Title: Risk-reducing signals for new online retailers: a study of single and multiple signalling effects

Authors: HsiuJu Rebecca Yen

Addresses: Department of Information Management, College of Management, National Central University, 300, Jung-Da Rd., Jung-Li City, Tao-Yuan, 320 Taiwan, ROC

Abstract: Despite the prevalence of electronic business in recent years, consumers continue to experience a high level of risk in shopping online. Building upon signalling theory, this study examines the effects of three signals (namely third-party endorsement, presence of physical store and clarity of warranty) on reducing perceived risk and enhancing purchase intention towards new e-tailers, using 280 subjects. This study also explores whether projecting multiple signals would produce stronger risk-reducing and purchase-intention effects than projecting fewer signals. A 2 × 2 × 2 experimental design is used to test hypothesised effects of the three signals. The analyses support the effects postulated for the three signals. Subjects receiving two or three signals have lower perceived risk and higher purchase intention than subjects receiving one or no signal. No significant difference is found between two- and three-signal experimental conditions. Finally, several implications for new e-tailers and future research directions are discussed.

Keywords: signalling theory; e-tailers; multiple signals; risk perception; risk-reducing signals; warranty; third-party endorsement; physical store; online retailing; internet marketing; internet advertising; risk reduction; purchasing intention; online shopping.

DOI: 10.1504/IJIMA.2006.012685

International Journal of Internet Marketing and Advertising, 2006 Vol.3 No.4, pp.299 - 317

Published online: 08 Mar 2007 *

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