This study examines cross-cultural differences in thinking styles in the context of hybrid retailers (i.e., land-based retailers that augment their retail operations by creating online stores). Prior research indicates that consumers transfer retailer-related associations from hybrid retailers' physical to online stores and that trust in online stores is a critical factor in the online retail environment. Extending such findings, this study uses respondents from South Korea and the United States as representatives of holistic- and analytic-thinking cultures, respectively, and tests whether differences in thinking tendencies influence the transference of trust from hybrid retailers' land-based stores to their online stores. The study uses structural equation modeling to test online consumer behavior models and group differences. The results suggest that the role of trust is more pronounced in holistic-thinking cultures (e.g., East Asians) than in analytic-thinking cultures (e.g., Westerners). The results also show that transference of trust from hybrid retailers' land-based to online stores and the relationship between trust in and attitude toward hybrid retailers' online stores are greater for holistic thinkers than for analytic thinkers. The findings hold implications for research and practice and suggest directions for future research.
In the last decade and a half, a vast majority of land-based retailers have transformed into hybrid retailers by expanding into the online retail environment. In addition to managing the operational and strategic challenges associated with a dual-channel approach, understanding online consumer perceptions is of paramount importance for the success of these hybrid retailers (e.g., Wang, Beatty, & Mothersbaugh, 2009). Several studies identify trust as a definitive factor in influencing consumers' online perceptions and behavior (e.g., McCole, Ramsey & Williams, 2009) and note that, analogous to brand extensions, customers of hybrid retailers carry forward their retailer-related associations across channels (e.g., Kwon and Lennon, 2009 and Wang et al., 2009). However, little research exists on whether trust in a hybrid retailer's land-based store influences trust in and attitude toward the hybrid retailer's online store and, ultimately, purchase intentions in the online environment. Given the proliferation of hybrid retailers worldwide, an increased interest in retail globalization, and the diversity in global consumer markets, the role of trust in influencing online transactions in hybrid retailers needs to be addressed across cultures (e.g., Nijssen & Douglas, 2008).
Trust, the belief or expectation that a store will meet its commitments (e.g., Eastlick, Lotz, & Warrington, 2006) influences how consumers behave online (e.g., Ha & Stoel, 2009). Most consumers mention lack of trust as the primary reason for not transacting online (e.g., McCole et al., 2009). One stream of research suggests that trust formation occurs through a transference process in which beliefs about a known entity transfer to a lesser-known, yet related entity (Strub & Priest, 1976), with the process contingent on cross-cultural differences (e.g., Doney, Cannon, & Mullen, 1998). For instance, research on brand extensions suggests that transference of beliefs between closely related entities (i.e., from the parent brand to an extension) varies as a result of differences in thinking tendencies (i.e., the way a person perceives and classifies information) (Monga & John, 2007). Similarly, construing hybrid retailers' land-based and online stores as analogous to parent brands and extensions, this study examines whether consumers' thinking tendencies influence the effect that trust in hybrid retailers' land-based stores has on trust in, attitude toward and purchase intentions for the retailers' online stores.
Drawing support from the theory of reasoned action (TRA) (Ajzen and Fishbein, 1980) and research on thinking tendencies (e.g., Choi et al., 2003 and Nisbett et al., 2001) and brand extensions (Aaker and Keller, 1990 and Monga and John, 2007), this study develops and tests a framework that proposes that, for holistic thinkers (see Fig. 1, Model A), trust in a hybrid retailer's land-based store translates comprehensively into trust in the online store. In turn, trust in the online store influences attitude toward the online store and, ultimately, purchase intentions. In contrast, the framework proposes that, for analytic thinkers (see Fig. 1 Model B), trust in a hybrid retailer's land-based store influences both trust in and attitude toward the online store, with attitude toward the online store influencing purchase intentions. The results provide evidence of cross-cultural differences in the transference of trust from hybrid retailers' land-based to online stores and in the relationships among trust beliefs, attitude, and online purchase intentions. The findings yield key theoretical and managerial implications as well as directions for further research.
Focusing specifically on hybrid retailers, this study employs the Theory of Reasoned Action (TRA) and extends extant research on trust in the context of online retailing to investigate cultural differences in the formation of online purchase intentions. The results uphold the proposed models (see Fig. 1) and the arguments that the transference of trust from a hybrid retailer's land-based to online stores as well as the subsequent effects of trust in and attitude toward the online store vary across cultures. The following section provides a discussion of the relevant theoretical and managerial contributions. A detailed overview of the major findings of the study appears in Table 3.When land-based retailers transform into hybrid retailers by creating their own online stores, their online stores are analogous to brand extensions into the online retail environment, and as such, consumers are likely to carry their retailer-related associations across channels (e.g., Kwon and Lennon, 2009 and Wang et al., 2009). This study extends prior research by providing empirical support for the transference of trust from a hybrid retailer's land-based store to the retailer's online store. This finding is consistent with the transference theory of trust formation (Strub & Priest, 1976), which postulates that people assume a new entity to be trustworthy when they perceive the entity as being related to another trusted entity. In addition, the results show the existence of cultural differences in trust transference with holistic thinkers (i.e., East Asians) demonstrating greater levels of trust transference than analytic thinkers (i.e., Westerners). Holistic thinkers' preference for forming inductive inferences based on relationships between entities (i.e., “both stores belong to the same retailer”) may explain this difference. Collectively, the results on trust transference suggest that, regardless of culture, hybrid retailers must focus on developing and maintaining trust in their land-based stores and strive to establish relatedness between their stores to facilitate trust transfer. The cultural difference in trust transference suggests that well-known and trusted retailers will more likely succeed in engendering trust in their online stores in markets with predominantly holistic thinkers, whereas hybrid retailers in markets with predominantly analytic thinkers must identify complementary strategies to strengthen trust in their online stores. This finding, while new to the hybrid retailing literature, is consistent with a recent study on brand extensions (Monga & John, 2010) that concludes that familiar brands can extend more successfully into newer and unrelated product categories in holistic-thinking cultures than in analytic-thinking cultures.
Applying the TRA, prior research on online retailing demonstrates relationships among trust in an online store, attitude toward the store, and online purchase intentions (e.g., Ha & Stoel, 2009). This study's results lend further support to the established relationships between the aforementioned constructs while offering three interesting extensions based on cross-cultural analysis. First, the results support the relationship between trust in and attitude toward a hybrid retailer's online store. However, this relationship is stronger among holistic thinkers than analytic thinkers. Second, the results show that regardless of differences in thinking tendencies, trust in a hybrid retailer's online store exerts greater influence on attitude toward the retailer's online store compared with trust in the retailer's land-based store. Third, the results support the relationship between attitude toward a hybrid retailer's online store and purchase intentions but do not demonstrate any cultural differences pertaining to this relationship. Taken together, these findings offer important implications for hybrid retailers. Although hybrid retailers must build trust in their land-based stores for transference purposes, they must also develop appropriate strategies for maintaining and monitoring consumers' trust in the online store. Trust in a hybrid retailer's online store plays an important role in the formation of attitude toward the online store, which ultimately influences purchase intentions.
Regarding the total effects of trust and attitude toward the store on purchase intentions, the results show that trust exerts a greater influence on purchase intentions than attitude toward the online store among holistic thinkers. In contrast, attitude toward the online store exerts a greater influence on purchase intentions than trust among analytic thinkers. Simply stated, trust drives purchase intentions among holistic thinkers, whereas attitude toward the online store drives purchase intentions among analytical thinkers. This inference lends further support to the importance of developing, maintaining, and communicating trust in holistic-thinker markets. This finding also offers insight into why multinational hybrid retailers seek alliances and partnerships with well-known local retailers when entering holistic-thinker markets (e.g., Wal-Mart's Seiyu in Japan and Trust-Mart in China). Such partnerships might enable multinational hybrid retailers to gain acceptance among holistic thinkers, who are likely to categorize them along with the trusted local retailers. In addition, this finding also offers guidance to hybrid retailers whose online stores continue to struggle against those of pure Internet players in analytic-thinker markets (e.g., Barnes & Noble and Barnesandnoble.com versus Amazon.com). To compete effectively in online retail markets comprising analytic thinkers, hybrid retailers must realize that merely leveraging associations with their land-based stores may not be sufficient to engender purchase intentions for online stories and should concentrate specifically on improving consumers' evaluations of their online stores. To this end, hybrid retailers must make sure that their online stores facilitate consumers' shopping tasks and fulfill their shopping needs effectively (Wang et al., 2009). The adoption of an elaborative communication strategy (Bridges et al., 2000 and Monga and John, 2010) that reduces any negative evaluations and focuses on providing information on the online store's attributes and benefits might also be useful in influencing consumers' attitude toward hybrid retailers' online stores.
In both cultures, consumers' trust in the online retail channel (i.e., channel trust) plays a significant role on purchase intentions. Channel trust exerts the least significant influence on purchase intentions among holistic thinkers but the same influence on purchase intentions among analytic thinkers as trust in the land-based store (see Table 2). The relatively lower influence of channel trust among holistic thinkers could offer one explanation for their high propensity to shop online. Indeed, according to a recent report, 99% of South Koreans with Internet access have shopped online (Nielsen/Nielsen Online, 2008). However, the significant results on channel trust in both cultures indicate that perceived uncertainty regarding online transactions remains a critical issue across cultures. Therefore, hybrid retailers must continue to provide safeguards and assurances to online shoppers to build trust in online transactions. In summary, the results demonstrate considerable support for the existence of cultural differences in consumers' evaluation of online stores of hybrid retailers. From a theoretical standpoint, the study extends the literatures on online and hybrid retailing, trust, TRA, and consumers' thinking tendencies. From a managerial standpoint, the study offers actionable recommendations for customizing hybrid retailing strategies according to consumers' thinking tendencies. The following section discusses limitations and provides directions for further research.
