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Trust in the Internet Remains Ambiguous

Sales professionals have long been familiar with four types of risk that consumers must face, outlined in the box below

However, the Internet brings a new risk-–Identity risk. Companies such as,, and CD Universe know too well that if a Web site is to be successful, it must be trusted to protect consumers’ identities and personal information.

In January 1999, Cheskin Research and Studio Archetype/ Sapient released a study that identified factors that increase a consumer’s trust in a Web site. In a follow-up study, “Trust in the Wired Americas,” released July 2000, Cheskin Research further researched the online trust issue. The 2000 survey was conducted among 2,681 Internet users, including 1,837 from the U.S., 522 from Spanish-speaking Latin America and 248 from Brazil. This article will focus mainly on the U.S. respondents.

As part of the Cheskin study, respondents were asked a series of questions about:

• Privacy and trust online;

• Their most trusted Web sites;

• The most familiar seals of approval (e.g., VISA, TRUSTe etc.);

• Their online behavior; and

• Their demographic characteristics.

One of the findings of the study was that consumers are concerned about hackers breaking into corporate and government databases. The statistics show that U.S. consumers feel that their data is not protected.

No Rules

The study found that consumers feel that there are no rules governing how information is managed and protected on the Web. Therefore, consumers feel they are taking a risk when engaging in any online transaction. In fact, U.S. consumers believe that a phone call is more private than e-mail and instant messages.

However, it is interesting to note that consumers aren’t worried about the true Big Brother, that is the government, spying on them. Rather, U.S. consumers are worried that:

1. Hackers will break into corporate databases, and

2. Businesses, particularly marketers and advertisers, are watching them.

Some industry marketers believe consumers will trade privacy for a lower price. The Cheskin research found that this is true only for a portion of the population, those who consider themselves Internet experts, between the ages of 19 and 25.

There is little faith that the legal system or the government offers protection to individuals online. However, the primary reason for such low expectations is a belief that protection simply isn’t possible. But, fewer than one quarter of the sample strongly believe that they would be liable for 100% of the amount if someone used their credit card online without their permission.

Online Buying Behavior

While there are trust issues, consumers are still purchasing online. Approximately 75% of all survey respondents have made an online purchase. Books, music, video, and software are among the most popular products purchased.

Financial services are the least used, but may have the biggest potential, since financial service Web sites were among the most trusted.

The chart  “Overall Online Buying Behavior” shows percentages of total respondents who made purchases of various types of products.

The survey examined age, gender, income level, technical expertise and country of residence and found that some demographic influences are more significant than others. Overall, the results found that gender and country of residence have a stronger influence than age, technical expertise and income on consumer purchase behavior.

The role of “trust” in category purchase patterns seems less significant than the demographic differences themselves.

The accompanying charts show the influence of age and gender on buying behavior online.  Slightly more men, than women, over age 38, buy computer hardware, software and electronics, while women generally purchase more apparel and toys.

Ways to Build Trust

The 1999 study identified six factors that play a major role in communicating trustworthiness of a Web site. They are:

• Seals of Approval

• Brand

• Technological sophistication

• Navigation

• Presentation

• Fulfillment

(It is important to note that while these six components can defuse the four traditional risks of commerce they may not necessarily deal with the issue of identity risk.)

Since these six components can combine and interact with each other in infinite ways, the 1999 study focused on determining how three of them–brand, navigation and fulfillment–interact.

The 1999 study found that effective navigation and a well-known brand, when viewed as isolated elements, both communicate trustworthiness. Fulfillment, viewed in isolation, has relatively little impact. When the three are viewed as interacting elements, though, the picture changes. Strong navigation can best be understood as the foundation of communicating trustworthiness. Generally speaking, effective navigation needs to be joined to either a well-known brand or effective fulfillment for consumers to view a site as trustworthy. As long as effective navigation is one of two components in place, a site is significantly more likely to be considered trustworthy than a site with only one component in place, or a well-known brand with strong fulfillment, but weak navigation.

However, even when a site has a well-known brand, is easily navigable and offers a simple transaction process, it may not be considered more trustworthy than sites without all three components in place. For instance, a site with a well-known brand, strong navigation and strong fulfillment was found to be less trustworthy than a site of another well-known brand with poor navigation but strong fulfillment. In short, even if a company can combine a well-known brand, strong navigation and strong fulfillment, it can’t ensure that its site will be perceived as trustworthy if its brand isn’t considered trustworthy.

Since newer brands, by definition, are lesser-known, the only way they can compete with better-known brands is to make sure that both navigation and fulfillment work well. For these brands, navigation and fulfillment are equally important in building trust. As navigation or fulfillment improves, so does trust. The study found that for any site to be perceived as trustworthy it must, at minimum, have effective navigation. In addition, it needs to include either effective branding or simple fulfillment.

The Cheskin study found that as the Internet and e-commerce mature, their success will depend on how well they can gain and maintain consumer trust. Without trust, development of e-commerce cannot reach its potential. However, with increased security controls and solid business practices, such as excellent customer service and prompt order fulfillment, e-commerce can live up to its promise.

For more information about “Trust in the Wired Americas” or to view the entire study, visit Checking Research online at or call (650) 802-2100.

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