“Is this store legit?” – How trustmarks can help online retailers build trust among consumers

female using credit card for online shoppingWhen was the last time you made a purchase online? More importantly, did you feel “edgy” or concerned at any time about your privacy, the security of your credit card details, or the fulfillment of the transaction? Maybe not so much if this was a purchase on Amazon, Gumtree, or a website of a bricks-and-mortar store that you visit. But what if this was a deal on a foreign e-commerce website, a pure-play online retailer … would you trust a “stranger”?

Online shopping increasingly popular

Statistics show that Australians increasingly adopt online shopping as a part of their daily lives, with online sales reaching 10% of total retail sales in 2018. According to the latest edition of the Inside Australian Online Shopping Industry Report, Australians spent $27.5 billion online in 2018, an increase of more than 24% compared to the previous year. And an increasing number of online purchases are made overseas. However, shopping online is not without problems. Media has reported that “online shoppers are increasingly at risk”. According to a 2017 survey by the NSW Department of Fair Trading, 39% of Australians face problems when buying goods and services online, including unexpected fees and goods being delivered late, damaged, or not delivered at all. And roughly 70% of consumers abandon their online purchases because they do not trust the retailer. So, how to you make your e-commerce site more trustworthy?

In a joined project with the University of Amsterdam, The Netherlands, and the University of Hohenheim, Germany, my co-authors and I investigate how the use of trustmarks impacts consumers’ trust, their risk perceptions, and, consequently, influences consumers’ willingness to purchase. You may say: trustmarks look good on your site, but do they actually make an impact or not? Industry studies have found that there is a positive correlation between trustmarks and increased conversions and sales. Our research confirms the benefits of trustmarks for online retailers. We offer four major insights that practitioners in our article “Trustmarks: Strategies for exploiting their full potential in e-commerce” published in the journal Business Horizons.

Display trustmarks prominently to establish initial trust

The importance of building trust cannot be overstated. While companies like Amazon and Australian bricks-and-mortar retailers are well-established brands, small and unknown pure-play online retailers face a much bigger challenge in establishing trust. Compared to certification authorities that simply authenticate an online retailer’s identity, trustmarks work as a signal to increase trust in an e-retailer. In particular, they can build initial trust at the beginning of the consumer journey with unfamiliar online vendors because they represent a seal of approval with regards to the reliability and credibility of the e-retailer. Our results show that for 70% of online shoppers, trustmarks are an essential determinant when making positive online purchasing decisions. This suggests that e-retailers who do not use trustmarks do not only miss a chance to build adequate levels of trust but, as a consequence, also lose out on sales.

Use trustmarks to reduce shopper anxiety across all landing pages

Consumers are exposed to a number of potential risks when they interact with a new and unfamiliar online retailer. Since they cannot rely on prior interpersonal trust at this stage, it is important to provide tangible cues that reduce shopper anxiety towards unfamiliar online vendors. We find that trustmarks work in multiple ways. In addition to building initial trust, they also reduce uncertainty which is a leading source of consumer’s anxiety of online shopping. Online retailers that use trustmarks are able to actively reduce perceived consumer risk and thus increase the likelihood that consumers engage in buyer-seller relationships. We recommend that e-retailers display their trustmarks on their home webpage or landing-page to reduce potential consumer’s risk perceptions from the start of the online shopping experience.

Select trustmarks from reputable and well-known sources

Our study shows that there are some trustmarks that are more readily recognized than others, whilst other trustmarks were barely, if at all recognized. We also find that knowledge of trustmarks among consumers is still relatively low. This provides some alarming evidence to suggest that marketers are not doing enough to educate consumers in what trustmarks stand for, or why they are used. We find that trustmark recognition strengthens the effect on perceived trust. Thus, selecting a trustmark provider that is recognizable by potential consumers is an important consideration; particularly for consumers whose scepticism and perceived risk in e-commerce is relatively high. 

Boost trustmark knowledge among consumers

We find that consumer knowledge of trustmarks has a positive effect on the relationship between displaying a trustmark and consumers’ perceived trust towards the e-retailer. This means the higher a consumer’s knowledge of trustmarks, the higher their levels of trust. Thus, e-retailers should provide more and detailed information about the function of trustmarks to educate potential consumers. By explaining the meaning of trustmarks, e-retailers can increase consumer knowledge and therefore also their perceived trust in web assurances.

Queen Street Mall shopping in BrisbaneAs the online channel becomes an integral part of the multi-channel strategy for most retailers, the dual strategy of building consumers’ trustworthiness and reducing the perceived risk of online transactions becomes vital to increase sales. Marketers are still struggling to implement these mechanisms correctly. Trustmarks can help online retailers to reduce shopper anxiety and improve their confidence along the purchase journey.

Dr Sven Tuzovic,
School of Advertising, Marketing and Public Relations, QUT Business School

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