consumer will not penalise them by attracting toward alternative offers or by switching from their current services. Support for this argument also comes from the study of telephone subscribers and they avow that consumer evade dealing with unknown service provider because of risky environment, they do not want to make a mistake so they stick to one service provider with high level of inertia [31]. Consistent with these insights, Gefen et al. [18] that, in online shopping trust and inertia plays a vital role because it increases customer intention of internet shopping and it also helps the consumer evade seller possible opportunist behavior.

Literature suggests that an alternative negatively moderates the relationship of consumer inertia and repeat purchases of consumer but result of the study contradicts with literature; it reveals that alternative attraction positively moderates this relationship; it means whether alternative offers different products to inert consumer but they do not switch to existing product. Their inertia level becomes high when alternative attracts them toward different offers. On the other hand, literature has suggested that alternative attraction negatively moderates the relationship of online trust and repeat-purchase intention and results of study support this concept that when alternative offers different attractive products to customer they switch from their current service provider and move toward alternative offers. Literature supports the concept that online trust and inertia has positive impact on repeat-purchase intention. The collective finding of this study has revealed that without considering the level of consumer trust and inertia, studies may fail to provide complete picture of consumer repurchasing and switching behaviour.

Conclusion

The aim of this study is to find the relationship between consumer inertia, online trust and repeat-purchase intention in e-commerce world. The result of this study is somewhat consistent with literature. Researcher use primary data as for the collection of questionnaire. The sample of this study is online website users of major cities of Pakistan (Rawalpindi, Islamabad, Lahore, Peshawar, Karachi, and Quetta). There have been four hypotheses and three are accepted. At the same time a small but growing literature appears to provide support for these hypotheses. In a Nutshell, it is stated that inertia and trust independently affect repeat-purchase intention and alternative attraction positively moderates the consumer inertia and negatively moderates the online trust and repeat-purchase intention relationship. From a practical standpoint, the study results show that trust and inertia is the strongest predictor of consumer repeat-purchase intention. Thus online retailers should put more emphasis on consumer trust and inert relationship. Study results shows that online trust and inertia is affected by alternative (competitors) offers so it is important for online vender focus on their consumer, to make them satisfied through initiatives such as; better customer services, immediately take action on their complaints, direct and favourable comparisons to competing brands and also highlighting the advantages that accompany switching costs.

As per our knowledge, many studies have been conducted on trust and inertia but this study is significantly different from previous studies because of its data variation i.e. data collected from different cities of Pakistan. Different cities people have different views regarding online shopping. This study also contributes to the literature on consumer inertia by using a larger sample of 4100 consumer over a significant amount of time. The previous studies from online shopping context concentrate on consumer trust level which affects their repeat-purchases; very little literature focused on combine significant impact of consumer trust and inertia. Distinctiveness in this research is various factors acknowledgment which affects the repeat-purchase intention in different ways. There is difference between Asian and Western online shopper’s attitude. So, this study will contribute to explore the relationship in Pakistani context and to find an Asian people attitude toward online shopping. This study is different from other studies because of its contribution in literature, selected population and used variables so it is unique in nature.

Future Direct

In future, in order to get the deeper understanding of trust formation and customer repeat-purchase intention, the more comprehensive model should be developed. In future the model can be extended to include the components of inertia. Since the role of inert-indifference and inert-satisfied consumer in explaining the customer repeat-purchase intention has rarely been studied, it will be a remarkable extension of this research.

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