Online Retailer Reputation, Satisfaction, and Trust as Catalysts in the Consumer Perceptions of Ethics on Online Retailers and Repurchase Intention

Introduction

Ethics is normative beliefs concerned with doing the right thing in a given social situation (Wilson, 1975). The implications of ethics on marketing have drawn interest since the late 1960s, gaining momentum in the late ‘80s and early ‘90s (Agag, 2019). The explosive growth of e-commerce and internet usage in the 21^st century fuelled the possibility of unethical online business practices (Freestone & Mitchell, 2004; Ahamed et al., 2020); thus, in the present day, ethics, especially e-ethics or online ethics, have become significant in understanding e-consumer behaviour. There is a difference between the consumer’s and company’s perception of ethics (Crane, 2005), and we believe that the consumer’s ethical perception in online retailing offers a more nuanced explanation of the buying situation. Hence, understanding ethics from the consumers’ perspective is essential to understand the buying behaviour.

An ‘ethical brand identity’ presents the company as a citizen of society with rights and responsibilities (Alwi et al., 2017) and is a critical success factor for a retailer in a competitive online environment. A benefit of an ethical brand image is that it elicits a strong, positive emotional response from stakeholders and society and can enhance business performance, corporate brand equity and corporate sustainability. An ‘ethical brand identity’ is the earliest indicator of how the customer perceives the company’s ethical standards. Previous researchers found that consumers’ psychological state, attitude and behaviour derived from their online shopping experiences determined their subsequent perceptions, including those surrounding satisfaction, loyalty (Hsu et al., 2013) and buying intentions. Consumer response to shopping experiences can elevate a retailer’s online ethical practices. Román (2007) developed a comprehensive scale to measure consumer perceptions regarding the ethics of online retailers (hereafter CPEOR), which gave theoretical underpinning to much of the research conducted over the last decade and a half (Agag, 2019; Cheung & To, 2020; Limbu et al., 2012; Limbu et al., 2011). Younger consumers are more concerned about ethical purchases (Bucic et al., 2012), especially online (Lu et al., 2013). The perception of ethics may create a favourable reputation for an organisation or foster prosocial attitudes like trust and satisfaction, which, in turn, can stimulate buying intention. Previous research describes online ethics as a complex, multi-dimensional and highly abstract construct that plays a critical role in forming and maintaining long-term customer relationships (Agag, 2019; Román, 2007). Previous research has also indicated that ethical issues are determinants of consumers’ satisfaction with a website. Consumers’ ethical perception can increase the perceived relationship quality (i.e., satisfaction and trust), and ethics dimensions can have a positive effect on consumer satisfaction (Agag, 2019; Limbu et al., 2011; Nadeem & Al-Imamy, 2020). Most previous studies have linked CPEOR with positive attitudes like trust, commitment and satisfaction or favourable outcomes such as loyalty, repurchase intention and positive word of mouth. In short, ethics are the key to the success or failure of an organisation (Mella & Gazzola, 2015).

CPEOR can be indispensable in establishing a corporate reputation, an essential intangible resource for the retailer, and a financial performance enabler. Hur et al. (2014) found that corporate social responsibility (CSR) perception and corporate reputation are positively linked. Surprisingly, though the concepts of ethics and reputation have been discussed in the literature for several decades, there is not much known about their linkage (Mella & Gazzola, 2015), especially in relation to the e-retailing business. However, we believe that a subjective evaluation of the reputation of e-retailers’ websites is equally important and that the CPEOR and repurchase intention link has not been adequately prioritised in previous studies.