GWALIOR

SEMINAR REPORT

ON

CUSTOMER TRUST IN B2C E-COMMERCE AND IMPORTENCE OF

SOCIAL PRESENCE

Submitted To: Submitted By:

Prof K.K.Pandey Alok Srivastava
Project Guide Adarsh Saxena
(Faculty, PIMG) Amardeep Sharma
M.B.A. I semester
 DECLARATION

We are, student of MBA I Semester of Prestige Institute of Management, Gwalior, hereby

declare that the seminar report titled “Customer Trust B2C E Commerce And Importance Of
Social Presence” is submitted by me in the line of partial fulfillment of course objectives of the
Masters of Business Administration Degree.

We assure that this project is the result of my own efforts and that no other institute for the award
of any degree or diploma has accepted it.

Date:
Alok Srivastava

Place Adarsh Saxena

Amardeep Sharma

MBA I semester
 CERTIFICATE

This is to certify that Alok Srivastava, Amardeep Sharma, Adarsh Sexena are student of MBA I
semester of Prestige Institute of Management, Gwalior, has successfully completed there
seminar report. They had prepared the report “Customer Trust B2C E Commerce And
Importance Of Social Presence” under my direct supervision and guidance.

Prof. K.K. Pandey

(Project Guide, PIMG)

 ACKNOWLEDGEMENT

It is a great pleasure for us to put on records our appreciation and gratitude towards Prof.
K.K.Pandey (Project Guide) for his valuable support and suggestion for the improvement and
editing of this project report.

Last but not the least we would like to thank all the faculties, friends and others who directly or
indirectly cooperated with me in completing my project report.

Alok Srivastava
Adarsh Saxena
Amardeep Sharma
MBA I semester
 CONTENTS

• Introduction

• Meaning of E Commerce

• Type of E Commerce

• Advantages and Disadvantages of E Commerce

• Barriers to E Commerce adoption in India

• Use of E Commerce In India

• Future of E Commerce

• Meaning of Customer trust

• Need of Customer Trust in E Commerce

• Meaning of social presence

• Importance of social presence

• Conclusion
 Introduction

The Internet has provided businesses of all sizes with opportunities to expand their market base,
improve operational efficiency, create new links with trading partners, and provide better
customer service, among other benefits. However electronic commerce (e-Commerce) has, in
many cases, failed to live up to its potential. In particular, business-to-customer e-Commerce
forecasts have been overly optimistic, where transactions have not reached a point of critical
mass.

A significant difference between online and offline shopping environments is that the later
encompasses a wide range of emotions involving various types of social interactions with
humans through multiple sensory channels. Kumar and Benbasat stress that in this era of new
retail, “shoppers have become guests, shopping has become an experience and malls have
become entertainment centers with communities”. On the other hand, most online stores tend to
exhibit little emotional or social appeal. The online shopping experience is primarily geared
towards reducing the user’s cognitive burden through functional and performance based Website
design heuristics. As such, e-Commerce may be viewed as lacking human warmth, since it is
more impersonal, anonymous and automated than traditional person-to-person commerce.
However, it has been suggested that creating a virtual shopping experience that will entice the
masses must engage both the cognitive and social sides of the user.

Recently, researchers have begun to explore this lack of human warmth on the Internet by
drawing on social presence theory. Social presence is the extent to which a medium allows users
to experience others as being psychologically present. It can also refer to the richness of the
media or the interactivity afforded by the media .Others stress the psychological connection,
where social presence is concerned with “warmth”. A medium is perceived to be warm if it
conveys a feeling of human contact, sociability, and sensitivity. Here we adopt the last
perspective on social presence, where the medium gives the user a sense of human warmth and
sociability.

Yet, it must be recognized that the application of trust to e-Commerce does not apply perfectly to
traditional business settings. Trust is an interpersonal determinant of behavior that deals with
beliefs about the integrity, benevolence, ability, and predictability of other people.

Such interactions, or even cues relating to them, are notably missing from e-Commerce
Websites. How then does trust relate to e-Commerce where there is no interpersonal interaction
and where there is no human agent toward whom this trust can be directed and on whose
behavior it can be based? Given these unique circumstances, this study examines which of the
established dimensions of trust in interpersonal relationships and in traditional Business-to-
Customer (B2C) commerce pertain to customer trust in B2C Internet vendors (e-Trust). In doing
so, this study extends the Familiarity and Trust Model of e-Commerce in the following manner:
it embraces a multi-dimensional trust construct rather than a single dimension of trustworthiness
to examine each dimension of trust on its own; and (2) it introduces a trust antecedent in the
model which taps into the perception that, despite the lack of interpersonal interaction, there is
still a sense of social presence on a Website.
This paper is organized as follows: the next section outlines various classification schemes for
categorizing online products, where an appropriate scheme is selected for the cross-product
research outlined in this paper. Next, the research model used in this study and corresponding
hypotheses are described, followed by an outline of the research method and the experiment
conducted to investigate the hypotheses. Analysis results are then presented, followed by a
discussion of the findings. Conclusions are outlined, indicating limitations for this study and
proposing areas for future research.

Meaning of E Commerce

Electronic commerce, commonly known as e-commerce or E Commerce, consists of the

buying and selling of products or services over electronic systems such as the Internet and other
computer networks. The amount of trade conducted electronically has grown extraordinarily
since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring
and drawing on innovations in electronic funds transfer, supply chain management, Internet
marketing, online transaction processing, electronic data interchange (EDI), inventory
management systems, and automated data collection systems. Modern electronic commerce
typically uses the World Wide Web at least at some point in the transaction's lifecycle, although
it can encompass a wider range of technologies such as e-mail as well.

In an increasingly competitive global marketplace, it is extremely important for businesses to

embrace the latest methods and trends to conduct their businesses. With the advancement of
technology, particularly the Internet, the world has discovered a new path of opportunities,
switching the transactions of traditional business models into a better model far superior in terms
of efficiency, productivity, profitability and competitiveness. This is where e-Commerce comes
into the picture in which is simply a short form for "Electronic Commerce". e-Commerce is
generally the "in-thing" today, which concept covers the global information economy which
include electronic trading of goods and services, electronic fund transfer, online procurement,
direct marketing, electronic billing, etc, through the internet via the computer. e-Commerce does
not change the core of businesses, which is to generate profitability from transactions, but it is to
change the mindset of how to go about generating profits through an efficient manner. This
simply means obtaining information at our fingertips, without wasting time, money and effort,
and also to conduct real time transactions in a "borderless world" 24 hours a day, 7 days a week.
With e-Commerce transactions, it is a Win-Win situation for the parties (both buyers and sellers)
participating in it. It offers distinguished benefits such as less overhead expenses, larger
advertising market exposure, and reduces middle man participation and all these benefits are
easily understood and quantifiable.

A large percentage of electronic commerce is conducted entirely electronically for virtual items
such as access to premium content on a website, but most electronic commerce involves the
transportation of physical items in some way. Online retailers are sometimes known as e-tailers
and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce
presence on the World Wide Web.

Type of E Commerce

There are type e commerce basic we seen in present time.

 • Business 2 Business E Commerce

• Business 2 Customer E commerce

• Customer 2 Customer E Commerce

• Customer 2 Business E Commerce

Business 2 Business E Commerce

Business-to-Business Electronic Commerce, also known as E-Business, is experiencing an

explosive growth rate on the Internet. Companies of all sizes and types are now mutually buying
and selling products and services on the Internet.

The original first stage of commerce on the Internet was that of E-Commerce, which business to
customer activities is. Business to business goes well beyond that popular form of customer
purchasing. It is intended to bring "Just In Time" concept to a greater height which allow
businesses to coordinate with its business associate for real time transaction and improving
efficiency and productivity for both organizations. Because Time is money; people are money,
good management of both means more money for the business and less expenditure on others.

B2B also offers unique benefits such as less human intervention, less overhead expenses, fewer
inadvertent errors, more efficiency, more advertising exposure, new markets and new physical
territories equate to an intelligent method of mutual business. It is a win-win situation for both
buyer and seller.

These are just a few of the benefits that B2B E-commerce can offer. It is already well accepted in
the business community, that the potential return of doing business on the Internet is far greater
than the investment. The bottom line is greater profits for the business.

Business 2 Customer E Commerce

B2C (Business-to-Customer) is basically a concept of online marketing and distributing of

products and services over the Internet. It is B2C (Business-to-Customer) is basically a concept
of online a natural progression for many retailers or marketer who sells directly to the customer.
The general idea is, if you could reach more customers, service them better, make more sales
while spending less to do it, that would the formula of success for implementing a B2C e-
commerce infrastructure.

Business-to-customer (B2C) electronic commerce enterprises are information-driven entities that

have some of the most extreme information technology solution requirement found in
commercial business world. From the moment B2C e-commerce Web sites go online, they must
provide the functionality, capacity, and continuous availability required for the potentially
millions of users accessing Web site content. These extreme functionality, capacity and
availability requirements apply whether the enterprise is a new e-commerce startup or the e-
commerce presence of an existing brick-and-mortar business.But are the millions of e-commerce
site users necessarily also site customers? Obviously not—site users can be anyone from casual
visitors, to advertising click-through, to targeted prospects, to actual customers. While traditional
brick-and-mortar commerce enterprises typically have no easy way to record and analyze user
behavior until they become customers, if even that, e-commerce enterprises can record and
analyze all activities of all types of users, all of the time.
The ability to record and analyze all site user behavior in minute detail gives e-commerce
enterprises a significant edge over brick and-mortar competitors who have little direct visibility
to the behavior of anyone besides actual customers.

The increased information processing requirements of the information-rich Web e-commerce

environment place special requirements on the information architecture of a B2C e-commerce
enterprise. These requirements and their corresponding solution are the subject of the rest of this
paper.

Customer 2 Customer E Commerce

Customer-to-customer (or C2C) electronic commerce involves the electronically-facilitated

transactions between customers through some third party. A common example is the online
auction, in which a customer posts an item for sale and other customers bid to purchase it; the
third party generally charges a flat fee or commission. The sites are only intermediaries, just
there to match customers. They do not have to check quality of the products being offered.

Customer 2 Business E Commerce

Customer-to-business (C2B) is an electronic commerce business model in which customers

(individuals) offer products and services to companies and the companies pay them. This
business model is a complete reversal of traditional business model where companies offer goods
and services to customers (business-to-customer = B2C).
This kind of economic relationship is qualified as an inverted business model. The advent of the
C2B scheme is due to major changes:

• Connecting a large group of people to a bidirectional network has made this sort of
commercial relationship possible. The large traditional media outlets are one direction
relationship whereas the internet is bidirectional one.

• Decreased cost of technology : Individuals now have access to technologies that were
once only available to large companies ( digital printing and acquisition technology, high
performance computer, powerful software)

Advantages and Disadvantages of B2C E commerce

Think of E Commerce and the first few features that strike any mind are – a global marketplace –
increased sales – increased profits! Not that you start claiming better margin of profit online, but
because various expenses relating to marketing, promotional material, order processing,
customercare, inventory management, information storage, telecommunications et al,
considerably slash down.

E Commerce offers tempting but economical boost to any size or kind of business. By opting for
E Commerce, you can expand your market margins to global horizons or squeeze them to highly
focused market segments, as per subjective business acumen and discretion. Even a small-scale
business offering quality and reliability with confidence can easily find itself brushing shoulders
with its esteemed competitors in least gestation period. It facilitates wishful manifestation of
your business entity – as grand and sophisticated as you wish it to be. Budget would not really
restrain you here from showcasing your attitude and essence through your website and online
shopping cart.

Things considerably simplify with E Commerce – be it changing prices listed on your web page
or customization of products; applying innovative business models or business process re-
engineering; implementing higher degree of specialization or enhancing productivity and
customer care – everything hardly takes time to implement/ incorporate and exhibit.

Not to mention, quality E Commerce services collect and manage valuable customer-related
information, including customer’s ordering patterns, to build a comprehensive customer
database. This database vitally sharpens your marketing and promotion strategies to be
remarkably on target.

As regards your business partners, E Commerce aids you in minimizing supply chain
inefficiencies,bringing about reduced inventory requirement and lessened delivery delays,
thereby rendering you more confident about your business collaborations with your suppliers and
service companies.

E Commerce inherently streamlines and automates the entire backend business process,
assimilating speed and efficiency to your business activities. As you introduce E Commerce
facility to your customers, you render their shopping experience highly fluent and convenient. E
Commerce seems all the more indispensable for your customers in the wake of consistently
shrinking time with them to spare for shopping offline. What’s more, online shopping lets your
customers reap benefits of online economies, as they often pay lesser price for identical products/
services available offline. E Commmerce-based business benefits the society as well! As your
onsite manpower requirement reduces, it lessens the burden on infrastructure and lowers demand
for elaborate office complexes and spacious parking lots.

As good as it may sound, E Commerce has its own share of obstacles too that hold it back from
assuming it’s full potential. To begin with, Internet in itself is still to touch the lives of a large
chunk of people as an integral way of life. There are tangible privacy and security issues that
keep people on guard, as they face a dilemma each time they need to divulge highly personal
information online, as and when they transact online.

Non-standardized protocols for certain processes, insufficient telecommunications bandwidth

and ever-evolving software tools (with incrementing versions), are some of the technical issues
that contain E Commerce from being a seamlessly integrated component of the contemporary
organizational IT systems.

While technical limitations are completely resolvable, non-technical issues including people’s
resistance to change and lack of trust for faceless and paperless transactions, is bound to take its
due time before it completely erodes. In fact, E Commerce is fast catching up with the rest of the
world, asUSA online markets lead them by example.

Barriers to B2C E Commerce adoption in India

• Limited Internet access among customers and SMEs (current level of internet usage is
low among businesses and users)
• Poor telecom and infrastructure for reliable connectivity (Internet connectivity slow,
access costs are high and connections are unreliable)
• Multiple gaps in the current legal and regulatory framework
• Multiple issues of trust and lack of payment gateways (privacy of personal and business
data connected over the Internet not assured; security and confidentiality of data not in
place

Use of E Commerce In India

According to the survey conducted among the Industry players, the E-Commerce Industry in
India was worth Rs 7080 crores at the end of 2006-07. Is it big enough? How much is it
expected to grow?

The adoption and usage of E-Commerce in the country is a function of the overall environment
for Internet usage in a country. To correctly understand the likely growth path for E-Commerce
in India it is imperative to understand the internet ecosystem in the country.

Some of the key variables that need to be understood are the proportion of computer literates,
internet penetration, frequency of access to the internet, purpose of internet access etc.
A correct mapping of these would help in understanding the overall framework of E-Commerce
in country.

A subset of Claimed Internet users, Active Internet Users are defined as those who have accessed
Internet at least once in the last one month. They are the regular users of Internet and are aware
of the recent trends and applications emerging on the Internet.

The population of Active Internet Users was 21 million in March 2006. As these Internet Users
mature with respect to exposure and awareness of internet, they tend to spend more time online;
access internet more frequently and surf non-communication based applications and advanced
online applications like gaming, E-Commerce, etc. However, as it is evident from the charts
below, E-Commerce is still not the key driver of the internet. Internet usage in the country is still
driven by email and information search.

Source: Active Internet Users, I Cube 2006, Syndicated Research of Technology

Group@IMRB, March 2006

year 2001 2003 2004 2006

Users in mn 4 7 11 21
However, the interesting part is that out of the 13.2 million internet users across 26 cities covered
in I-Cube 2006, (Syndicated Research of e technology group @IMRB International),14.2% use
the internet to buy travel tickets; 5.5% people do online shopping especially products like Books,
Flowers, Gifts etc. and 5% people deal in stocks and shares through the internet. Though the
percentage contribution of E Commerce is almost same over the years, however, the number of
Internet users using E-Commerce is growing rapidly.

Thus, E-Commerce is surely being adopted by the Internet users as a way to shop. They are
buying a variety of products online and visiting various websites to buy products from. Given the
rate of growth in E Commerce users, size of the E-Commerce industry is expected to reach Rs.
9210 corers at the end of 2007-08, a big jump of 30% over the current industry size.

According to the data, of total 21 Million Active Internet Users in March 2006 (Source: I-
Cube2006), around 53% have had looked for information on travel while 27% are likely to look
for information on travel services online. Though, only 10% of the Internet Users have booked
Air tickets rail tickets or hotel rooms in last six months, only, 22% are likely to avail these
services in the near future.

Except for Travel, percentage users looking for information and buying online is pretty low. For
instance, only 13% of the total Internet users have had looked for information on online
classifieds, however, only 2% of the total Internet Users have paid for availing any of the
services online. In future, only 3.4% of the total Internet Users interviewed is expected to avail
paid classifieds service online.

Source: Active Internet Users, I Cube 2006, Syndicated Research of Technology

Group@IMRB, March 2006

Category Sub category Looked Will look Bought Will buy

for for in last 6 in future
informati informati months
on on
Travel Railway ticket 31.62% 18.06% 8.25% 15.76%
Air tickets 16.62% 7.13% 2.39% 5.21%
Hotel reservation 5.41% 1.46% 0.26% 0.99%

Total 53.19% 26.65 10.90% 21.96%

Digital Ringtone download 18.58% 11.04% 2.11% 8.11%
download Game download 13.55% 8.54% 1.78% 5.85%
Music\ vedio download 11.54% 5.96% 1.42% 4.31%
Picture message \ 8.28% 5.14% 0.34% 3.37%
wallpaper download

Total 51.95% 30.68% 5.65% 21.64%

Classifields Matrimonial services 5.33% 2.16% 0.69% 1.34%

Jobs 7.77% 3.45% 0.95% 2.09%
Total 13.30% 5.61% 1.64% 3.43%

Food home provision & 8.04% 2.89% 0.32% 1.53%

grocery
Automobile(car/ 10.68% 4.27% 0.26% 2.08%
motorcycle) 7.43% 2.80% 0.18% 1.00%
Home appliances
(ac/fridge etc) 10.13% 4.74% 0.37% 2.51%
Computer /notebook
/laptop 6.76% 2.99% 0.35% 1.56%
Computer
peripherals(mouse,keyb 10.02% 5.57% 0.47% 2.84%
E- tailing oard etc) 12.76% 6.70% 0.53% 4.19%
Computer software 14.41% 9.05% 1.13% 6.64%
Cd / mp3 /vedio 7.73% 3.06% 0.90% 2.29%
cassets/ dvd. 9.00% 3.37% 0.70% 2.31%
Books 5.82% 2.68% 0.18% 1.68%
Cinema 3.54% 1.11% 0.05% 0.61%
Clothes / shoes etc. 2.80% 0.57% 0.19% 0.36%
Jewellery / watches etc 3.58% 1.01% 0.16% 0.30%
Cosmetic / perfume etc 1.89% 0.11% 0.06% 0.04%
Flower
Toy/game for kid
Sweet/ dry fruits
Total 124.48% 55.36% 6.34% 31.99%

Paid Paid content 2.89% 1.01% 0.08% 0.65%

content subscription :
subscription News ; videos ; reports

Total 2.89% 1.01% 0.08% 0.65%

Future of E Commerce

E-Commerce is the future of shopping. Thus, is would be apt to quote “The future is here. It's
just not widely distributed yet”- William Gibson

According to a new study from the Center for Research in Electronic Commerce, This is such a
dynamic field. Every day is a new day in the world of ecommerce. We see a lot of things, and
looking in the near future, e Commerce will become the industrial revolution of the 21st Century.

Certainly see happening is the decline of the revenue-share business model. E Business still has
huge untapped potential & continues to grow robustly and hosted providers have revenue-share
pricing models.

The Internet economy will continue to grow robustly; Internet users would buy more product and
buy more frequently online ; both new and established companies will reap profits online; and…

Safer Online Payment Systems

As the Internet becomes a safer place to transact, the amount spent by the Internet Users online is
bound to increase. Those apprehensive of divulging their credit card and bank details would be
active online shoppers. The Internet users are expected to buy high-end products like automobile,
property, home durables online.

Customization of content and offerings

As the internet users mature, the demand for customization will increase. The content would
adopt the regional flavors. More niches will be formed, seeking for offerings made for them and
content that meets their requirements.

Expanding User Base

Going at the current rate of growth in the Internet users transacting online, the user base for E-
Commerce is expected to rise expand exponentially. A large portion of the Internet population is
under the age of 35 years and is increasingly moving northwards as far as the purchasing power
is concerned. The uncanny nature of this segment “to use now and pay later” is going to play an
important part in the future growth of e commerce market. Be it picking new stocks or new
clothes, finding a job or a bride, the web way of doing things will gain precedence.

m Commerce

Currently E-Commerce is synonymous with PC and browser-based interaction. However, in the

near future GPRS-enabled mobile phones will rule the online transactions. Today, online
downloads to mobile phones is limited to low value services like music downloads, picture
message downloads and ringtone downloads. However, as the mobile users get more familiar
with buying online, the purchase of high-involvement products is expected to rise. Certain
verticals like Banking and Finance, Travel, Entertainment, and Retail are likely to drive the
growth of m-Commerce in the country.
 Meaning of Customer trust

In traditional commerce, trust is essential and may be created through direct interactions with a
salesperson, or more generally through the relationship established between the customer and the
vendor.
Moorman et al. (1993, p. 82) define trust as “a willingness to rely on an exchange partner in
whom one has confidence”. The establishment of trust and commitment are vital to the
exchange, and are dependent on developing shared values and effective communication. Specific
to Web-enabled retail interactions, numerous researchers have pointed out that online trust is
fundamental to online purchase intentions (Flavian et al., 2005; McKnight et al., 2004). Similar
to traditional shopping, trust is focused on customer confidence in the website as part of a buyer-
seller transactional exchange, and the customer’s willingness to rely on the seller and take
actions in circumstances where such action makes the customer vulnerable to the seller
(Jarvenpaa et al., 1999). Corritore et al. (2003, p. 740) provide a definition of online trust for
users interacting with transactional or informational websites that encompasses “an attitude of
confident expectation in an online situation or risk that one’s vulnerabilities will not be
exploited”. Further, these authors offer a comprehensive review of online trust and suggest that
individual trust has both cognitive and emotional elements. However, unlike the vendor-shopper
relationship established in traditional retail settings, the primary communication interface with
the vendor is an information technology artifact, the website. Nohria and Eccles (1992) suggest
the following conditions pose a threat to building online trust: absence of simultaneous existence
in time and space, absence of human network attributes (i.e. audio, visual, and sensual), and
absence of feedback and learning capability.

Need of Customer Trust in E Commerce

In research in which online trust is the primary focus, a multi-dimensional construct of trust is
most appropriate. For example, trust may be viewed as resulting from a customer’s belief that an
online vendor demonstrates ability, benevolence or integrity (McKnight et al., 2002).
Alternately, in studies such as this one when trust is one element included to better understand a
more comprehensive user reaction to a website, trust as a single construct has been used (Gefen
and Straub, 2003; Koufaris and Hampton-Sosa,

A good deal of research on trust is under way, with the potential to produce significant
understanding of e-commerce or other social phenomena. However, a clearer understanding of
what the term “trust” means is needed if the results are to be interpreted and compared across
disciplines. This paper justifies and specifies a conceptual typology of trust constructs. It then
defines the four resulting constructs and ten measurable subconstructs, and relates them to other
e-commerce concepts. Distrust constructs are separate from trust constructs , and lie outside the
scope of this paper. Distrust should be defined as the mirror-image opposite of trust .

Trust is a context-dependent multidimensional social concept whose relevant significant

dimensions depend on the circumstance of the interaction. And contains both behavioral
intentions and cognitive element, The behavioral intentions aspects of trust deal with behavior
that increases one’s own vulnerability to others under conditions of interdependence; the
cognitive aspects of trust deal with context-related beliefs about the trusted party that provide the
context and justification for this behavior. In general, research suggests that the cognitive aspects
of trust deal with beliefs that the
trusted party will behave ethically and will carry out expected commitments under conditions of
vulnerability and dependence .This form of trust, discussed at length in the next section, deals
typically with beliefs regarding the ability, benevolence, and integrity of the trusted party. Recent
research also adds predictability

Although research has found many other situation-dependent beliefs, the Erst three beliefs seem
to be common across many settings and play a central role in management studies of trust where
predictability is sometimes also added.

The distinction between the behavioral and the cognitive aspects of trust began with Deutsch’s
seminal study of trust in the Prisoners’ Dilemma game. Deutsch concluded that trust is a set of
expectations that lead to behavioral intentions that involve potential loss, because of the absence
of control over those upon whom one depends. Based on an extensive literature review, Gi4n too
defined trust as “reliance upon the characteristics of an object, or the occurrence of an event, or
the behavior of a person in order to achieve a desired but uncertain objective in a risky situation”.
This trust, explains Gi4n, typically consists of the three trust dimensions that were long ago set
forth in Aristotle’s Rhetoric: intelligence (corresponding to ability), good character (honesty and
integrity), and good will (benevolence).

Examining trust in social exchanges, Blau also concluded that trust contains three distinct
beliefs: integrity, benevolence, and ability. Schurr and Ozanne likewise define trust in this way.
Rotter also defined interpersonal trust as “an expectancy held by an individual or a group that
the word, promise, verbal or written statement of another individual or group can be relied on”.
Again, trust is defined as a situation-specific expectation or belief that determines behavior.
Luhmann, too, while not considering ability, made a distinction between the trust dimensions
dealing with integrity and those dealing with benevolence in his analysis of the role of trust in
social relations.

Trust is a relatively new concept in IS research. Examining virtual teams in the Internet
environment, Jarvenpaa et al. found that trust (termed “antecedents of trust” by Jarvenpaa et al.
consists of three distinct factors: ability, integrity and benevolence. These three beliefs affect the
members of virtual team’s trusting behavioral intentions, meaning their willingness to depend
upon other team members. In these virtual teams, integrity consistently had the strongest effect
on trusting intentions while the importance of ability decreased over time. Gefen, in the context
of e-Commerce, defines trust as a single dimension construct dealing with a customer’s
assessment that the vendor is trustworthy, based on Lehmann’s definition of trust as a social
complexity-reducing mechanism that leads to a willingness to depend on a vendor; this
willingness is derived from the perception that the vendor will fulfill its commitments. Also
based on Lehmann, a more recent study by Gefen dealing with ERP adoption, conceptualized
trust in a vendor’s technical support team as composed of the three dimensions suggested by
Gi4n integrity, benevolence, and ability.
 Meaning of social presence

Social Presence is the ability of learners to project their personal characteristics into the
community of inquiry, thereby presenting themselves as 'real people’ through the media of
communication Communities of Inquiry by Garrison et al at U of Calgary.

social presence is also called co-presence by Zhao, it's a term used in virtual reality or online
learning.Copresence is defined as consisting of two dimensions: co presence as mode of being
with others, and co presence as sense of being with others. Mode of co presence refers to the
physical conditions that structure human interaction. Sense of co presence, on the other hand,
refers to the subjective experience of being with others that an individual acquires in interaction.

Importance of social presence

The phenomenon studied was mostly an ongoing interpersonal interaction with another person or
organization over extended periods of time. Indeed, trust is typically built gradually through
extensive on going interactions that enable individuals to create reliable expectations of what
other persons or organizations may do.

This is interesting from the perspective of the current study because the lack of an interpersonal
interaction is a key defining characteristics of e-Commerce! This social context is an important
characteristic of trust. This is also a common theme in the trust-building behaviors discussed.
The reason is that trust, in general, is built through constructive interactions with other people
.Since human interaction with the trusted party, whether face-to-face or by any other means, is a
precondition of trust the perception of a high degree of social presence, implying direct or
indirect human contact, in the relationship should, arguably, contribute to the building of trust.
Certainly, deliberately avoiding the creation of a social interaction and making the relationship
devoid of a social presence, such as showing a “cold shoulder”, reduces trust [4]. Extending this
logic implies that another way in which trust in an ECommerce Website may be built is through
imbuing the medium of communication with a high social presence: the perception that there is
personal, sociable, and sensitive human contact in the medium.

In order to isolate the impact of product type on the influence of social presence, multiple
Websites were created for a fictitious clothing company (called myCloset.com) in the apparel
study and a fictitious electronics company (called myStereo.com) for this headphones study.
Fictitious companies were chosen to avoid any potential bias from previous branding. The
manipulated levels of social presence were offered incrementally. With this approach,
differences between the three groups for each product type could be directly attributed to the
increasing levels of social presence. This incremental design has been adopted by similar studies,
such as Schaffer & Hannafin .Burgoon et al. and Teo et al. Sample Web pages for the
headphones study. which shows the same headphones displayed with low, medium and high
social presence. Corresponding sample Web pages for the apparel study can be found in.

Simon notes that “information richness and social presence are closely related concepts”, and
that “information rich, customer oriented websites should help reduce ambiguity, increase
trust/reduce risk, and encourage users to purchase with lower levels of customer dissonance” (p.
26). Hassanein and Head (2006) showed higher user perceptions of social presence on websites
selling apparel to result in higher levels of trust in the online vendor. Gefen and Straub (2003)
conducted a study which confirmed that social presence resulted in trust within an e- Services
application.

Higher perceived social presence may also increase trust through its effect on increased
electronic communication, as shown in e-mail interactions. Communication is a necessary
ingredient of constructive interaction. Indeed, research has found that richer media, that is, media
higher in social presence, tend to be preferred in communications settings where the task is
ambiguous and uncertain (see Straub and Karahanna , for a meta-analysis of this work)
Social presence should also build trust through the perception that the vendor is displaying
through the Website a sense of personal, sociable, and sensitive human contact. From a customer
perspective, such attributes are clearly desirable. When dealing with customer queries and
grievances, they are even an expected aspect of any service or product. Hence, in accordance
with Luhmann’s and Blau’s observation that trust is increased when the trusted party shows
behavior or other indicators in accordance with one’s expectations, the perception that the e-
Vendor is embodying a high degree of social presence in the Website should increase customer
trust, to the degree that such indications are expected. This proposed, dynamic role of social
presence adds a new perspective because of the generally and inherently lower levels of social
presence in e-Commerce Websites.

Specific to Web-enabled retail interactions, numerous researchers have pointed out that online
trust is fundamental to online purchase intentions (Flavian et al., 2005; McKnight et al., 2004).
Similar to traditional shopping, trust is focussed on customer confidence in the website as part of
a buyer-seller transactional exchange, and the customer’s willingness to rely on the seller and
take actions in circumstances where such action makes the customer vulnerable to the seller
(Jarvenpaa et al., 1999).

Corritore et al. (2003, p. 740) provide a definition of online trust for users interacting with
transactional informational websites that encompasses “an attitude of confident expectation in an
online situation or risk that one’s vulnerabilities will not be exploited”. Further, these authors
offer a comprehensive review of online trust and suggest that individual trust has both cognitive
and emotional elements. However, unlike the vendor-shopper relationship established in
traditional retail settings, the primary communication interface with the vendor is an information
technology artefact, the website. Nohria and Eccles (1992) suggest the following conditions pose
a threat to building online trust: absence of simultaneous existence in time and space, absence of
human network attributes (i.e. audio, visual, and sensual), and absence of feedback and learning
capability.
 Conclusion

The impact of infusing social presence via the interface across commercial Websites selling
various product types. We found that perceived usefulness, trust and enjoyment are important
antecedents to online shoppers’ attitudes regardless of the type of product being sought by
consumers. However, higher levels of social presence have varying effects on these attitudinal
antecedents according to the product being sold online. Websites selling apparel (a product for
which consumers seek fun and entertaining shopping experiences) benefit from higher levels of
social presence. On the other hand, Websites selling headphones (a product for which consumers
primarily seek detailed product information) do not exhibit a positive effect from higher levels of
social presence.

These results confirmed our proposed hypotheses that infusing social presence through interface
design affects Websites for different product types to different degrees. From the open-ended
comments provided by the subjects, it was clear that apparel was better suited for socially-rich
online presentations, as the product itself evoked emotion and the socially rich design induced
positive feelings in addition to providing additional information (visualizing the product and
obtaining ideas for situations in which to use the product). In contrast, the comments on the
headphones Website stressed that the socially-rich presentations did not match the information
requirements (detailed product specifications) for a more technical product, and thus seemed
forced and inappropriate.

From a theoretical perspective, this study extends social presence research in the E Commerce
domain. Previous studies have explored the impact of social presence for email, online stores
selling apparel and online digital products (i.e. airline tickets) . However, this is the first study to
suggest that the potential impact of social presence varies according to the product/service being
sold on a commercial Website.

From a practitioner perspective, results from this study can have direct and immediate
implications for designers of commercial Websites. Online vendors selling apparel are
encouraged to consider infusing social presence in their Website design, as its potential impact is
positive for this category of products. Descriptions aimed at evoking positive emotions and
pictures that depict products with people in emotional and dynamic settings were shown to
significantly impact online shoppers’ perception of social presence . While some online vendors
(such as L.L. Bean and LandsEnd) currently incorporate a few social presence elements in their
Web pages (e.g. socially-rich pictures, human Web assistants, personalized avatars, “shop with a
friend” feature), currently most online offerings are functional with little or no social appeal. We
have shown that inducing a sense of social presence on a commercial Website can be an
immediate and attainable goal, potentially resulting in an improved online customer experience
for apparel products. On the other hand, vendors selling other types of products should be
cautious about adopting such an approach as it may not match the experiential requirements for
online customers seeking such products.

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