Ethics and Customer Loyalty:
Some Insights into Online Retailing
Services
Presented at 4th Biennial International Business
Banking & Finance Conference
June 23, 2011
Hilton Trinidad & Conference Centre
Trinidad & Tobago
Meena Rambocas & Professor Surendra Arjoon
Department of Management Studies, U.W.I. St. Augustine
INTRODUCTION
• The Internet : A viable retail channel
• The Internet: An environment for unethical
behaviour
• Ethical Retailing
AN EXAMPLE OF AN
ETHICAL DILEMMA
ETHICAL ISSUES
•
•
•
•
•
•
Privacy
Security
Deception
Reliability
Trust
Customer exploitation
CUSTOMER LOYALTY
• What is Customer Loyalty
• Customer Loyalty – A strategic tool
• Customer Loyalty- association with quality, customer
satisfaction, trust, brand affect and brand value
RESEARCH QUESTIONS
(1) What factors contribute to Customers Perception
of Online Retailers Ethics?
(2) Does Customers Perception of Online Retailers
Ethics have any effect on Loyalty?
RESEARCH METHODOLOGY
• Sampling Technique: Convenience sample
• Sample Size: 200
• Sample Selection Criterion: Purchase at least 1
item online over the last 3 months
• Survey Instrument: Self-Administered
Questionnaire
• Survey Scale:
– The Ethics scale : CPEOR scale
– The Loyalty scale: SERVLOYAL scale
DATA ANALYSIS:
DESCRIPTION OF SAMPLE
Gender
Sample
Male
38 %
Female
62 %
Age
Sample
Under 20
14
20-29
66
30- 39
11
40 and Over
9
Education level
%
Undergradate
61
Post Graduate
34
Post Graduate PhD
5
DATA ANALYSIS:
EXPLORATORY FACTOR ANALYSIS
• Reason for EFA
• Items retained for further analysis met the following
criteria:
– All inter-correlation coefficients were statistically significant
at a 95% level of testing
– Items did not load on more than two factors.
ROTATED FACTOR MATRIX
Re-Specification of the CPEOR
Model
.51
Security
Features
.71
.53
.73
Privacy
Policy
.35
Security &
Reliability
.59
Product
Availability
.71
.61
Ethics
.32
.67
.82
Customer
Loyalty
.87
Misleading
Tactics
.17
.94
Trust
.55
Advantage
of customer
.74
Customer perception of
Online Retailers Ethics
Model
Chi Sq
DF
GFI
AGFI
NFI
=
=
=
=
=
48.395
40
.958
11
.930
.940
DISCUSSION AND CONCLUSIONS
• Positive relationship between CPEOR ethics and
Customer Loyalty
• T&T’s CPEOR ethics dependent on :
– Security and Reliability
– Trust
DISCUSSION AND
CONCLUSIONS (Con’t)
Security and Reliability
• Privacy Policy
Trust
•Misleading Claims
•Security Features
• Product Availability
•Perceptions of being
exploited
13
SIGNIFICANCE OF STUDY
• Provide insights for online retailers targeting
Caribbean Customers.
• Identify key indicators Caribbean Customers
consider essential for online sites
• Provide an understanding of indicators that
contribute to Customers Perception of Online
Retailers Ethical Practices
LIMITATIONS & OPPORTUNITIES
FOR FUTURE RESEARCH
• Sampling technique
• CPEOR model and key performance
• Can ethical perceptions vary by demographical
and geographical consumer characteristics?
THANK YOU