An Investigation of Customers’ Loyalty to Social Commerce Websites

Hilal Alhulail, Martin Dick and Ahmad Abareshi

School of Business IT and Logistics, RMIT University, 445 Swanston Street, Melbourne, Australia

Keywords: Social Commerce, Customer Loyalty, Social Presence, Trust, Information Systems Success, Australia.

Abstract: The emergence of web 2.0 has brought new applications which have played a significant role in extending

e-commerce websites with social commerce (S-Commerce) functionality. S-Commerce is a new extension

of B2C e-commerce where customers purchase products/services online with the existence of social cues in

the websites (such as reviews, recommendations and sharing). There has been little research in the area of

customer loyalty to S-Commerce websites. Drawing upon theories of social presence and trust; and the

Delone and McLean model of information systems success, this study aims to determine what factors affect

customer loyalty to S-Commerce websites and to develop a framework that helps in investigating those

factors. In order to achieve this objective, a quantitative approach will be employed. Data will be collected

from S-Commerce users in Australia via survey. Analysis will be performed using Structural Equation

Modeling (SEM). This study will contribute to the S-Commerce literature through a theoretical framework

that shows how the loyalty of customers can be generated in S-Commerce websites. In addition, it is

expected that this study will help businesses to have understanding of how to retain their customers which

will result in higher profits.

1 INTRODUCTION

The emergence of web 2.0 has brought with it new

applications that have played a significant role in

developing e-commerce sites which enhanced with

social features. Social media sites have offered users

the opportunity to communicate with each other,

exchange opinions, post comments, photos, and

videos, as well as give recommendations and

referrals. The dynamic nature of social interaction

via social media sites and the potential financial

benefits of these sites have been recognized by e-

commerce businesses and social networks

throughout the world as part of what is known today

as “social-commerce” (s-commerce), which also can

be defined as the usage of social media in e-

commerce. This initial research in progress aims to

examine the aspect of customer loyalty in relation to

social commerce

The term “s-commerce” was introduced by

Yahoo in 2005 (Wang and Zhang, 2012). According

to (Shen and Eder, 2009), s-commerce is an

extension of business-to-consumer e-commerce in

which consumers interact with each other while

conducting online shopping activities, such as

discovering products, aggregating and sharing

product information, and collaboratively making

shopping decisions. For the purposes of our study,

we have chosen to follow Shen and Eder's definition

of s-commerce. Researchers have predominantly

discussed s-commerce in two different ways: first, in

terms of commercial features added to social

networking sites (SNS) that allow people to make

purchases, such as Facebook (Liang et al., 2011).

Second, in terms of traditional e-commerce sites that

add social features and content to allow people to

socialize while making purchases, such as Amazon

and eBay (Shen and Eder, 2009). This study will

focus on the second form, as the majority of s-

commerce transactions currently being made

throughout the world are of this type.

Many studies have been published that have

sought to investigate various aspects of s-commerce

(see Table 1), yet there currently exists a gap in the

literature in terms of customer loyalty. The

exception are Liang et al., (2011) who have

conducted an empirical study on a Social Network

Site (SNS) to investigate how social factors such as

social support and relationship quality affect the

user’s intention of future participation in social

commerce. However, in this study we will study

customer loyalty from different angle. Therefore, the

researcher seeks to conduct a survey to investigate s-

Alhulail H., Dick M. and Abareshi A..

An Investigation of Customers’ Loyalty to Social Commerce Websites.

DOI: 10.5220/0005562000880093

In Proceedings of the 12th International Conference on e-Business (ICE-B-2015), pages 88-93

ISBN: 978-989-758-113-7

 2015 SCITEPRESS (Science and Technology Publications, Lda.)

commerce customer loyalty in Australia. The

following factors of customer loyalty in the s-

commerce context will be considered in this study:

satisfaction, trust, social presence, service quality,

system quality, information quality, reputation,

online shopping experience, word-of-mouth, and

communication. Of these, little research has been

done to investigate the influence of social presence

(SP) on customer attitudes in the s-commerce

context (see Table 1), as well as the influence of SP

on customer loyalty. Lu and Fan, (2014) argue that

the multidimensional nature of SP should be taken

into consideration when studying SP because people

in virtual communities do not deal only with the

computer medium; however, they interact with other

people in such a medium. They propose three

dimensions of SP in the s-commerce context: the SP

of a website (i.e., websites that are rich in

information and have social cues, such as images,

audio, and videos), the perception of other users on

the web (i.e., websites that allow for the social cues

of users, such as recommendations, reviews, and

rankings), and the SP of customers interactions with

sellers. This study will focus on customer loyalty

from a buyer perspective, examining the impact of

SP on customer loyalty in the s-commerce context

from two perspectives: the SP of a website and the

perception of other users on the web.

The current study seeks to develop a framework

to assist businesses using s-commerce to improve

customers’ loyalty to their websites. To achieve this

objective, this primary question is formulated:

What are the key factors that influence customer

loyalty to s-commerce websites?.

Sub-questions are:

1. What are the dimensions of customer loyalty to

s-commerce websites since it is different from

customer’s loyalty to e-commerce websites?

2. How do the key factors interact to influence

customer loyalty to s-commerce websites?

3. What are the factors that affect trust in s-

commerce websites?,

4. How does SP in its two dimensions affect

customer loyalty to s-commerce websites?

5. How does customer satisfaction have an impact

on customer loyalty to s-commerce websites?

This paper will be organized as follows: first, a

literature review will be presented. Second, the

study’s theoretical framework and research

hypotheses will be given. Third, the study’s

methodology will be presented, followed by its data

collection, data analysis, study outcomes, ethical

considerations, and time schedules.

2 LITERATURE REVIEW

This section reviews prior literature on s-commerce

and customer loyalty. Table 1 shows a summary of

this literature review.

Table 1: A Summary of Previous Literature on s-commerce.

Dependant

Variable/

Outcome

Author(s)/

Year

Theory Used

Purchase

Intention

(Hajli, 2013, Ng,

2013, Kim and

Park, 2013, Hajli,

2012b, Ng, 2012,

Mikalef et al.,

2013)

Social support, Theory of Planned Behaviour (TPB), Technology Acceptance

Model (TAM), Social Influence, Social Impact, Theory of Reasoned Action

(TRA), Trust Transference Theory, Social Interactions, and Hofstede’s Cultural

Dimensions.

Behavioural

Intention

(Shen, 2012,

Gatautis and

Medziausiene,

2014, Tan et al.,

2012)

Social Comparison Theory, Social Presence, Flow theory, TAM, , technology

Acceptance and Technology Resistance Theories, SoloMo Theory, TAM, and

TRA

Behaviour (Shin, 2013) TPB and TAM

Word-Of-

Mouth

Intention

(Kim and Park,

2013, Mikalef et

al., 2013)

TRA and TPB

S-commerce

Intention

(Zhang et al.,

2014)

Stimulus-Organism-Response (S-O-R) Model

Use Intention (Hajli, 2012a) TAM

Continuance

Intention

(Liang et al.,

2011)

TRA, TAM and Social Support

AnInvestigationofCustomers'LoyaltytoSocialCommerceWebsites

2.1 Attitudinal and Behavioural

Customer’s Loyalty

According to the literature, there are two kinds of

customer loyalty: behavioural customer loyalty and

attitudinal customer loyalty. The former is past-

focused (i.e., retrospective) and refers to loyalty

obtained through repeated purchasing behaviours

and engaging in recommendations over time,

whereas the latter is future-focused (i.e.,

prospective) and refers to a loyalty of intention to

engage in certain purchasing behaviours in the future

(Allagui and Temessek, 2004, Jang et al., 2008,

Kandampully and Suhartanto, 2003, Toufaily et al.,

2013).

Many researchers have argued that customer

loyalty to a website cannot be measured simply by

observing repeat purchases, which is the method of

the behavioural approach (Shankar et al., 2003,

Currás-Pérez et al., 2013). Instead, an understanding

of customer loyalty to s-commerce websites should

take into consideration customers’ intentions to

continue using a website, including their browsing,

purchasing, and sharing of purchases with friends on

a particular social networking site, as well as

recommending such sites to other users through

various social media features, such as comments,

recommendations, and rankings. Given this

recognition, this study will adopt an attitudinal

approach to customer loyalty.

2.2 Customer’s Loyalty in

s-Commerce

The difference between traditional customer loyalty

and e-loyalty is that the former represents a

customer's attitudinal preference toward a particular

product or service, whereas the latter refers to a

customer's attitude or behaviour toward revisiting a

particular website (Anderson and Srinivasan, 2003).

Cyr et al., (2008) define e-loyalty as the perceived

intention to visit a website and purchase and

repurchase from it in the future. Currás-Pérez et al.,

(2013) define customer loyalty to a social

networking site as "a favourable attitude towards

that social networking site expressed by the intention

to continue using it in the future and recommend that

other users use it." In line with this definition, and

based on the s-commerce definitions of prior

mention in this study (Afrasiabi Rad and Benyoucef,

2011, Zhong, 2012, Leitner and Grechenig, 2007,

Wang, 2009, Shen and Eder, 2009), we define

customer loyalty toward s-commerce websites as a

favourable attitude toward a particular s-commerce

site expressed by the intention to continue using it.

Here, usage includes the following: browsing the

site, purchasing from the site, creating content,

sharing a purchase with other friends on a particular

social networking site, and recommending the site to

other users through integrated social features, such

as comments, recommendations, and rankings.

Usage is more complex in s-commerce than in e-

commerce. On a traditional e-commerce website,

there are only two possible actions: browsing and

purchasing. On an s-commerce website, however,

there are an additional three possible actions:

creating content, sharing, and recommendations.

These are major differences between customers’

loyalty to the two kinds of websites, each of which

are related to customer loyalty.

3 THE THEORETICAL

FRAMEWORK AND

RESEARCH HYPOTHESIS

This section summarize the theoretical background,

research model, and hypotheses development of the

study.

3.1 Theoretical Background

The conceptual model, in Figure 1 draws on

customer loyalty, SP and trust theories detailed in

the literature review as well as the updated IS

success model of Delone and McLean (2003) review

to identify both possible factors and their

relationships. These theories were used for the

following reasons: first, these theoretical approaches

and this model will help to investigate customer

loyalty in s-commerce as other studies focus on

customers’ intentions to use s-commerce websites in

a variety of ways. Second, many studies have

utilized various theoretical approaches to study

consumer attitudes in the e-commerce and e-service

contexts (Gefen and Straub, 2004, Hassanein and

Head, 2007, Cyr et al., 2007), yet social presence

theory has yet to be used to study customer loyalty

in the s-commerce context. These theoretical

approaches have assisted to identify twelve possible

factors and their relationships that influence

customer loyalty in s-commerce.

3.2 Research Model and Development

of Hypothesis

The proposed research model is depicted in Figure 1.

ICE-B2015-InternationalConferenceone-Business

There is a positive relationship between the

factors. The first two hypotheses are examples, as

there is insufficient space to provide all the

hypotheses in detail:

Hypothesis 1. There is a positive association

between customers’ levels of satisfaction and

customer loyalty to an s-commerce website.

Hypothesis 2. There is a positive association

between customers’ levels of trust and customer

loyalty to an s-commerce website.

4 RESEARCH METHODOLOGY

AND DESIGN

Given the objectivity of the data in this research, a

quantitative approach was deemed appropriate for

the current study. The benefits of quantitative

research include the strong validity and reliability

that come with utilizing only observable facts. This

study aims to involve 1,000 s-commerce customers.

Therefore, the study’s survey will be web-based.

The study will employ a cross-sectional method for

the survey and use a structured questionnaire to

collect data. The population of the study will consist

of male and female customers of multiple s-

commerce websites (e.g., Kogan, eBay, Amazon,

Target, Big W, Harvey Norman, Dick Smith, Etsy,

OO, Booktopia, Shopping.com Network, Deals

Direct, and Gumtree) who live in Australia and is

sourced from a research panel. The survey questions

are based on a range of existing surveys that address

the relevant factors.

4.1 Data Analysis

The research model of this study will be tested using

structural equation modelling (SEM). SEM is a

statistical technique for testing and estimating causal

relations via the use of qualitative causal

assumptions and statistical data. The use of SEM

will allow the researcher to compare the study’s

empirical data and model. SEM will then be used to

test the hypothesized relationships among the

study’s constructs.

5 OUTCOMES OF THE STUDY

The conceptual model generated by this study,

especially when tested and refined by the future

work will be useful for businesses using or

considering the use of s-commerce, customers of s-

commerce websites, and other academics studying

this topic. From the academic perspective, it will add

a framework that details the factors influencing

customers’ loyalty to the body of s-commerce

research, will contribute to an in-depth

understanding of the impacts of social presence

(especially the social presence of other users),

satisfaction, trust, and loyalty of customers in s-

commerce, it will give more understanding of

Figure 1: Research Model.

AnInvestigationofCustomers'LoyaltytoSocialCommerceWebsites

dimensions of customers’ loyalty to s-commerce

websites since it is different from customers’ loyalty

to e-commerce websites. From the business

perspective, it will provide businesses a framework

that will allow them to improve their s-commerce

websites to increase customer loyalty. Finally, from

the customer perspective, if businesses implement

the framework, customers will receive better s-

commerce website services.

6 CONCLUSION AND FUTURE

WORK

Drawing upon SP and trust theories as well as the

updated IS success model of Delone and McLean

(2003), this paper presents a conceptual model to

studying the impact of social presence, trust and the

three web qualities (information, system, service) on

customers’ loyalty to s-commerce websites. In future

work, a survey of 1,000 s-commerce customers will

be conducted and the conceptual model tested and

refined using a SEM approach.

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AnInvestigationofCustomers'LoyaltytoSocialCommerceWebsites