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et al.
2012) and reducing sacrifices derived from the online shopping process, such as time
and effort expended during the process of searching relevant products. Online vendors can
provide recommendations based on customers profiling or create a personalized list of
favourite goods. They can collect buyers’ preference information with relatively low cost and
high efficiency, and further design a specific product or service towards certain customers,
which makes the customer perceive extra benefits of online shopping and would reduce their
perceived TCs.
134
In light of the above discussion, this study proposes that good service quality pertaining to
reliable transaction, responsive service and personalized recommendations are likely to
increase the benefits of online shopping and alleviate uncertainties of online shopping. Online
stores with the ability to provide error-free after sales services, promptly address consumers’
inquires and offer personalized service will add credibility to themselves and further reduce
consumers’ perceived TCs. On the contrary, poor services quality tends to increase their
perceived TCs of purchasing from the online store. It follows that:
H2c: A customer’s perception of the e-service quality of an online store is negatively related
to his/her perceived TCs associated with purchasing from the online store.
Reputation of online store
The reputation of a vendor is the perception a customer has about an organization (Qureshi
et
al.
2009). It includes the vendor’s public image regarding its commitment to customer
satisfaction, innovativeness in customer service, the quality of market offerings, and issue
relating to corporate social responsibility (Ba and Pavlou 2002, Ranganathan 2012, Tams
2012). In the offline world, prior studies suggest that reputation is a valuable asset that
requires a long-term investment of resources, effort, and attention to customer relationships,
and indicates past forbearance from opportunism (Buckley and Casson 1988, Chen and Pan
2012) which in turn generates trust. This trust emerges from the belief that firms with a good
reputation are reluctant to risk their goodwill by acting opportunistically (Kramer 1999,
Qureshi
et al.
2009, Kim
et al.
2012a) as the costs of untrustworthy behaviour are perceived
to be higher for firms that already have a good reputation. As such, firms with a good
reputation enhance consumer trust and alleviate their perception of uncertainties when they
conduct transactions with the firms.
135
In e-commerce, an online store’s reputation is perhaps even more critical to the customer’s
evaluation of the store’s credibility because there are fewer visible signals of credibility and
greater risks in a virtual environment (Wirtz and Lihotzky 2003, Kim
et al.
2013a).
Reputation has long been cited as a critical factor evoking a prospective customer’s initial
trust in an online context (Jarvenpaa
et al.
2000, Koufaris and Hampton-Sosa 2004, Kim
et al.
2008, Chang
et al.
2013). Having a good reputation can alleviate risks and uncertainties of
products or services perceived by consumers because they have formed trust in the online
vendor (Qureshi
et al.
2009). An online store with a good reputation is attractive to
consumers as it tends to provide reliable information without the need to try the merchandise.
For online shoppers, although they do not have the chance to physically inspect the products
which makes it hard to verify the quality of online purchases, a good reputation can
compensate for the lack of physical check in e-commerce and act as a reassurance of the
quality of the products or services to the consumers. It also influences on consumers’ search
and evaluation costs as it reduces the costs for evaluating the quality of products/services and
exploring alternatives.
Consumers are not willing to put themselves at risk when they make a purchase at an online
store that they are not familiar with or have never heard about (Teo and Yu 2005). Pavlou et
al. (2003) indicate that consumers prefer well-known online stores in order to reduce
uncertainties because these stores reassure consumers and diminish evaluation and
monitoring costs that arise especially when consumers conduct business with an unfamiliar
online vendor. In this sense, good reputation guarantees good quality and customer service,
and reduces the difficulty in assessing the performance of online vendors, thereby reducing
evaluation cost and monitoring cost perceived by consumers. Following this line of reasoning,
136
the researcher contends that reputation remains instrumental in reducing consumers’
perceived TCs. This leads to the following hypothesis:
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