A BENCHMARK ANALYSIS: EVALUATING FAIR TRADE E – RETAILING WEBSITES

(주)코리아스칼라
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2016.04.02
최종 저작일
2015.06
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발행기관 : 글로벌지식마케팅경영학회(GFMC) 수록지정보 : GFMC Session1
저자명 : Pielah Kim, Songyee Hur, Boram Park, Leslie Stoel

영어 초록

Introduction
In 2011, consumers spent $ 6.6 billion on certified fair-trade products, for a 12% increase worldwide (Thompson, 2012). Fair-trade is a social movement aiming to set fair prices for products, alleviate poverty, and assist producers and workers marginalized by the traditional economic model. Online stores have emerged as an effective marketing channel for fair trade products due to their ability to inform and reach a broad range of customers for very low cost. And this trend piques our interest in examining fair trade online stores. How do online fair trade retail stores rate in terms of usability? This is important because usability constitutes a key factor of online store quality. Usability refers to the perceived ease of navigating and/or making purchases through the retail website (Flavian et al., 2006).

Previous studies find evidence that the richness of information related to products, culture, and artisans are criteria for success in fair-trade business (Lee & Littrell, 2005). Incorrect and/or low quality information undermine consumer interest in ethical products and subsequently, reduce credibility of fair trade retailers and their products (Carrigan & Attalla, 2001; Maignan & Ferrell, 2004). Usability is a way to ensure information is presented in a manner that will engender the trust of consumers.

Trust is defined as the willingness of a consumer to be vulnerable to the actions of a retailer based on the expectation that the retailer will perform a particular action (cf. Mayer et al., 1995). Trust is known to be an antecedent in building relationships (Rotter, 1971). Fair trade retailers operating online stores must consider two types of trust. One type is customers’ trust toward fair trade retailers. To create such trust, fair trade retailers must convey that the marginal price differences between fair trade products and commercial products will be used to help producers (Castaldo et al, 2009), and must be transparent in communicating the operational processes underlying fair trade retailing.

The other type of trust is related to the website and reflects skepticism about completing transactions online (Gefen & Straub, 2003). Compared to a brick-and-mortar store, online customer’s trust is critical since a customer’s perceived risk in purchasing goods online can be reduced by trust (Ha & Stoel, 2008; Pavlou, 2003). Lack of social presence for an online store impedes development of a customer’s trust toward the retailer (Gefen & Straub, 2003).

Building upon the existing literature, we posit that a low level of usability, due to its role in developing online interactivity and engagement, will lead to lack of trust building, which is critical in promoting the sale of fair trade products. The purposes of this study are (1) to propose how usability, interactivity, and engagement can improve trust building, and (2) to provide empirical evidence of the lack of usability, interactivity, and engagement in current fair trade online stores. Website usability allowing consumer interactivity and engagement is an essential website attribute for formulating trust. Thus, the goal of this study is to provide suggestions for competitive e-retailing strategies for fair trade retailers based on results of a benchmarking study comparing websites of commercial and fair trade retailers.

Literature Review
Website Usability. Usability is created through the use of advanced website attributes that allow greater involvement of customers. Website usability not only influences consumer attitudes but also trust toward the website or company (Childers et al, 2001; Roy et al., 2001). Recently, scholars have suggested usability is related to engagement (Quesenbery, 2003). For instance, insufficient usability may be a factor in failing to engage consumers with the website; conversely, engagement can be sustained when attributes of usability meet user needs (O’Brien & Toms, 2008). Website usability may have a direct impact on enhancing interactivity.

Interactivity. Interactivity refers to the extent to which users can participate in communication, user control, and entertainment (cf. McMillan & Hwang, 2002). Based on this notion, two types of interactivity within the e-commerce context are examined: (1) website interactivity concerns the website design and attributes enabling consumer interaction with the site to make decisions and personalize content (Merrilees & Fry, 2003), and (2) social interactivity promotes ‘consumer-to-consumer’ and ‘consumer-to-company’ communicative interactions within virtual social space provided by the retailer (Chan & Li, 2010; Nambisan & Watt, 2011). The outcomes of interactivity are two-fold. First, interactivity promotes customer engagement with brands (Ha & James, 1998). Consumers’ interaction with other consumers and the company (via social interactivity) and navigating and personalizing the website (via website-interactivity) create psychological engagement with the company. Second, interactivity entices consumers to acquire greater amounts of information from the website, which subsequently has a positive impact on trust towards the online retailer (Ballantine, 2005; Chen et al, 2005). Consistent with this view, Merrillees and Fry (2003) claim that the level of perceived interactivity is a predominant determinant in constructing trust in the online domain.

Engagement. Consumer engagement behavior refers to the creation of an enduring and meaningful relationship between the company and the consumer (Doorn et al. 2010). Consumer engagement involves a highly interactive and experiential process. Highly engaged consumers integrate product knowledge and exchange information with other consumers (Borle et al. 2007). Engagement behaviors facilitate consumer trust towards products and the company (e.g. Pigg & Crank, 2004). Social engagement, the spontaneous information exchange among users, can justify one’s purchase decision. The consumer-generated content becomes a more trustworthy source of knowledge than the information promoted by the retailer (Chan et al., 2010). The relationship between interactivity and engagement is reciprocal. Consumers highly involved in engaging with others are likely to utilize more website attributes promoting interactivity.

Method
The data for this study were collected from 28 commercial apparel retailers and 22 fair trade apparel retailers based in the US. The 22 fair trade retailers consisted of 13 for-profits and 9 non-profits. The sample was selected based on previous studies (i.e., Lee, Geistfeld, & Stoel 2007; Halepete & Park, 2006; Park & Stoel, 2002), trade publications, and a Google search.

A binary measurement instrument was employed to categorize website content as either ‘available’ or ‘not available’ on both the commercial and fair trade store websites. In order to minimize any bias occurring from subjective evaluation of website content, two graduate students separately coded the data, and compared coding sheets. Differences were discussed until agreement was reached. Frequency counts were used to describe the availability of website and social interactivity related content. Chi-square analysis was used to identify statistically significant differences between commercial and fair trade online retailers.

Results
To assess website interactivity, we examined six attributes that facilitated convenience for consumers in locating information or customizing website content. They included (1) search engine navigation, (2) picture enlargement, (3) matching item suggestion, (4) log-in to own personal account, (5) styling suggestions by other consumers, and (6) picture rotation function.

Analysis (chi-square) confirmed significant differences in availabilities of search engine navigation, picture enlargement, matching item suggestion, and log-in to own personal account. Interestingly, only two commercial retailers and one fair trade company were equipped with a product or styling suggestion technology. The use of 360-degree view of products was not used by any of the sample companies [commercial retailers (n=0); fair trade retailers (n= 0)].

To assess social interactivity, we analyzed attributes that facilitate relationships. The attributes are categorized into the following dimensions: 1) social media utilization, 2) social commerce, and 3) customer engagement. We examined the following five attributes constituting social interactivity: 1) existence of social media sites including Facebook, Twitter, and YouTube, 2) consumer Facebook sharing, 3) link to other retailers’ websites, 4) online chatting, and 5) consumer review section. Analysis showed the differences between commercial and fair trade retailers were all statistically significant.

Conclusion & Implications
This study examined the differences between commercial and fair trade retailers to evaluate the current status of fair trade retailers in terms of interactivity and engagement in managing their websites. We identified attributes where fair trade retailers lagged and these could hinder trust development with consumers. We address three implications applicable to fair trade retailers, and more broadly, retailers selling ethical products.

First, website interactivity attributes that provide effective ways to communicate product, store and fair trade information are critical when the concept of fair trade is still unknown to a large segment of consumers. The focus of fair trade retailers should remain not only in delivering creative and high quality products, but also well-managed websites that can attract, educate, and engage consumers via interesting cultural products (Lee & Littrell, 2006). In doing so, advanced website interactivity attributes that enhance the convenience of online shopping, increase ease of navigation, and ensure competent delivery of information should be incorporated in fair trade company websites.

Second, the lack of use of social media by fair trade retailers is concerning. Word-of-mouth (WOM) communication is innate to social media, and encourages spontaneous communications among consumers. Utilizing various social media platforms is an efficient way to generate consumers’ voluntary exposure to fair trade products at a minimal cost. Encouraging customers to share WOM would be a natural path to increase engagement, and spread the concept of fair trade. Moreover, when a consumer spreads fair trade product information on his or her social media networks, the people who will be viewing the information have already established a relationship with him or her, and such messages are perceived to be more credible than information shared by the company or unknown strangers (Chu & Kim, 2011). In addition, virtual space inviting consumer feedback on the company website or social media sites can stimulate interactions with unknown consumers. The third person point of view by unknown consumers compared to fair trade retailers may be perceived to be unbiased, and consequently accepted as more trustworthy.

Third, the concept of social commerce, referring to the practice of featuring links of other company websites on one’s own website, is critical to enhance the overall visibility and traffic to fair trade e-commerce sites. The unique feature distinct to fair trade retailers is their shared use of ‘certified fair trade’ labeling. While commercial apparel retailers promote their brand to generate corporate profits, the vision of fair trade retailers is to promote their products to bring social welfare. Thus, the union of fair trade retailers and collective initiatives can create synergy. Integrating the concept of social commerce with collective initiatives is one practical way to achieve this objective. Considering this common denominator across fair trade retailers, the use of fair trade labeling and links to other fair trade retailers on the website will support greater exposure to potential consumers and engagement with diverse fair trade retailers.

Two major challenges fair trade retailers face are that: (1) their small size fails to generate economies of scale, and (2) due to the absence of national chains or organizations managing fair trade stores, brick-and-mortar fair trade stores are not evenly distributed geographically. Therefore, an interactive and engaging online presence for fair trade retailers is critical in resolving these limitations. It is a way to reach a large segment of consumers who do not reside around brick-and-mortar fair trade stores. We hope that interactivity and engagement will increase consumer exposure to fair trade retailers and ultimately increase fair trade sales.

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A BENCHMARK ANALYSIS: EVALUATING FAIR TRADE E – RETAILING WEBSITES