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Go Back       Himalayan Journal of Economics and Business Management | Volume 3 Issue 2 | April 10, 2022
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DOI : 10.47310/Hjebm.2022.v03i02.020       Download PDF       HTML       XML

Sustainability Image of Retail E-Commerce from Customer Perspective: Brand Identification, Word of Mouth, and Purchase Intention


Isanawikrama, Edwin Joyo Hutomo and Yud Buana

BINUS Entrepreneurship Center, Management Department, Bina Nusantara University, Jakarta, Indonesia 11480


*Corresponding Author

Isanawikrama


Article History

Received: 30.03.2022

Accepted: 05.04.2022

Published: 10.04.2022


Abstract: Consumers play an important role in increasing the growth of a company. That's because consumers act as the last service chain of products and services. Recently, consumers are increasingly paying attention to and incorporating sustainability images into purchasing decisions. Therefore, this research aims to examine and examine consumer perceptions and responses to retail e-commerce sustainability image. The sample used in this study was 129 respondents using the purposive sampling method. The sample used in this study are consumers who have purchased from e-commerce retailers in the last six months at least three times. Hypothesis testing was carried out using the structural equation model (SEM) method by using SmartPLS software. For further research, it is also possible to add and analyze additional factors that strengthen retail e-commerce’s sustainability image and influence purchase intention.


Keywords: Sustainability image, Retail e-commerce, Brand identification, Word of mouth, Satisfaction, Purchase intention.


INTRODUCTION

Interest in sustainability image has grown rapidly in recent decades (Purvis, B., Mao, Y., & Robinson, D. 2019). Industries around the world seek to respond to pressure from shareholders, governments, suppliers, communities, and consumers (Ferrero-Ferrero, I. et al., 2018). Consumers are one of the most important of a company because consumers buy products and services from the latter. In addition, consumers are increasingly paying attention to and incorporating sustainability images into purchasing decisions (Salvioni, D. M., & Almici, A. 2020). The development of technology that is now widely felt in the community is the emergence of many online business channels that usually use retail e-commerce and social media as platforms for conducting transactions.


Sustainability policies can signify the reliability and reputation of e-commerce retailers. This is very relevant because consumers often access information about sustainability image activities at the retailer when making purchasing decisions (de Oliveira Neto, G. C. et al., 2018). In particular, as online shopping has become a necessary trend in today's society, consumers increasingly have higher expectations about socially responsible behavior from e-commerce retailers (Lee, J., & Lee, Y. 2019), plus consumers who perceive that retail conveys sustainability image signals are more likely to engage in word of mouth (WOM), which therefore affects consumer intentions to buy products (Jacobsen, S. 2018).


E-commerce retail sustainability image activities can shape consumer attitudes and behavior. Consumers may show trust and confidence in these retailers (Lăzăroiu, G. et al., 2020). In addition, consumers may have positive attitudes and optimistic beliefs about these retailers because the former believe that the latter seeks to bring goodwill and benefits to consumers and the whole society (Aljukhadar, M., & Senecal, S. 2021), furthermore, when consumers hear or see information that positive about e-commerce retail sustainability image, consumers tend to share this information on social networking sites and recommend it to others (Shen, H. et al., 2020). That is, consumers often identify with e-commerce retailers who are involved in sustainability image activities (Yoon, Y. et al., 2021). When consumers identify with these e-commerce retailers, as a result, consumers will spread positive information and buy additional products and services from e-commerce retailers. In addition, consumers recommend and advise their friends to buy from these e-commerce retailers because consumers believe in these retailers (Jacobsen, S. 2018).


Previous research discussed the e-commerce retail sustainability image variables, brand identification, WOM that affect purchase intention (Helm, S. et al., 2020). There are not many studies that examine the effect of e-commerce retail sustainability image on purchase intention mediated by brand identification, WOM, and satisfaction, so there is a need for additional variables to add factors that influence purchase intention. Previous researchers suggested the addition of variables that affect purchase intention (Dang, V. T. et al., 2020). As a development of the results of previous studies, this study adds a satisfaction variable as a factor that influences purchase intention (Carlson, J. et al., 2021).


LITERATURE REVIEW

Understanding the antecedents and consequences of the variables used, this study explains based on the literature review according to references from previous scientific research. Its embodiment and elaboration are described as follows.


Sustainability Image of Retail E-Commerce

Sustainability image is a form of action that departs from the company's ethical considerations aimed at improving the economy, which is accompanied by an increase in the quality of life for employees and their families, as well as improving the quality of life for the surrounding community and the wider community (Fiksel, J. 2017). The point is that sustainability image is defined as a company's commitment to continuously act ethically, operate legally and contribute to economic improvement, along with improving the quality of life of employees and their families as well as improving the quality of local communities and the wider community (Dunstone, R. 2013). This obligation can also be interpreted as the company being obliged to be responsible for the impact of the company's activities, both positive and negative impacts. The positive impact of the company's existence is that it is beneficial for economic, social, and environmental improvement which can be realized in the form of improving infrastructure, welfare, social order, science and technology. The negative impacts are discrimination, social inequality, relocation of small communities due to being used for company industrial areas, causing some people to lose their jobs and homes, environmental pollution, pollution, global warming and the like (Fiksel, J. 2017).


E-commerce retailer sustainability image is a more specific part of sustainability itself (Hielscher, S., & Will, M. G. 2014). sustainability is a concept where companies incorporate social and environmental issues into their business and e-commerce retail interactions with stakeholders voluntarily. Meanwhile, e-commerce retailers' sustainability image as socially and environmentally responsible behavior is integrated into business and in its interactions with various people and becomes a consideration for making purchases (Dang, V. T. et al., 2020). The sustainability image itself consists of 5 indicators (Mercade Mele, P. et al., 2019). First, balancing and relationship between sustainability image objectives is a balance and relationship between goals, market logic that drives a balance towards profit maximization, and social goals that the environment is seen as an instrument for economic goals. Second, system boundaries are system boundaries where market logic encourages companies to set boundaries in accordance with market references and expectations. Third, stakeholder engagement is the involvement of stakeholders/shareholders from a market perspective. Stakeholders/shareholders who will be involved must be chosen strategically because they will influence the company. Fourth, collaborations and alliances are where market logic makes organizations focus on actors who can increase company profits with an instrumental view and increase legitimacy. Fifth, accountability and reporting is the last dimension of sustainability image where market logic links socio-environmental responsibility and reporting with the company's reputation because it can serve as a medium for stakeholders who have power over the company such as socially responsible investors.


Brand Identification

Brand identification is defined as the psychological condition of a consumer in feeling, exploring, and assessing his ownership of the brand (Acharya, A. 2020). Brands are very important to building relationships with consumers in establishing or determining business success in the long term. Brand identification by consumers leads to a sense of individual similarity with the brand (Rugkhumkaew, S., & Ching Tan, C. 2016).


Brand identification significantly increases consumer behavior, such as positive WOM, recommending the brand to relatives, and other supportive behaviors that will benefit the company (Hollebeek, L. D. 2011b). Brands have become one of the triggers that influence consumer behavior because consumers can carry symbolic meanings that can be used by consumers to increase their sense of self, build identity (individual or social), and achieve self-representation goals. The brand identification indicators include consumer perceptions, reflecting self-image, having a relationship with the brand, creating meaning, realizing what is believed, and having an important role (Hollebeek, L. 2011a). Brand identification contains 3 indicators (Dang, V. T. et al., 2020). First, perceived Quality is the consumer's perception of the quality or superiority of a product or service that is in accordance with consumer expectations. Second, self-brand congruity is defined as the similarity of personality between self and brand. Third, consumer innate innovativeness means consumer innate innovation which has a sense of being easily influenced to buy new and different goods or services compared to sticking with the previous brand.


Word of Mouth (WOM)

Word of Mouth (WOM) is more trusted by potential consumers than direct sales by a salesperson. The superior point of WOM lies in its superiority in spreading a recommendation (Mehdikhani, R., & Valmohammadi, C. 2021). WOM is communication that contains information in the form of reviews or testimonials made by consumers in discussing a product or service (Wing Kuen, E. S. T., & KW, K. H. 2014). WOM is referred to as the exchange of information related to products between consumers and is considered a force or factor that influences consumer behavior, it is a process of creating awareness of a brand and also the basic values of a brand. products (Chu, S. C., & Kim, Y. 2011).


Word of mouth (WOM) has been well recognized in the consumer behavior literature as a type of informal communication that influences consumers' purchasing decision-making processes (Anastasiei, B., & Dospinescu, N. 2019). Electronic word of mouth (eWOM) has emerged with the advent of information technology (Velazquez, B. M. et al., 2015). eWOM has been defined as “any positive or negative statement made by a potential, current or former customer about a product or company that is made available to many people and institutions via the internet” (Anastasiei, B., & Dospinescu, N. 2019; Chu, S. C., & Kim, Y. 2011).


Satisfaction

The word satisfaction comes from the Latin word "satis" which means quite good, adequate. while "facio" means to do or make (Paul, J. et al., 2016). Satisfaction is an expression of feelings of joy or disappointment from consumers that arise after comparing the facts and expectations of these consumers (Wu, H. C. et al., 2018). Satisfaction is a combination of one's feelings or attitudes in responding to various factors that affect certain situations, usually in information management and personal satisfaction is a measure of the success or effectiveness of information systems (Tussyadiah, I. P. 2016).


Satisfying customer needs and wants has become a business mantra to retain and increase the expenses of existing customers (Famiyeh, S. et al., 2018). Customer satisfaction shows the extent to which customer expectations are met for a particular product or service. Thus, satisfaction is about the customer's assessment of how effectively the product and the performance of its attributes have met the needs and desires of consumers (Susanti, Y. F. et al., 2018). Satisfaction is a feeling that is caused by someone, whether it is happiness or disappointment when comparing something that is felt to a product or service based on expectations. If the perceived experience is further than expectations, the customer will feel dissatisfied. Currently, companies must pay attention to the level of customer satisfaction. With the internet, it is possible for customers to more quickly express good and bad emotions (González-Mansilla, Ó. et al., 2019). Customer Satisfaction is a concept that has a big influence and becomes an important reference in the world of marketing (Rankin, Y. A. et al., 2009). Then, if consumers are satisfied with the product, brand, or food service, interest will arise to make a purchase and share their experiences with those closest to them.


Purchase Intention

Purchase Intention is broadly defined as something that predicts the purchase. Purchase intention represents the opportunity that someone will buy or use certain products or services based on the interaction between consumer needs, attitudes, and perceptions of a brand (Wekeza, S. V., & Sibanda, M. 2019). groups or organizations to assess, obtain and use goods and services through the exchange or purchase process with a decision-making process that ensures these actions (Kim, H. Y., & Chung, J. E. 2011).


Purchase intention is a psychological aspect that stimulates the urge to motivate someone action to buy a product. Purchase intention or purchase intention is showing the possibility that consumers are willing to think about purchasing a product or service, representing a person's willingness to buy in the future (Wang, Y., & Hazen, B. T. 2016). Purchase intention can be measured using the following indicators. The first is the willingness of consumers to make a purchase. The second is the will of consumers to make purchases in the future. Third, is the consumer's intention to carry out repeat purchases (Balaji, K., & Maheswari, R. 2021).


Purchase intention is something that has a correlation with consumer intentions to buy certain products that are needed in a certain period (Olšanová, K. et al., 2021). Consumer behavior appears in response to objects that indicate a person's intention to make a purchase. In detail, the purchase intention stage is the AIDA model (Ahmad, W., & Zhang, Q. 2020). Attention initiates a product or service that is suitable for the needs of potential consumers, apart from that, potential consumers also learn about the products or services offered. Interest shows that consumers are interested in buying products or services, after knowing more detailed information about these products or services. Desire occurs when consumers begin to consider and discuss the products or services that have been offered because the intention to buy has begun to appear, this phase usually begins with the emergence of strong interest from potential consumers to buy and try the services offered. Action, as the last one, shows when consumers already have a strong intention to buy or use the services offered.


HYPOTHESIS DEVELOPMENT

Business companies that carry out socially responsible activities are often regarded as good entities in the eyes of society (Yoon, Y. et al., 2021), consumers express increased trust and willingness to buy products and services from brands that implement a sustainability image (Lee, J., & Lee, Y. 2018). Consumers are increasingly paying attention and incorporating sustainability image into purchasing decisions when consumers have an optimistic attitude and trust socially responsible online consumers, consumers tend to buy products and services from these retail e-commerces (Caputo, F. et al., 2018). Therefore, the following hypothesis was developed.

H1. Online Retail Sustainability Image positively affects Purchase Intention.

Society and consumers are increasingly showing great interest and willingness to support retail e-commerce companies that are involved in sustainability image activities (Duffett, R. et al., 2019). Retail e-commerces that carry out sustainability image activities can increase consumer perceptions of these retailers regarding social and environmental concerns and actions that benefit consumers and the entire community (Olšanová, K. et al., 2021). Thus, consumers can view such retailers as good companies that deserve to be admired and trusted (Mercade Mele, P. et al., 2019). consumers can identify themselves with the retail e-commerce, brand image and feel safe when buying products and services from retail e-commerces (Chipp, K., & Verran, G. 2015). In addition, when consumers trust and feel a sense of belonging to socially responsible retailers and create emotional attachments, they can form between consumers (Mehdikhani, R., & Valmohammadi, C. 2021). Thus, consumers express a high interest and preference for that retailer and may be motivated to invest additional time and effort in purchasing products and services from that retailer (Castro, V. A., & Giraldi, J. D. M. E. 2018). That is, consumers identify themselves with socially responsible retail e-commerces. As a result, consumers are motivated and willing to buy products and services from those online. Several relevant studies (Scandelius, C., & Cohen, G. 2016) have empirically confirmed the mediating role of brand identification in the relationship between perceived sustainability image and behavioral outcomes (eg behavioral loyalty). Thus, the following hypothesis was developed.

H2. Online Retail Sustainability Image positively affects Purchase Intention mediated by Brand Identification.

Sustainability image can act as a positive signal that builds a retail reputation in the eyes of consumers (Mercade Mele, P. et al., 2019). By giving a positive signal to the public, retail can influence consumer perceptions and facilitate conveying and spreading messages about image and reputation (Hielscher, S., & Will, M. G. 2014). That is consumers who perceive that retail conveys sustainability image signals are more likely to engage in WOM, which therefore affects consumer intentions to purchase products (Chen, X. et al., 2020). Retail e-commerce can use sustainability image as an effective signal to convey information about their socially responsible behavior to the public and consumers (Sun, H. et al., 2020). When consumers feel that retail e-commerce benefits consumers and society, consumers tend to trust retail e-commerce (Rupp, D. E. et al., 2018). Consumers are also willing to praise and recommend this retail e-commerce to their friends to buy products and services (Lerro, M. et al., 2019). Furthermore, when consumers hear or see positive information about retail e-commerce sustainability image, consumers tend to share this information on social networking sites and recommend it to others as a result, consumers tend to buy products and services from socially responsible retailers because consumers may hear and accept recommendations from others (Olšanová, K. et al., 2021).

H3. Online Retail Sustainability Image positively affects Purchase Intention mediated by WOM.

When consumers admire and hold positive attitudes about a brand, consumers tend to share information about or recommend this brand to their friends and others (Vinh, T. T. et al., 2021). Consumers also tend to buy products and services from preferred brands (Mishra, A., & Satish, S. M. 2016). Therefore, consumers often identify with retail e-commerces who are involved in sustainability image activities. When consumers identify themselves with these retail e-commerces, as a result, consumers spread positive information and buy additional products and services from retail e-commerces. As previously stated, involvement in WOM increases purchase intention (Mehra, P., & Mishra, A. 2021). Therefore, the following hypothesis was developed.

H4. Brand Identification positively affects Purchase Intention mediated by WOM.

Corporate sustainability image affects consumer buying interest, either directly or indirectly through consumer identification with the company (Mercade Mele, P. et al., 2019). Therefore, customer satisfaction may be more closely related to sustainability image activities. Satisfaction is a desire that arises for performance and expectations, if performance is beyond expectations then consumers are not satisfied so is the opposite. If performance meets expectations, then consumers are satisfied, while when performance exceeds expectations, consumers are happy or very satisfied and generate purchase interest (Anastasiei, B., & Dospinescu, N. 2019). Customer satisfaction has a positive influence on purchase intention. There has been no research that has examined the Online Retail sustainability image has a positive effect on purchase intention mediated by satisfaction (Lăzăroiu, G. et al., 2020). Therefore the following hypothesis was developed.

H5. Retail E-commerce Sustainability Image positively affects Purchase Intention mediated by Satisfaction.

Since consumers understand and identify with retail e-commerce, they tend to express consumer preferences and support for retail by purchasing additional products and services, because consumers believe that retail e-commerce benefits the public, and consumers have positive attitudes about retail e-commerce (Kavas, E. 2020). In this context, consumers tend to praise and recommend consumers friends and others to buy and use products and services.


METHODOLOGY

A self-administered questionnaire was used to collect data from respondents using a convenient sampling technique. The criteria of the respondent to be met are consumers who have purchased from e-commerce retailers in the last six months at least three times. In accordance with the research context, measures of indicators were adopted to ensure the reliability and validity of the survey instrument, representing all the constructed, technopreneurial orientation and sustainability. Due to the respondent's unknown population, a 5-10 times sample of indicators is taken (Hair Jr, J. F. et al., 2017). Those were distributed electronically (online) with 129 answered. The indicator employs a 5-point Likert scale response, with a score of 1 for strong disagreement and a score of 5 for a strong agreement. The explanatory research investigates the determination of characteristics. The research object is identified from a number of analytical activities and research samples to be carried out by this study (Leedy, P. D., & Ormrod, J. E. 2015). This research was using software to perform structural equation modeling analysis with a partial least-squares approach (PLS-SEM).


RESULT

The first hypothesis examines the positive effect of retail e-commerce sustainability image on purchase intention. The results of this study indicate that retail e-commerce sustainability image positively affects purchase intention. The results of this study support the results of previous research which states that retail e-commerce sustainability image positively affects purchase intention (Dang, V. T. et al., 2020). So, when consumers have an optimistic attitude and trust socially responsible retail e-commerces, consumers tend to buy products and services from these retail e-commerces (Aljukhadar, M., & Senecal, S. 2021).


The second hypothesis examines the positive effect of retail e-commerce sustainability image on purchase intention mediated by brand identification. The results of this study indicate that retail e-commerce sustainability image does not positively affect purchase intention mediated by brand identification. The results of this study support previous research, which stated that retail e-commerce sustainability image positively affects purchase intention mediated by brand identification (Dang, V. T. et al., 2020). That is, consumers identify themselves with socially responsible retail e-commerces as a result, consumers are motivated and willing to buy products and services online.


The third hypothesis examines the positive effect of retail e-commerce sustainability image on purchase intention mediated by WOM. The results of this study indicate that retail e-commerce sustainability image positively affects purchase intention mediated by WOM. The results of this study support previous research, where it was stated that retail e-commerce sustainability image positively affects purchase intention mediated by WOM (Dang, V. T. et al., 2020). That is, when consumers perceive retail e-commerce as a good socially responsible company, consumers will show a willingness to spread positivity and purchase additional products and services from retail e-commerce (Helm, S. et al., 2020).


The fourth hypothesis examines the positive effect of brand identification on WOM-mediated purchase intention. The results of this study indicate that brand identification positively affects WOM-mediated purchase intention. The results of this study support the results of previous research, which stated that brand identification positively affects WOM-mediated purchase intention (Dang, V. T. et al., 2020). The higher the brand identification owned by consumers, the higher the level of purchase intention mediated by WOM, therefore the higher the brand identification perceived by consumers, consumers tend to recommend the brand or retail e-commerce to friends and buy products from these retail e-commerces (Kim, H. Y., & Chung, J. E. 2011).


The fifth hypothesis examines the positive effect of retail e-commerce sustainability image on purchase intention mediated by satisfaction. The results of this study are different from previous research, which states that retail e-commerce sustainability image has an effect on purchase intention but does not place satisfaction as a mediating variable (Dang, V. T. et al., 2020). Therefore satisfaction has a positive influence on purchase intention. The results of this study indicate that retail e-commerce sustainability image positively affects online purchase intention mediated by satisfaction (Kim, H. Y., & Chung, J. E. 2011). This means that the more retail e-commerce companies pay attention to sustainability image, the higher the purchase intention mediated by satisfaction.


DISCUSSION

The managerial implication that can be used to increase purchase intention is the manager's effort to increase purchase intention by increasing the retail e-commerce sustainability image. How to increase retail e-commerce sustainability image retail e-commerce managers can increase retail e-commerce investment in sustainability image activities. Retail e-commerce managers need to realize that a sustainability image has an influence on consumers' purchase intentions. When consumers feel that the retail e-commerce has environmentally-friendly policies and cares about the local community, such as reducing plastic consumption in package delivery from the retail e-commerce, or such as focusing more on supporting local MSMEs, consumers tend to be more interested in buying from the retail e-commerce in the future.


Managers can improve the image of retail e-commerce sustainability and increase purchase intent by incorporating brand identification. Managers must consider ways to make consumers feel like they are a part of the retail e-commerce experience, one of which is to involve consumers in the campaign that will be run. Thus, once the company has implemented sustainability image and consumers have felt that they are participating in sustainability image activities, consumers will feel that they are part of companies that run sustainability image, and these consumers will tend to buy from retail e-commerces that run sustainability image in the future.


WOM can help managers increase purchase intent and improve the image of retail e-commerce sustainability. Managers need to consider how to get consumers to tell the retail e-commerce to their friends such as choosing the right and accurate media according to the goals of the retail e-commerce, by displaying a positive reputation and a good image. Retail e-commerces can also encourage consumers to discuss, comment on, and disseminate information about their products and services to the larger community and colleagues, so that when retail e-commerces carry out sustainability image activities and choose the right media to inform their sustainability image activities. These retail e-commerces have encouraged consumers to discuss and talk about positive activities carried out by retail e-commerce. With a positive image due to sustainability image activities published by the company, consumers will be more likely to buy from these retail e-commerces in the future.


Managers can strengthen brand identification and increase purchase intent by implementing WOM. Managers must assess what customers tell retail e-commerce and how to make consumers feel like retail e-commerce is a part of them, such as by launching a campaign that invites consumers and their colleagues to a joint event. Working together to spread a positive message or collaborating with the community to contribute to the campaign are examples of collaborative efforts. As a result, when customers feel like they are a part of the company because they have participated in the company's operations, they tend to tell their colleagues and give a positive impression to their colleagues, so consumers who tell and hear tend to buy in the future.

Managers can improve the perception of retail e-commerce sustainability and increase purchase intent by incorporating satisfaction. Managers must ensure that online reviews in retail e-commerce are appropriate, such as following the product quality. As a result, when consumers are aware of the sustainability image activities carried out by retail e-commerces, they usually learn about retail e-commerce, and it turns out that the online reviews contained in the retail e-commerce are consistent with the fact that consumers tend to buy from the retail e-commerce in the future.


CONCLUSION

Based on the results of research and discussion obtained in previous chapters, it can be concluded that all the variables in this study influence purchase intention, in the first hypothesis retail e-commerce sustainability image has a positive influence on purchase intention. In the second hypothesis, it is also found that there is a positive influence of retail e-commerce sustainability image on purchase intention mediated by brand identification. In the third hypothesis, it is found that there is a positive influence of retail e-commerce sustainability image on purchase intention mediated by WOM. In the fourth hypothesis, it is also found that there is a positive influence of brand identification on purchase intention mediated by WOM. There is a positive influence on retail e-commerce sustainability image on purchase intention mediated by satisfaction.



This study only uses retail e-commerce in Indonesia. Using five variables including retail e-commerce sustainability image, brand identification, WOM, satisfaction, and purchase intention. As a suggestion for further research, it is expected to add other objects besides retail e-commerce such as online service companies. You can also add other variables that can affect purchase intention, such as the trust variable.


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