ABSTRACT
The dawn of commerce on the Internet was heralded as a leveling of the playing field for business, as well as an opportunity for consumers to gain access to a broader range of sellers, better information, and lower prices (Watson et al. 1998). On the marketing side, traditional channels were said to be expensive and favor larger companies with better distribution networks and larger budgets, whereas the Internet offered new, potentially lower cost alternatives to communicate with target consumers and distribute products. For consumers, the Internet offered a very different environment, with greater access to a variety of information from companies and competitors, as well as other consumers, experts and trend setters. These circumstances were expected to intensify market competition in a number of respects (Economist 1997), with potential benefits for consumers, small business, and the economy more broadly. Consumers seemed especially likely to benefit in terms of lower prices and a greater variety of better quality goods and services. The current reality is quite different from the information utopia anticipated by many. Virtual
retailing is instead dominated by big brands, most of which have a substantial bricks-and-mortar presence offline as well (Benedicktus et al. 2010). Moreover, consumers are often willing to pay premium prices when purchasing online from brand name retailers (Ba and Pavlou 2002), despite the fact that identical products are available from smaller, lesser-known online retailers. The question is, why has the reality been so different from what was anticipated, and what does this imply about consumer behavior online? Although there are likely to be many other factors involved, one central explanation is that consumers are often highly suspicious when interacting with marketers on the Internet, which can cause them to seek additional assurances such as the confidence offered by dealing with larger, better-established firms (e.g., Yoon 2002). This assertion is in agreement with Reichheld and Schefter (2000, p. 107), who claimed, “price does not rule the web; trust does.” This chapter examines consumer trust and distrust online, including: (1) common definitions
and types of trust/distrust; (2) common factors known to increase online trust; (3) the prevalence
and likely origins of the consumer suspicion that seems to dominate online perceptions; and (4) traditional and contemporary consumer theories that are useful in understanding the effects of trust and suspicion on consumer evaluation and choice online. Central issues and potential areas for future research are highlighted throughout.
