Understanding online B-to-C relationships: An integrated model of privacy concerns, trust, and commitment

Transcription

1 Journal of Business Research 59 (2006) Understanding online B-to-C relationships: An integrated model of privacy concerns, trust, and commitment Mary Ann Eastlick a, *, Sherry L. Lotz a, Patricia Warrington b a Division of Retailing and Consumer Sciences, The University of Arizona, United States b Consumer Sciences and Retailing, Purdue University, United States Received 3 November 2003; accepted 13 February 2006 Abstract An integrative framework from information privacy and relationship marketing arenas was employed to investigate whether a traditional business-to-business relationship marketing framework could be applied to the information-intensive online business-to-consumer channel. Roles of consumers' privacy concerns and perceived e-tailer's reputation on their trust in, commitment toward, and purchase intent toward a services e-tailer were examined. Effects of opt-in versus opt-out choice strategies on consumers' privacy concerns and trust were also studied. Results showed that the strongest relationships leading to online purchase intent were those between trust in and commitment toward an e-tailer and between firm reputation and trust. Privacy concerns influenced purchase intent with strong negative effects, both directly and indirectly through trust. No difference was observed in respective direct effects of choice strategy on privacy concerns, nor were strategies found to moderate reputation on privacy concerns or trust. Managerial implications are discussed Elsevier Inc. All rights reserved. Keywords: Services retailing; Online retailing; Consumer; Trust; Privacy concerns 1. Introduction and study objectives Interactive electronic commerce via the Internet has become an important retail channel for consumers. Given its special environment, Internet retailers (e.g., e-tailers, online retailers) may face a double-edged sword in their quest to use marketplace information to build relationships with consumers. Interactivity, a potential bridge to maintaining relationships, enables online marketers to communicate one-on-one and, in doing so, collect transactional and other personal information that can later be used to precisely target offers to specific consumers (Blattberg and Deighton, 1991). On the contrary, consumers' privacy concerns about the loss of control over their information may weaken relationships and, ultimately, affect whether consumers will purchase online (Parasuraman and Zinkhan, 2002). * Corresponding author. Division of Retailing and Consumer Sciences, P.O. Box , The University of Arizona, Tucson, AZ , United States. Tel.: ; fax: address: eastlick@u.arizona.edu (M.A. Eastlick). Because most that is known about online business-toconsumer (B-to-C) relationships has been observed by practitioners and/or examined through descriptive research, there is limited empirical, theoretical knowledge about factors that contribute to, and deter from, building and maintaining these relationships. Accordingly, Parasuraman and Zinkhan (2002) have highlighted the need for theory-based research in this area. Due to similar, yet diverse, characteristics (e.g., dimensions of service quality, levels of interactivity) of online and offline settings, some scholars question whether empirical knowledge from the traditional marketplace also applies to online B-to-C relationships (Parasuraman and Zinkhan, 2002; Zeithaml et al., 2002). Others call for research to examine whether firm-related strategies (e.g., differential efficacy of information choice strategies, firm reputation) impact relationships with online consumers (Rust et al., 2002). Preliminary evidence suggests that some knowledge from the business-to-business (B-to-B) literature may be applicable to the B-to-C context. Thus, the Commitment Trust Theory of Relationship Marketing (Morgan and Hunt, 1994), a widely accepted B-to-B relationship marketing paradigm, may provide some /$ - see front matter 2006 Elsevier Inc. All rights reserved. doi: /j.jbusres

2 878 M.A. Eastlick et al. / Journal of Business Research 59 (2006) Fig. 1. Research model. theoretical guidance for examining B-to-C relationships. It proposes that trust and commitment are central mediating agents of successful B-to-B relationships. Opportunistic behaviors, communication, shared values, relationship benefits, and transaction costs perceived by relationship partners are factors influencing trust, commitment, or both. The impact of one or more of these factors on trust and commitment can create a variety of relationship outcomes (e.g., propensity to leave relationship, cooperation). Given the paucity of knowledge and questions to be examined, this research uses an integrated model derived from the Commitment Trust Theory (Morgan and Hunt, 1994) and the privacy concerns literature (Milne and Boza, 1998) to address three objectives in the context of a B-to-C services e-tailer. The services context is used because past research indicates that consumers rely heavily on cues to assess services (Berry, 1980). One study objective is to examine the role of privacy concerns on factors that may contribute to B-to-C relationships. A second objective is to empirically test the supposition that trust and commitment play key roles affecting online purchase intent in a B-to-C environment. A third objective of the study is to investigate firm-related factors that potentially may strengthen B- to-c relationships and mitigate consumers' privacy concerns. 2. Background The research model used for the study is shown in Fig. 1. Among hypothesized relationships, it is predicted that consumers' privacy concerns regarding use of their personal information by an e-tailer will impact their online purchase intent directly and indirectly through trust in and commitment toward the e-tailer. Consistent with B-to-B relationship models, it is also predicted that consumers' trust in an e-tailer will directly influence their commitment toward that e-tailer, which, in turn, will directly affect consumers' purchase intent. Lastly, perceptions of the e-tailer's reputation is proposed to directly influence both trust and privacy concerns. In addition, an exploratory component of this study is an examination of respective relationships among common information choice strategies (i.e., opt-in versus opt-out strategies), firm reputation, consumers' privacy concerns, and trust in an e-tailer. Empirical support for hypotheses used to test each proposed relationship and literature related to the exploratory research question is provided in subsequent sections Antecedents of Internet purchase intent Privacy concerns and trust in E-tailers Initial research on electronic commerce indicates that risk related to loss of consumers' privacy and security of personal information is an important barrier to Internet adoption and use by consumers (Wall Street Journal and Harris Interactive, 2001). Individual privacy is widely regarded as a legal privilege. Applying a combination of court rulings, legal discussions, and legislative actions occurring over the past century, privacy is acknowledged to comprise four discrete legal torts (i.e., intrusion, disclosure, appropriation, and false light). In the marketing context, these torts have been interpreted by considering the extent to which a marketer provides consumers control over and access to their personal information. Hence, consumer privacy has been subjectively defined as a two-dimensional construct consisting of control over information dissemination (i.e., disclosure) and information use (i.e., appropriation, intrusion, false light) (Phelps et al., 2000). Concerns over consumers' privacy arise when marketers merge data to create relational databases that contain comprehensive individual-level information about consumers, a growing practice with database and Internet technologies (Culnan, 1995). Milne and Boza (1998) examined the relationship between consumers' privacy concerns and trust toward marketing information practices across different industries including direct marketing. They reported that, compared to other industries, consumers hold moderate levels of privacy concerns and low levels of trust toward information practices of direct marketers. Using multiple regression techniques, they also found a negative relationship between level of trust exhibited toward a direct

3 M.A. Eastlick et al. / Journal of Business Research 59 (2006) marketer and potential risk for loss of privacy and security of personal information. With regard to online retailing, it is expected that the relationship between privacy concerns and trust in an e-tailer will be similar to that observed for other direct marketers, leading to Hypothesis 1. H1. Consumers' privacy concerns will negatively influence their trust in a services e-tailer. direct-mail consumers to trust firms with their personal information. Some have also surmised that the reputation afforded offline businesses elevates consumers' trust, thereby causing their online sites to be more successful (Urban et al., 2000). Thus, Hypothesis 5a is proposed as follows: H5a. Consumers' perceptions of a strong reputation in a services e-tailer will positively influence their trust in the e-tailer Concerns about privacy and purchase intent Few empirical studies have examined how privacy threats affect consumers' purchasing behavior toward specific retailers. However, in a survey of online consumers, 53% of respondents indicated that privacy concerns would prompt them to postpone or forgo an online purchase (Wall Street Journal and Harris Interactive, 2001). In addition, Milne and Boza (1998) found that privacy concerns negatively predicted direct marketing usage. Combined, these findings led to Hypothesis 2. H2. Consumers' privacy concerns will negatively affect their purchase intent toward a services e-tailer Trust in, commitment toward, and intent to purchase from an E-tailer Trust, i.e., confidence in reliability and integrity of an exchange partner, is considered central to B-to-B relationships (Morgan and Hunt, 1994). Although trust was proposed to be instrumental in online B-to-C exchange relationships (Urban et al., 2000), the role of trust in B-to-C exchanges has received limited attention (Milne and Boza, 1998). Trust may be instrumental in B-to-B exchanges due to its influence on commitment which also affects continued purchasing and loyalty behaviors. In B-to-B contexts, commitment is conceptualized as occurring when an exchange partner puts forth maximum efforts to maintain a valued relationship with another party, and in turn, negatively affects propensity to leave the relationship (Morgan and Hunt, 1994). Hypotheses 3 and 4 apply these findings to consumers' willingness to enter exchange relationships with e-tailers. H3. Consumers' trust in a services e-tailer will positively influence their commitment toward the e-tailer. H4. Consumers' commitment toward a services e-tailer will positively influence their purchase intent toward the e-tailer Firm-related factors, privacy concerns, and trust Firm reputation and trust According to Riahi-Belkaoui and Pavlik (1992), corporate reputation is based on an assessment of the firm's product/service expertise and social character, consumers' prior experiences, and credible communications about the firm's abilities. Similarly, in B-to-B relationships, developing trust in an exchange partner requires an assessment of a partner's past effective and reliable behavior and/or concern for a partner's interests (Doney and Cannon, 1997). Milne et al. (1998) reported that, in a B-to-C context, firm reputation was a common factor leading Firm reputation and privacy concerns The need to trust an exchange partner is heightened in situations of increased risk (Crosby et al., 1990). If firm reputation and trust are positively related, it would be logical that firm reputation might also indirectly affect trust by reducing privacy concerns about information provided in a B-to-C exchange. While the relationship between firm reputation and privacy concerns has not been empirically tested, Van den Poel and Leunis (1999) reported that brand reputation was an important risk reducer when purchasing from an Internet firm. Hypothesis 5b tests the role that firm reputation may play in influencing privacy concerns. H5b. Consumers' perceptions of a strong reputation in a services e-tailer will negatively influence their privacy concerns Information choice strategy, reputation, privacy concerns, and trust Offering consumers control over dissemination and use of their personal information is widely considered to influence consumers' privacy concerns and trust in an online retailer (Culnan, 1995, 2000; Phelps et al., 2000). In support of this contention, Culnan and Armstrong (1999) concluded that, in relationships involving non-personal interactions, information choice practices perceived as being procedurally fair could lead to trust in a company, or they could moderate the effect of an e-tailer's reputation on trust and privacy concerns. The importance of control is consistently supported by research demonstrating that consumers exhibit heightened levels of concern over use of and sharing personal information in situations where they have no control (Milne and Boza, 1998; Phelps et al., 2000). Yet, little is known regarding the efficacy of different choice options used to provide control (Rust et al., 2002). Firms that offer information control typically do so via opt-out or opt-in choice formats. Generally, optout choice formats require that consumers take actions to protect their information from use and data sharing. Opt-in choice formats require that companies take actions to gain permission from consumers prior to using and sharing their information. Because U.S. marketers have been reluctant to implement stricter opt-in standards, the opt-out standard is the choice strategy utilized by most U.S. companies (Shimanek, 2001). It was, however, reported that the opt-in strategy is the guiding principle upon which a new Microsoft consumer privacy software tool was developed (Rust et al., 2002). Thus, for firms considering adoption of the opt-in option, it is important to determine

4 880 M.A. Eastlick et al. / Journal of Business Research 59 (2006) whether it has an advantage over the opt-out strategy. Arguments as to the more effective form of information choice have not been resolved because there is no strong empirical evidence to suggest that either format is superior in reducing consumers' privacy concerns. Proponents of the opt-in approach suggest that it may appease consumers' privacy fears (Rust et al., 2002). Others indicate that, because consumers may not have the ability to confidently assess privacy policies, one option may have no advantage over the other (Wolfinbarger and Gilley, 2002). Supporting this contention, one study showed that consumers viewed both choice formats as equivalent (Milne, 1997). However, no research, to date, has investigated the efficacy of either option in conjunction with privacy concerns and other relationship-building constructs. Therefore, an additional aim of this study is an exploratory examination of respective relationships among choice options, privacy concerns, firm reputation, and trust. 3. Method 3.1. Data collection Data were collected by surveying a random sample of Internet subscribers consisting of 2000 U.S. households, stratified by state. Subjects, identified as primary shoppers for computer and electronic products, were asked to complete a self-administered questionnaire. An initial mailing and one follow-up (sent to nonrespondents approximately six weeks later) were employed resulting in a 94% delivery rate and a 25.4% return rate (n = 477 usable surveys). Drawings to win $75 were provided as incentives for participation Questionnaire The written questionnaire contained measures of reputation, information choice strategy, privacy concerns, and trust in, commitment toward, and purchase intent toward a services e-tailer. Shopping behavior, demographic, and socioeconomic information were also collected. To develop the questionnaire, information obtained from a focus group of ten male and female, adult Internet consumers was used to adapt previously established scale items to reflect issues related to trust, commitment, privacy concerns, firm reputation, and information choice strategy in the context of online purchasing. A pretest experiment was then conducted on a convenience sample of 63 university students (also Internet users) to select online purchasing scenarios that would be perceived as realistic and in which manipulated variables of information choice strategy and firm reputation varied in the intended directions. Prior to implementing the survey, another pretest was conducted with the final questionnaire on a convenience sample of Internet users to uncover potential problems with statements, instructions, and format. An insurance e-tailer was selected as an appropriate context for the study because focus group results revealed that important variables under investigation were particularly salient in this context. Also, in past studies, consumers exhibited high levels of concern over the use of personal information by insurance firms, moderate levels of trust in their efforts to use that information fairly (Milne and Boza, 1998), and relied more heavily on surrogates (e.g., firm reputation) for quality evaluations of services (e.g., Berry, 1980) Research design A 2 2 research design, in which subjects were randomly assigned to one of four questionnaire versions, was used for the study. Four shopping scenarios were developed to present a purchasing situation for an insurance policy from an e-tailer having a strong versus weak reputation and employing an opt-in versus opt-out information choice strategy Operational definitions of variables Variables examined in the study consisted of five constructs including one exogenous (e-tailer reputation) and four endogenous constructs (i.e., privacy concerns, trust in an e-tailer, commitment toward an e-tailer, and purchase intent). Information choice strategy was also incorporated among study variables for an exploratory examination of common choice strategies (i.e., opt-in and opt-out strategies). To develop measures at the same levels of abstraction, global assessments were employed as operational definitions of each variable Exogenous construct Store image research suggests that consumers may form overall impressions of an image or reputation that are compared to category exemplars (Keaveney and Hunt, 1992). Consistent with this approach, e-tailer reputation was operationalized by varying the overall impression of firm ability and character. Subjects exposed to the strong reputation scenario received the following description: You are considering purchasing an insurance policy on the Internet. While conducting a search of insurance companies using a popular search engine, you visit several company sites and pick the website of one of the largest and most successful insurance companies in the U.S. The company sells a variety of types of insurance via local agents and the Internet. This company, which has been in business for over 25 years, has a reputation for being customer-oriented. Conversely, subjects exposed to the weak reputation scenario received a description of the same shopping and search process. However, the company description varied as follows: and pick an interesting website of a company from whom you are considering purchasing. Information provided on the website describes the firm as a new company, which has been in business for 6 months, that sells a variety of types of insurance via the Internet Endogenous constructs Three of the endogenous constructs including Privacy Concerns, Trust in a Services E-tailer, and Commitment toward a Services E-tailer were assessed via multi-item measures using a 5-point Likert scale, i.e., very strongly disagree (1) to very strongly agree (5). A four-item scale designed to evaluate

5 M.A. Eastlick et al. / Journal of Business Research 59 (2006) Table 1 Socioeconomic and demographic characteristics of respondents % of respondents % of respondents Household income: n=466 Education: n=466 $24,999 and Below 14.0 High school degree 16.0 $25,000 to $49, Some college 39.0 $50,000 to $74, College degree 28.5 $75,000 to $99, Graduate school or graduate degree 16.6 $100,000 and over 11.0 Occupation: n=340 Location of Residence: n=475 Skilled laborer/crafts 7.4 South 36.3 Clerical/sales 15.0 West 21.4 Manager/administrator 35.3 Northeast 19.3 Professional 42.4 North central 23.1 Age: n=452 Gender: n= to Female to Male to Marital Status: n= to Married to Never married/widowed/divorced and older 6.9 Ethnicity: n=457 Employment Status: n=466 Caucasian 88.0 Full-time 59.7 Other 12.0 Part-time 11.6 Other * 28.7 * e.g., retired, attending school, homemaker, unemployed, etc. consumers' privacy concerns about dissemination and use of their personal information (i.e., disclosure, appropriation, intrusion) was employed to assess Privacy Concerns. Items, written by the researchers, were adapted from focus group results and past research on privacy concerns (Milne and Boza, 1998). Trust was measured using 8 items adapted from an established scale (Larzelere and Huston, 1980) used in marketing studies to provide a global assessment of trust toward overall fairness, honesty, and sincerity in a firm's dealings with its customers (Doney and Cannon, 1997; Morgan and Hunt, 1994). Commitment was measured by adapting an eleven-item scale employed in organizational research (Mowday et al., 1979) that provides an overall evaluation of consumers' allegiance and obligation toward a firm. The fourth endogenous construct (Purchase Intent toward a Services E-tailer) was measured with a single item written by the researchers, Do you think you would purchase from the company described in this situation? This was rated using a 5-point Likert scale, i.e., No (1) to Definitely Yes (5) Information choice strategy Information Choice Strategy was manipulated by providing the company's information practices policy using either an opt-out or opt-in standard (Milne, 1997). The opt-out choice option required consumers to take action by contacting the e-tailer if they did not want their information shared (e.g., checking a box, calling, writing, or ing). Alternatively, the opt-in choice option requested consumers' permission to share their information. Disclosure of intent to share consumers' information with other companies and the information to be shared (e.g., socioeconomic, purchase and search histories) were provided to control for knowledge about information usage. 4. Results 4.1. Respondents' characteristics Characteristics of respondents (see Table 1)were compared to characteristics of U.S. online shoppers reported in a study conducted during a similar time frame (Ernst and Young, 2001). The Ernst and Young study indicated that characteristics of the U.S. online shopper and the middle-class retail consumer were increasingly becoming similar (i.e., average household income of $52,200, 35% with a college degree, 50% with no college degree, average age of 42, 60% female, and 59% married). Of this study's respondents, 58% earned annual household incomes between $25,000 and $74,999, 45% held a college degree, 55% had not earned a college degree, and 48% were middle-aged. Most respondents were female, married, Caucasian, and employed fulltime in manager/administrator or professional occupations. Also, their locations of residence were distributed across the country with the highest proportion residing in the South. Information provided by respondents on their Internet-usage behavior for the previous 6 month period also revealed that they were experienced Internet consumers. Approximately 64% had searched online over 11 times for product/services information. Over 50% and 25% had made one to five and over six online purchases, respectively. Also, about 45% of respondents had either searched for information on or purchased financial services online Manipulation checks The questionnaire included manipulation checks (four Likertscale statements) for e-tailer reputation. T-tests revealed that subjects exposed to the strong reputation scenario perceived

6 882 M.A. Eastlick et al. / Journal of Business Research 59 (2006) Table 2 Measurement model results Construct indicator Statement Std. loading ξ 1 (Services e-tailer reputation) SE t* Reliability % of variance X 1 Strong versus weak 0.39 a η 1 (Trust in a services e-tailer) 0.84 c 52.0% d γ 1 Company cannot be trusted (R) 0.68 b γ 2 Company would be honest and truthful γ 3 Would be able to trust company completely γ 4 Company will be sincere in promises γ 5 Company will treat me fairly and honestly η 2 (Privacy concerns) 0.85 c 66.1% d γ 6 Shopping from company will place my information at risk 0.84 b γ 7 Purchase information collected by company will place my information at risk γ 8 Shopping from company will place my information on unsolicited mailing lists η 3 (Commitment toward a Services E-tailer) 0.92 c 67.1% d γ 9 Willing to put effort into helping company be successful 0.82 b γ 10 Recommend this company to friends/family γ 11 Proud to be a customer γ 12 Happy to choose company over others γ 13 Care about fate of company γ 14 Company would be among best to shop η 4 (Purchase intent toward a services e-tailer) γ 15 Likelihood of purchase 0.91 a *p's.05. a. Single item indicator with error estimates adjusted. b. First λ path for each construct set to 1; therefore, no SE's of t-values given. c. (Σ Std. loadings) 2 /[(Σ Std. loadings) 2 +Σξ j ]. d. Σ Std. loadings 2 /Σ Std loadings 2 +Σξ j. that e-tailer as being significantly (p's.05) more credible (x =3.07), more reputable (x =2.87), of greater integrity (x =3.16), and better known (x =3.02) than those exposed to the weak reputation scenario (x 's = 2.41, 2.33, 2.59, 2.13, respectively) 4.3. Tests of hypotheses Structural equation modeling was conducted via Lisrel 8.3 by employing the correlation matrix to estimate the structural model. The research model, shown in Fig. 1, consisted of one exogenous and four endogenous constructs. Prior to testing the structural model, confirmatory factor analysis was employed to assess the measurement model Measurement model results Principal components exploratory factor analysis with Varimax rotation was first conducted on the 4-item privacy scale written by the researchers. Privacy Concerns was explained by one factor consisting of all four items (factor loadings:.80 to.90; reliability: 0.88). Confirmatory factor analysis was then employed to test all multi-item scales (i.e., Trust, Privacy Concerns, and Commitment). Indicators with nonsignificant factor loadings were eliminated, and a conservative error variance was established for single-item constructs (i.e., E-tailer Reputation and Purchase Intent). Results of the measurement model (see Table 2), provide evidence that the remaining indicators and their underlying constructs were acceptable. Discriminant validity was found acceptable with all cross-construct correlations significantly different from 1.0 (p.05) Causal equation model results Results from structural equation modeling obtained for the theoretical model revealed a significant chi-square of (df=88; p.001), an artifact of the large sample size. However, the GFI (.95), AGFI (.93), CFI (.99), RMSEA (.047), and χ 2 /df (2.01) indicated good model fit. Table 3 presents the simple statistics and intercorrelations as well as the model and structural path coefficients for each relationship. The predicted negative relationships between Privacy Concerns and Trust (H1) and Privacy Concerns and Purchase Intent (H2) were supported. Both Hypothesis 3, predicting that Trust will positively influence Commitment, and Hypothesis 4, predicting that Commitment will, in turn, positively influence Purchase Intent, were also supported. Additionally, the positive relationship between a strong E-tailer Reputation and Trust (H5a) and the negative relationship between a strong E-tailer Reputation and Privacy Concerns (H5b) were each supported. Focusing on the model's total effects, the strongest direct effects were observed for the effect of Trust on Commitment (β 31 =.86) and the influence of E-tailer Reputation on Trust (γ 11 =.64) followed by the effects of Privacy Concerns on Trust

7 M.A. Eastlick et al. / Journal of Business Research 59 (2006) Table 3 Structural model descriptive statistics, intercorrelations, and model estimation results Latent variables Mean S.D. Intercorrelations Services e-tailer reputation Trust in a services e-tailer Privacy concerns Commitment toward a services e-tailer Purchase intent toward a services e-tailer Hypothesis Path Effect estimate Hypothesis 1 Privacy concerns (η 2 ) trust (η 1 ).50 * Hypothesis 2 Privacy concerns (η 2 ) purchase intent (η 4 ).23 * Hypothesis 3 Trust (η 1 ) commitment (η 3 ).86 * Hypothesis 4 Commitment (η 3 ) purchase intent (η 4 ).47 * Hypothesis 5a Reputation (ξ 1 ) trust (η 1 ).64 * Hypothesis 5b Reputation (ξ 1 ) privacy concerns (η 2 ).28 ** Model results: χ 2 = (df=88, p.001) χ 2 /df=2.01 GFI=.95 AGFI=.93 CFI=.99 RMSEA=.047 Notes: 1. 0 = Weak reputation; 1 = Strong reputation. * p.001. ** p.05. Squared multiple correlation: Trust=.84 Privacy concerns=.08 Commitment=.74 Purchase intent=.40 (β 12 =.50) and Commitment on Purchase Intent (β 43 =.47). The strongest indirect effects included that of a strong E-tailer Reputation on Commitment through Trust (γ 11 *β 31 =.55) and a strong Reputation, through both Trust and Commitment, on Purchase Intent (γ 11 *β 31 * β 43 =.26) Exploratory investigation of information choice strategies The exploratory examination of the relationships among optin and opt-out information choice strategies and privacy concerns, trust, and reputation was conducted in two ways. First, a path from information choice to privacy concerns was incorporated in the final structural model. The path did not change the fit indices and was not significant (pn.05). Second, a two (information choice) by two (e-tailer reputation) ANOVA was used to test whether an interaction existed between reputation and information choice strategy on privacy concerns. Results revealed a significant main effect for firm reputation (F=6.61; p.01). However, there was no main effect of information choice strategy on privacy concerns (F=1.43; p.22) and no interaction of firm reputation and information choice on privacy concerns (F = 2.18; p.14). Because information choice strategy might also interact with firm reputation in influencing trust, another two-way ANOVA was employed using trust as the dependent variable. Results showed no interaction between information choice strategy and firm reputation on trust (F=1.46; p.23) and no main effect of information choice strategy on trust (F=1.15; p.28). However, a main effect was revealed for firm reputation on trust (F=28.19; p.0001). 5. Discussion This study examined, through an integration of precepts from privacy concerns and relationship marketing literatures, the role of potential contributors to, and detractors from, B-to-C online relationships. In addition, the possible effects of firm-related factors were assessed. It is one of few studies to empirically demonstrate the negative influence of privacy concerns on Internet purchasing. Results also demonstrate strong support for the importance of trust and commitment in B-to-C relationships in an online services context. Relative to firm-related factors, findings reveal that a strong reputation positively influences trust which, in turn, positively affects commitment and purchase intent. In addition, a strong reputation negatively influences privacy concerns which impacts purchase intent directly and indirectly through both trust in and commitment toward the services e-tailer. Lastly, findings render arguments over superiority of an opt-in or opt-out information choice strategy as questionable since neither

8 884 M.A. Eastlick et al. / Journal of Business Research 59 (2006) possessed advantages in abating consumers' privacy concerns or elevating their trust Consumers' privacy concerns, trust, commitment, and purchase intent The first objective of this study was to examine the role of privacy concerns on factors that may contribute to B-to-C relationships with an online services retailer. Bridging a gap in knowledge, the present empirical analysis concludes that privacy concerns strongly and negatively predict (significance at p.001) trust in a services e-tailer. These findings also clarify evidence provided by a past B-to-C descriptive study of 17 industries (Milne and Boza, 1998) by verifying the direction of the privacy concern trust relationship (e.g., lower privacy concerns leads to greater trust as opposed to vice versa). One of this study's contributions is a better understanding of whether B-to-B relationship theories can be applied to online B- to-c relationships encompassing necessary modifications with respect to privacy concerns, trust, and commitment. Overall, the B-to-B model is indicative of the B-to-C model, but the present study's findings do reveal some departures. For example, as opposed to our finding of a negative privacy concern trust relationship, results of a B-to-B relationship study (Morgan and Hunt, 1994) demonstrated that perceived opportunistic behavior (possibly analogous to privacy concerns) negatively impacted commitment but did not affect trust. Also, in a rival model's testing, no relationships were found among opportunistic behavior, trust, and commitment. While privacy concerns and opportunistic behavior may represent different types of risk, these varied results support a call to determine the applicability of traditional models to the B-to-C setting (Parasuraman and Zinkhan, 2002). Possibly, underlying unique environments for privacy/ relationship issues may explain different results in B-to-B and online B-to-C contexts. In B-to-B settings, information practices may be grounded in daily collaboration and data sharing, an ongoing situation that may not be characteristic of B-to-C settings. Other contrasts may include the degree of flexibility in terminating the relationship. Lastly, rewards from B-to-B relationships may be more visible (e.g., profit), directly tied to data collection, and received in a timely manner. Comparatively, consumers of online retailers may experience delayed, abstract benefits that are not directly associated with sharing their personal information. The direct impact of consumers' privacy concerns on their purchase intentions toward a services e-tailer is also consistent with previous findings demonstrating a relationship between privacy concerns and use of direct marketing (Milne and Boza, 1998; Phelps et al., 2000). Results suggest that consumers may decide not to purchase online based solely on their concerns about collection and misuses of their personal information. The strength of the beta coefficients from privacy concerns to both trust and purchase intent show that privacy concerns has its greatest impact on purchasing intent through its relationship with trust. This implies that the direct influence of privacy concerns on purchase intent is temporal with immediate, negative consequences for purchase intent. However, because trust is a deeply held consumer attitude that also affects commitment, the negative influence of privacy concerns through trust may be more devastating for the long run due to its adverse impact on the overall relationship with the e-tailer. Given that privacy concerns may exert lasting damage to the online B-to-C relationship, employment of strategies that lessen these concerns is critical. Experts suggest that some cues, particularly the use of seals of approval from unbiased, credible parties, may be effective in this regard. Practitioners also warn against using covert data collection devices and advocate strict adherence to established privacy policies (Urban et al., 2000). A retailer's reputation has also been proposed as a risk-reducing communication to consumers. Website operators may also need to educate consumers regarding relationship benefits that result from information sharing The roles of trust and commitment on intent to purchase The study's second objective was to empirically test the supposition that trust and commitment, important relationship variables in B-to-B relationships, play key roles affecting B-to-C online purchase intent. This testing was based on the assumption that a relationship could be established between consumers and a services e-tailer. Given channel differences, this may have been a lofty assumption. However, this study's results support the theory that such alliances are feasible. This finding, in and of itself, is not a minor point inasmuch as interaction between consumer and e-tailer is a faceless one. From the practitioner's view, results related to trust and commitment indicate that, in addition to focusing on typical marketing strategies aimed at building price, promotional, and fulfillment advantages, strategies should also encompass achieving mutual benefits that culminate in long-term B-to-C relationships. Within the context of this study, trust and commitment were established as core components of services e-tailers' relationships with consumers. Two of the strongest direct relationships observed in the model were positive relationships between trust and commitment and commitment and purchase intent. These findings support research showing both trust and commitment as critical central elements of B-to-B exchange relationships (Morgan and Hunt, 1994) and further underscore contentions of Urban et al. (2000) who propose that website trust will differentiate successful from failing online retail companies. Insofar as the importance of trust and commitment have been established in online retailer-consumer relations, one next research step may be to identify differences and similarities between consumers' commitment and loyalty toward a services e- tailer. Oliver (1999) suggests that consumers perceive various degrees of loyalty. Given this premise, commitment may also be present in varying degrees and/or may be analogous to specific stages of loyalty. Future research may also ascertain whether the channel itself facilitates or hinders consumers' perceived trust and commitment. Some researchers advocate that consumers may have more difficulty formulating expectations about some dimensions of online, as compared to offline, service quality (Zeithaml et al., 2002). Conversely, others contend that

9 M.A. Eastlick et al. / Journal of Business Research 59 (2006) enhanced interactivity of the online channel may capacitate building trust with consumers (Urban et al., 2000) Firm-related factors and online B-to-C relationships The study's third objective was to investigate firm-related factors (i.e., reputation and information choice strategy) that may have potential for strengthening B-to-C relationships and mitigating consumers' privacy concerns. Accomplishment of this goal fulfills researchers' calls for empirical examinations of e-service factors, including privacy policies and other cues, that may signify trust, e.g., firm reputation (e.g., Rust et al., 2002; Zeithaml et al., 2002) Firm reputation as a determinant of trust and privacy concerns The direct effect of firm reputation on trust in an e-tailer is one of the strongest relationships validated by this investigation. Findings show that a strong, as compared to weak, firm reputation contributes to greater trust in a services e-tailer. This result is consistent with an expectation that trust is derived from consumers' evaluations of a firm's past behaviors (Doney and Cannon, 1997). In addition, the strong firm's reputation was an effective agent in easing respondents' concerns about sharing personal information with the e-tailer. For firms that do not have established retailer reputations, this study's results seem to indicate that creating a stellar firm reputation should be a foremost objective. A strong firm reputation not only elicits perceptions of trust among consumers but also reduces risks associated with privacy concerns. The latter result adds to prior findings which showed that the combined offering of well-known product brands, money-back guarantees, and price reductions was the most effective strategy for significantly reducing consumers' perceived risk about online shopping (Van den Poel and Leunis, 1999). Further research is warranted to investigate whether other strategies are similar to e-tailer reputation in building customer trust and/or reducing privacy concerns. Also, as the strong reputation manipulation portrayed the e-tailer as a multi-channel player (i.e., possessing both offline and online channel offerings), these results lend potential credibility to the proposition that successful Internet retailers may be firms with a physical presence (Ernst and Young, 2001). However, it is not clear that incorporating an offline offering into the channel strategy is sufficient to enhance an e-tailer's reputation The role of information choice strategy No relationships were found among opt-in and opt-out information choice strategies and consumers' privacy concerns, trust, and e-tailer reputation. A number of theoretical propositions might explain these results. The first explanation may be that consumers merely want to have control over use of their personal information and, once provided, the structure of a choice option is not important (Buskin, 2000). Equity theory provides a second perspective through a concept known as voice (Culnan and Armstrong, 1999). The chance to communicate and/or choose (i.e., via opt-in or opt-out options) may have led respondents to perceive both options as equally fair. A third explanation may be consumers' confusion and lack of confidence with appraising privacy policies. Wolfinbarger and Gilley (2002) found that, in this situation, consumers evaluated privacy policies through website characteristics and firm reputation. Further research is needed to determine the most relevant alternative theoretical framework for illuminating the provision of information choice Study limitations and implications for future research Because only one services e-tailing format served as the study's focus, results cannot be generalized to other types of e-tailers. Future research should investigate whether relationships among reputation, privacy concerns, trust, and commitment vary by type of online format. Researchers should also examine consumers' perceptions of relationships among these constructs in the context of multi-channel firms including both physical and other direct channels (e.g., catalog). Also, because reputation was important in increasing trust and dissipating privacy concerns, future research should examine various dimensions of reputation in the minds of consumers. In addition to firm reputation, factors such as experience with the retailer, relationship benefits via customization opportunities, perceptions of a retailer's opportunistic behaviors, web design, etc. may also contribute to developing trust and commitment toward online and other channel retailers. Future research should examine the combined contribution of multiple factors that might contribute toward establishment of trust in a retailer. The modes of communicating a company's privacy policies examined by this research were limited to two choice options for consumers' personal information. Future research also needs to investigate the effectiveness of non-voluntary (i.e., privacy laws) as well as other voluntary means (i.e., privacy seals of approval) of communicating privacy policies to consumers. In addition, future research should be undertaken to better understand potential dimensions of consumers' privacy concerns and how those dimensions might relate to established legal tort and potential differential effects of each on behavior. Acknowledgments The authors wish to extend their appreciation to the Direct Marketing Policy Center of the University of Cincinnati for the partial support of this project. References Berry L. Service marketing is different. Business 1980;30:24 9. Blattberg RC, Deighton J. Interactive marketing: exploiting the age of addressability. Sloan Manage Rev 1991;33(1):5-14. Buskin J. Choice and trust. Wall Street J 2000:R34 [April 17]. Crosby LA, Evans KR, Cowles D. Relationship quality in services selling: an interpersonal influence perspective. J Mark 1990;54:68 81 [July]. Culnan MJ. Consumer awareness of name removal procedures: implications for direct marketing. J Direct Mark 1995;9(2):10 9. Culnan MJ. 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