Journal of Business Research 59 (2006) 877 – 886

Understanding online B-to-C relationships: An integrated model

of privacy concerns, trust, and commitment
Mary Ann Eastlick a,*, Sherry L. Lotz a , Patricia Warrington b
a
Division of Retailing and Consumer Sciences, The University of Arizona, United States
b
Consumer Sciences and Retailing, Purdue University, United States
Received 3 November 2003; accepted 13 February 2006

Abstract

An integrative framework from information privacy and relationship marketing arenas was employed to investigate whether a traditional
business-to-business relationship marketing framework could be applied to the information-intensive online business-to-consumer channel. Roles
of consumers' privacy concerns and perceived e-tailer's reputation on their trust in, commitment toward, and purchase intent toward a services
e-tailer were examined. Effects of opt-in versus opt-out choice strategies on consumers' privacy concerns and trust were also studied. Results
showed that the strongest relationships leading to online purchase intent were those between trust in and commitment toward an e-tailer and
between firm reputation and trust. Privacy concerns influenced purchase intent with strong negative effects, both directly and indirectly through
trust. No difference was observed in respective direct effects of choice strategy on privacy concerns, nor were strategies found to moderate
reputation on privacy concerns or trust. Managerial implications are discussed.
© 2006 Elsevier Inc. All rights reserved.

Keywords: Services retailing; Online retailing; Consumer; Trust; Privacy concerns

1. Introduction and study objectives
Interactive electronic commerce via the Internet has become an
important retail channel for consumers. Given its special
environment, Internet retailers (e.g., e-tailers, online retailers)
may face a “double-edged sword” in their quest to use market-
place information to build relationships with consumers. Inter-
activity, a potential bridge to maintaining relationships, enables
online marketers to communicate one-on-one and, in doing so,
collect transactional and other personal information that can later
be used to precisely target offers to specific consumers (Blattberg
and Deighton, 1991). On the contrary, consumers' privacy
concerns about the loss of control over their information may
weaken relationships and, ultimately, affect whether consumers
will purchase online (Parasuraman and Zinkhan, 2002).
* Corresponding author. Division of Retailing and Consumer Sciences, P.O.
Box 210033, The University of Arizona, Tucson, AZ 85721-0033, United
States. Tel.: +1 520 621 1295; fax: +1 520 621 3209.
E-mail address: eastlick@u.arizona.edu (M.A. Eastlick).
0148-2963/$ - see front matter © 2006 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2006.02.006
Because most that is known about online business-to-
consumer (B-to-C) relationships has been observed by practi-
tioners and/or examined through descriptive research, there is
limited empirical, theoretical knowledge about factors that
contribute to, and deter from, building and maintaining these
relationships. Accordingly, Parasuraman and Zinkhan (2002)
have highlighted the need for “theory-based research” in this
area. Due to similar, yet diverse, characteristics (e.g., dimensions
of service quality, levels of interactivity) of online and offline
settings, some scholars question whether empirical knowledge
from the traditional marketplace also applies to online B-to-C
relationships (Parasuraman and Zinkhan, 2002; Zeithaml et al.,
2002). Others call for research to examine whether firm-related
strategies (e.g., differential efficacy of information choice
strategies, firm reputation) impact relationships with online
consumers (Rust et al., 2002).
Preliminary evidence suggests that some knowledge from the
business-to-business (B-to-B) literature may be applicable to the
B-to-C context. Thus, the Commitment–Trust Theory of Rela-
tionship Marketing (Morgan and Hunt, 1994), a widely accepted
B-to-B relationship marketing paradigm, may provide some
878 M.A. Eastlick et al. / Journal of Business Research 59 (2006) 877–886
Fig. 1. Research model.
theoretical guidance for examining B-to-C relationships. It
proposes that trust and commitment are central mediating agents
of successful B-to-B relationships. Opportunistic behaviors,
communication, shared values, relationship benefits, and tran-
saction costs perceived by relationship partners are factors in-
fluencing trust, commitment, or both. The impact of one or more
of these factors on trust and commitment can create a variety of
relationship outcomes (e.g., propensity to leave relationship,
cooperation).
Given the paucity of knowledge and questions to be
examined, this research uses an integrated model derived from
the Commitment–Trust Theory (Morgan and Hunt, 1994) and
the privacy concerns literature (Milne and Boza, 1998) to ad-
dress three objectives in the context of a B-to-C services e-tailer.
The services context is used because past research indicates that
consumers rely heavily on cues to assess services (Berry, 1980).
One study objective is to examine the role of privacy concerns on
factors that may contribute to B-to-C relationships. A second
objective is to empirically test the supposition that trust and
commitment play key roles affecting online purchase intent in a
B-to-C environment. A third objective of the study is to in-
vestigate firm-related factors that potentially may strengthen B-
to-C relationships and mitigate consumers' privacy concerns.
2. Background
The research model used for the study is shown in Fig. 1.
Among hypothesized relationships, it is predicted that con-
sumers' privacy concerns regarding use of their personal
information by an e-tailer will impact their online purchase in-
tent directly and indirectly through trust in and commitment
toward the e-tailer. Consistent with B-to-B relationship models,
it is also predicted that consumers' trust in an e-tailer will directly
influence their commitment toward that e-tailer, which, in turn,
will directly affect consumers' purchase intent. Lastly, percep-
tions of the e-tailer's reputation is proposed to directly influence
both trust and privacy concerns. In addition, an exploratory
component of this study is an examination of respective re-
lationships among common information choice strategies (i.e.,
opt-in versus opt-out strategies), firm reputation, consumers'
privacy concerns, and trust in an e-tailer. Empirical support for
hypotheses used to test each proposed relationship and literature
related to the exploratory research question is provided in sub-
sequent sections.
2.1. Antecedents of Internet purchase intent
2.1.1. Privacy concerns and trust in E-tailers
Initial research on electronic commerce indicates that risk
related to loss of consumers' privacy and security of personal
information is an important barrier to Internet adoption and use
by consumers (Wall Street Journal and Harris Interactive, 2001).
Individual privacy is widely regarded as a “legal” privilege.
Applying a combination of court rulings, legal discussions, and
legislative actions occurring over the past century, privacy is
acknowledged to comprise four discrete legal torts (i.e., in-
trusion, disclosure, appropriation, and false light). In the mar-
keting context, these torts have been interpreted by considering
the extent to which a marketer provides consumers control over
and access to their personal information. Hence, consumer pri-
vacy has been subjectively defined as a two-dimensional con-
struct consisting of control over information dissemination (i.e.,
disclosure) and information use (i.e., appropriation, intrusion,
false light) (Phelps et al., 2000).
Concerns over consumers' privacy arise when marketers
merge data to create relational databases that contain compre-
hensive individual-level information about consumers, a grow-
ing practice with database and Internet technologies (Culnan,
1995). Milne and Boza (1998) examined the relationship bet-
ween consumers' privacy concerns and trust toward marketing
information practices across different industries including direct
marketing. They reported that, compared to other industries,
consumers hold moderate levels of privacy concerns and low
levels of trust toward information practices of direct marketers.
Using multiple regression techniques, they also found a negative
relationship between level of trust exhibited toward a direct
 M.A. Eastlick et al. / Journal of Business Research 59 (2006) 877–886
marketer and potential risk for loss of privacy and security of
personal information. With regard to online retailing, it is ex-
pected that the relationship between privacy concerns and trust
in an e-tailer will be similar to that observed for other direct
marketers, leading to Hypothesis 1.
H1. Consumers' privacy concerns will negatively influence
their trust in a services e-tailer.
2.1.2. Concerns about privacy and purchase intent
Few empirical studies have examined how privacy threats
affect consumers' purchasing behavior toward specific retailers.
However, in a survey of online consumers, 53% of respondents
indicated that privacy concerns would prompt them to postpone
or forgo an online purchase (Wall Street Journal and Harris
Interactive, 2001). In addition, Milne and Boza (1998) found
that privacy concerns negatively predicted direct marketing
usage. Combined, these findings led to Hypothesis 2.
H2. Consumers' privacy concerns will negatively affect their
purchase intent toward a services e-tailer.
2.1.3. Trust in, commitment toward, and intent to purchase
from an E-tailer
Trust, i.e., confidence in reliability and integrity of an ex-
change partner, is considered central to B-to-B relationships
(Morgan and Hunt, 1994). Although trust was proposed to be
instrumental in online B-to-C exchange relationships (Urban
et al., 2000), the role of trust in B-to-C exchanges has received
limited attention (Milne and Boza, 1998).
Trust may be instrumental in B-to-B exchanges due to its
influence on commitment which also affects continued
purchasing and loyalty behaviors. In B-to-B contexts, commit-
ment is conceptualized as occurring when an exchange partner
puts forth maximum efforts to maintain a valued relationship
with another party, and in turn, negatively affects propensity to
leave the relationship (Morgan and Hunt, 1994). Hypotheses 3
and 4 apply these findings to consumers' willingness to enter
exchange relationships with e-tailers.
H3. Consumers' trust in a services e-tailer will positively
influence their commitment toward the e-tailer.
H4. Consumers' commitment toward a services e-tailer will
positively influence their purchase intent toward the e-tailer.
2.2. Firm-related factors, privacy concerns, and trust
2.2.1. Firm reputation and trust
According to Riahi-Belkaoui and Pavlik (1992), corporate
reputation is based on an assessment of the firm's product/ser-
vice expertise and social character, consumers' prior experi-
ences, and credible communications about the firm's abilities.
Similarly, in B-to-B relationships, developing trust in an ex-
change partner requires an assessment of a partner's past effec-
tive and reliable behavior and/or concern for a partner's interests
(Doney and Cannon, 1997). Milne et al. (1998) reported that, in a
B-to-C context, firm reputation was a common factor leading
879
direct-mail consumers to trust firms with their personal in-
formation. Some have also surmised that the reputation afforded
offline businesses elevates consumers' trust, thereby causing
their online sites to be more successful (Urban et al., 2000).
Thus, Hypothesis 5a is proposed as follows:
H5a. Consumers' perceptions of a strong reputation in a
services e-tailer will positively influence their trust in the e-tailer.
2.2.2. Firm reputation and privacy concerns
The need to trust an exchange partner is heightened in sit-
uations of increased risk (Crosby et al., 1990). If firm reputation
and trust are positively related, it would be logical that firm
reputation might also indirectly affect trust by reducing privacy
concerns about information provided in a B-to-C exchange.
While the relationship between firm reputation and privacy
concerns has not been empirically tested, Van den Poel and
Leunis (1999) reported that brand reputation was an important
risk reducer when purchasing from an Internet firm. Hypothesis
5b tests the role that firm reputation may play in influencing
privacy concerns.
H5b. Consumers' perceptions of a strong reputation in a
services e-tailer will negatively influence their privacy
concerns.
2.2.3. Information choice strategy, reputation, privacy con-
cerns, and trust
Offering consumers control over dissemination and use of
their personal information is widely considered to influence
consumers' privacy concerns and trust in an online retailer
(Culnan, 1995, 2000; Phelps et al., 2000). In support of this
contention, Culnan and Armstrong (1999) concluded that, in
relationships involving non-personal interactions, information
choice practices perceived as being “procedurally fair” could
lead to trust in a company, or they could moderate the effect of
an e-tailer's reputation on trust and privacy concerns.
The importance of control is consistently supported by
research demonstrating that consumers exhibit heightened
levels of concern over use of and sharing personal information
in situations where they have “no control” (Milne and Boza,
1998; Phelps et al., 2000). Yet, little is known regarding the
efficacy of different choice options used to provide control
(Rust et al., 2002). Firms that offer information control typically
do so via “opt-out” or “opt-in” choice formats. Generally, “opt-
out” choice formats require that consumers take actions to
protect their information from use and data sharing. “Opt-in”
choice formats require that companies take actions to gain
permission from consumers prior to using and sharing their
information.
Because U.S. marketers have been reluctant to implement
stricter opt-in standards, the opt-out standard is the choice stra-
tegy utilized by most U.S. companies (Shimanek, 2001). It was,
however, reported that the opt-in strategy is the guiding principle
upon which a new Microsoft consumer privacy software tool
was developed (Rust et al., 2002). Thus, for firms consider-
ing adoption of the opt-in option, it is important to determine
880 M.A. Eastlick et al. / Journal of Business Research 59 (2006) 877–886
whether it has an advantage over the opt-out strategy. Arguments
as to the more effective form of information choice have not been
resolved because there is no strong empirical evidence to suggest
that either format is superior in reducing consumers' privacy
concerns. Proponents of the opt-in approach suggest that it may
appease consumers' privacy fears (Rust et al., 2002). Others
indicate that, because consumers may not have the ability to
confidently assess privacy policies, one option may have no
advantage over the other (Wolfinbarger and Gilley, 2002).
Supporting this contention, one study showed that consumers
viewed both choice formats as equivalent (Milne, 1997).
However, no research, to date, has investigated the efficacy of
either option in conjunction with privacy concerns and other
relationship-building constructs. Therefore, an additional aim of
this study is an exploratory examination of respective relation-
ships among choice options, privacy concerns, firm reputation,
and trust.
3. Method
3.1. Data collection
Data were collected by surveying a random sample of Internet
subscribers consisting of 2000 U.S. households, stratified by
state. Subjects, identified as primary shoppers for computer and
electronic products, were asked to complete a self-administered
questionnaire. An initial mailing and one follow-up (sent to non-
respondents approximately six weeks later) were employed
resulting in a 94% delivery rate and a 25.4% return rate (n = 477
usable surveys). Drawings to win $75 were provided as in-
centives for participation.
3.2. Questionnaire
The written questionnaire contained measures of reputation,
information choice strategy, privacy concerns, and trust in, com-
mitment toward, and purchase intent toward a services e-tailer.
Shopping behavior, demographic, and socioeconomic informa-
tion were also collected.
To develop the questionnaire, information obtained from a
focus group of ten male and female, adult Internet consumers
was used to adapt previously established scale items to reflect
issues related to trust, commitment, privacy concerns, firm
reputation, and information choice strategy in the context of
online purchasing. A pretest experiment was then conducted on
a convenience sample of 63 university students (also Internet
users) to select online purchasing scenarios that would be per-
ceived as realistic and in which manipulated variables of infor-
mation choice strategy and firm reputation varied in the intended
directions. Prior to implementing the survey, another pretest was
conducted with the final questionnaire on a convenience sample
of Internet users to uncover potential problems with statements,
instructions, and format.
An insurance e-tailer was selected as an appropriate context
for the study because focus group results revealed that important
variables under investigation were particularly salient in this
context. Also, in past studies, consumers exhibited high levels of
concern over the use of personal information by insurance firms,
moderate levels of trust in their efforts to use that information
fairly (Milne and Boza, 1998), and relied more heavily on sur-
rogates (e.g., firm reputation) for quality evaluations of services
(e.g., Berry, 1980).
3.3. Research design
A 2 × 2 research design, in which subjects were randomly
assigned to one of four questionnaire versions, was used for the
study. Four shopping scenarios were developed to present a
purchasing situation for an insurance policy from an e-tailer
having a strong versus weak reputation and employing an opt-in
versus opt-out information choice strategy.
3.4. Operational definitions of variables
Variables examined in the study consisted of five constructs
including one exogenous (e-tailer reputation) and four endo-
genous constructs (i.e., privacy concerns, trust in an e-tailer,
commitment toward an e-tailer, and purchase intent). Information
choice strategy was also incorporated among study variables for
an exploratory examination of common choice strategies (i.e.,
opt-in and opt-out strategies). To develop measures at the same
levels of abstraction, global assessments were employed as oper-
ational definitions of each variable.
3.4.1. Exogenous construct
Store image research suggests that consumers may form
overall impressions of an image or reputation that are compared
to category exemplars (Keaveney and Hunt, 1992). Consistent
with this approach, e-tailer reputation was operationalized by
varying the overall impression of firm ability and character.
Subjects exposed to the strong reputation scenario received the
following description: “You are considering purchasing an
insurance policy on the Internet. While conducting a search of
insurance companies using a popular search engine, you visit
several company sites and pick the website of one of the largest
and most successful insurance companies in the U.S. The
company sells a variety of types of insurance via local agents
and the Internet. This company, which has been in business for
over 25 years, has a reputation for being customer-oriented.”
Conversely, subjects exposed to the weak reputation scenario
received a description of the same shopping and search process.
However, the company description varied as follows: “… and
pick an interesting website of a company from whom you are
considering purchasing. Information provided on the website
describes the firm as a new company, which has been in business
for 6 months, that sells a variety of types of insurance via the
Internet.”
3.4.2. Endogenous constructs
Three of the endogenous constructs including Privacy
Concerns, Trust in a Services E-tailer, and Commitment toward
a Services E-tailer were assessed via multi-item measures using
a 5-point Likert scale, i.e., “very strongly disagree” (1) to “very
strongly agree” (5). A four-item scale designed to evaluate
 M.A. Eastlick et al. / Journal of Business Research 59 (2006) 877–886 881

Table 1
Socioeconomic and demographic characteristics of respondents
% of respondents % of respondents
Household income: n = 466 Education: n = 466
$24,999 and Below 14.0 High school degree 16.0
$25,000 to $49,999 30.5 Some college 39.0
$50,000 to $74,999 27.1 College degree 28.5
$75,000 to $99,999 17.4 Graduate school or graduate degree 16.6
$100,000 and over 11.0
Occupation: n = 340 Location of Residence: n = 475
Skilled laborer/crafts 7.4 South 36.3
Clerical/sales 15.0 West 21.4
Manager/administrator 35.3 Northeast 19.3
Professional 42.4 North central 23.1
Age: n = 452 Gender: n = 463
18 to 24 7.9 Female 69.8
25 to 34 27.0 Male 30.2
35 to 44 24.5 Marital Status: n = 463
45 to 54 23.4 Married 65.0
55 to 64 10.3 Never married/widowed/divorced 35.0
65 and older 6.9
Ethnicity: n = 457 Employment Status: n = 466
Caucasian 88.0 Full-time 59.7
Other 12.0 Part-time 11.6
Other* 28.7
*
e.g., retired, attending school, homemaker, unemployed, etc.

consumers' privacy concerns about dissemination and use of 4. Results

their personal information (i.e., disclosure, appropriation, in-
trusion) was employed to assess Privacy Concerns. Items,
written by the researchers, were adapted from focus group
results and past research on privacy concerns (Milne and Boza,
1998). Trust was measured using 8 items adapted from an es-
tablished scale (Larzelere and Huston, 1980) used in marketing
studies to provide a global assessment of trust toward overall
fairness, honesty, and sincerity in a firm's dealings with its
customers (Doney and Cannon, 1997; Morgan and Hunt, 1994).
Commitment was measured by adapting an eleven-item scale
employed in organizational research (Mowday et al., 1979) that
provides an overall evaluation of consumers' allegiance and
obligation toward a firm. The fourth endogenous construct
(Purchase Intent toward a Services E-tailer) was measured with
a single item written by the researchers, “Do you think you
would purchase from the company described in this situation?”
This was rated using a 5-point Likert scale, i.e., “No” (1) to
“Definitely Yes” (5).
3.4.3. Information choice strategy
Information Choice Strategy was manipulated by providing
the company's “information practices” policy using either an
opt-out or opt-in standard (Milne, 1997). The opt-out choice
option required consumers to take action by contacting the
e-tailer if they did not want their information shared (e.g.,
checking a box, calling, writing, or emailing). Alternatively, the
opt-in choice option requested consumers' permission to share
their information. Disclosure of intent to share consumers'
information with other companies and the information to be
shared (e.g., socioeconomic, purchase and search histories) were
provided to control for knowledge about information usage.
4.1. Respondents' characteristics
Characteristics of respondents (see Table 1) were compared to
characteristics of U.S. online shoppers reported in a study
conducted during a similar time frame (Ernst and Young, 2001).
The Ernst and Young study indicated that characteristics of the
U.S. online shopper and the middle-class retail consumer were
increasingly becoming similar (i.e., average household income of
$52,200, 35% with a college degree, 50% with no college degree,
average age of 42, 60% female, and 59% married). Of this study's
respondents, 58% earned annual household incomes between
$25,000 and $74,999, 45% held a college degree, 55% had not
earned a college degree, and 48% were middle-aged. Most
respondents were female, married, Caucasian, and employed full-
time in manager/administrator or professional occupations. Also,
their locations of residence were distributed across the country
with the highest proportion residing in the South.
Information provided by respondents on their Internet-usage
behavior for the previous 6 month period also revealed that they
were experienced Internet consumers. Approximately 64% had
searched online over 11 times for product/services information.
Over 50% and 25% had made one to five and over six online
purchases, respectively. Also, about 45% of respondents had either
searched for information on or purchased financial services online.
4.2. Manipulation checks
The questionnaire included manipulation checks (four Likert-
scale statements) for e-tailer reputation. T-tests revealed that
subjects exposed to the strong reputation scenario perceived
882 M.A. Eastlick et al. / Journal of Business Research 59 (2006) 877–886

Table 2
Measurement model results
Construct indicator Statement Std. SE t* Reliability % of
loading variance
ξ1 (Services e-tailer reputation) – –
X1 Strong versus weak 0.39a – –
η1 (Trust in a services e-tailer) 0.84c 52.0%d
γ1 Company cannot be trusted (R) 0.68b – –
γ2 Company would be honest and truthful 0.74 0.078 13.91
γ3 Would be able to trust company completely 0.72 0.085 12.50
γ4 Company will be sincere in promises 0.67 0.077 12.82
γ5 Company will treat me fairly and honestly 0.79 0.079 14.55
η2 (Privacy concerns) 0.85c 66.1%d
γ6 Shopping from company will place my information at risk 0.84b – –
γ7 Purchase information collected by company will place my information 0.88 0.050 20.85
at risk
γ8 Shopping from company will place my information on unsolicited 0.71 0.050 16.76
mailing lists
η3 (Commitment toward a Services 0.92c 67.1%d
E-tailer)
γ9 Willing to put effort into helping company be successful 0.82b – –
γ10 Recommend this company to friends/family 0.89 0.038 28.79
γ11 Proud to be a customer 0.86 0.048 22.01
γ12 Happy to choose company over others 0.77 0.052 18.10
γ13 Care about fate of company 0.71 0.051 16.77
γ14 Company would be among best to shop 0.85 0.049 21.27
η4 (Purchase intent toward a services – –
e-tailer)
γ15 Likelihood of purchase 0.91a – –
*p's≤.05.
a. Single item indicator with error estimates adjusted.
b. First λ path for each construct set to 1; therefore, no SE's of t-values given.
c. (Σ Std. loadings)2 / [(Σ Std. loadings)2 + Σξj].
d. Σ Std. loadings2 / Σ Std loadings2 + Σξj.

that e-tailer as being significantly (p's ≤ .05) more credible
( x̄ = 3.07), more reputable (x̄ = 2.87), of greater integrity
(x̄ = 3.16), and better known (x̄ = 3.02) than those exposed to
the weak reputation scenario (x̄'s = 2.41, 2.33, 2.59, 2.13,
respectively)
4.3. Tests of hypotheses
Structural equation modeling was conducted via Lisrel 8.3 by
employing the correlation matrix to estimate the structural
model. The research model, shown in Fig. 1, consisted of one
exogenous and four endogenous constructs. Prior to testing the
structural model, confirmatory factor analysis was employed to
assess the measurement model.
4.3.1. Measurement model results
Principal components exploratory factor analysis with Vari-
max rotation was first conducted on the 4-item privacy scale
written by the researchers. Privacy Concerns was explained by
one factor consisting of all four items (factor loadings: .80 to .90;
reliability: 0.88). Confirmatory factor analysis was then em-
ployed to test all multi-item scales (i.e., Trust, Privacy Concerns,
and Commitment). Indicators with nonsignificant factor loadings
were eliminated, and a conservative error variance was es-
tablished for single-item constructs (i.e., E-tailer Reputation
and Purchase Intent). Results of the measurement model (see
Table 2), provide evidence that the remaining indicators and
their underlying constructs were acceptable. Discriminant vali-
dity was found acceptable with all cross-construct correlations
significantly different from 1.0 (p ≤ .05).
4.3.2. Causal equation model results
Results from structural equation modeling obtained for the
theoretical model revealed a significant chi-square of 177.27
(df = 88; p ≤ .001), an artifact of the large sample size. However,
the GFI (.95), AGFI (.93), CFI (.99), RMSEA (.047), and χ2/df
(2.01) indicated good model fit. Table 3 presents the simple
statistics and intercorrelations as well as the model and structural
path coefficients for each relationship. The predicted negative
relationships between Privacy Concerns and Trust (H1) and
Privacy Concerns and Purchase Intent (H2) were supported.
Both Hypothesis 3, predicting that Trust will positively in-
fluence Commitment, and Hypothesis 4, predicting that Com-
mitment will, in turn, positively influence Purchase Intent, were
also supported. Additionally, the positive relationship between a
strong E-tailer Reputation and Trust (H5a) and the negative
relationship between a strong E-tailer Reputation and Privacy
Concerns (H5b) were each supported.
Focusing on the model's total effects, the strongest direct
effects were observed for the effect of Trust on Commitment
(β31 = .86) and the influence of E-tailer Reputation on Trust
(γ11 = .64) followed by the effects of Privacy Concerns on Trust
 M.A. Eastlick et al. / Journal of Business Research 59 (2006) 877–886 883

Table 3
Structural model descriptive statistics, intercorrelations, and model estimation results
Latent variables Mean S.D. Intercorrelations
1 2 3 4 5
1
1. Services e-tailer reputation 0.49 0.50 –
2. Trust in a services e-tailer 2.71 0.82 .78 –
3. Privacy concerns 4.04 0.96 − .28 − .68 –
4. Commitment toward a services e-tailer 2.47 0.88 .67 .86 −.59 –
5. Purchase intent toward a services e-tailer 1.95 1.09 .38 .56 −.51 .61 –

Hypothesis Path Effect estimate

Hypothesis 1 Privacy concerns (η2)→trust (η1)
− .50*
Hypothesis 2 Privacy concerns (η2)→purchase intent (η4)
− .23*
Hypothesis 3 Trust (η1)→commitment (η3)
.86*
Hypothesis 4 Commitment (η3)→purchase intent (η4)
.47*
Hypothesis 5a Reputation (ξ1)→trust (η1)
.64*
Hypothesis 5b Reputation (ξ1)→privacy concerns (η2)
− .28**

Model results:
χ2 = 177.27 (df = 88, p ≤ .001) Squared multiple correlation:
χ2/df = 2.01 Trust = .84
GFI = .95 Privacy concerns = .08
AGFI = .93 Commitment = .74
CFI = .99 Purchase intent = .40
RMSEA = .047
Notes:
1. 0 = Weak reputation; 1 = Strong reputation.
*
p ≤ .001.
**
p ≤ .05.

(β12 = − .50) and Commitment on Purchase Intent (β43 = .47). The
strongest indirect effects included that of a strong E-tailer
Reputation on Commitment through Trust (γ11 * β31 = .55) and a
strong Reputation, through both Trust and Commitment, on
Purchase Intent (γ11 * β31 * β43 = .26).
dependent variable. Results showed no interaction between
information choice strategy and firm reputation on trust
(F = 1.46; p ≤ .23) and no main effect of information choice
strategy on trust (F = 1.15; p ≤ .28). However, a main effect was
revealed for firm reputation on trust (F = 28.19; p ≤ .0001).

4.4. Exploratory investigation of information choice strategies 5. Discussion

The exploratory examination of the relationships among opt-
in and opt-out information choice strategies and privacy
concerns, trust, and reputation was conducted in two ways.
First, a path from information choice to privacy concerns was
incorporated in the final structural model. The path did not
change the fit indices and was not significant (p N .05). Second, a
two (information choice) by two (e-tailer reputation) ANOVA
was used to test whether an interaction existed between re-
putation and information choice strategy on privacy concerns.
Results revealed a significant main effect for firm reputation
(F = 6.61; p ≤ .01). However, there was no main effect of infor-
mation choice strategy on privacy concerns (F = 1.43; p ≤ .22)
and no interaction of firm reputation and information choice on
privacy concerns (F = 2.18; p ≤ .14). Because information choice
strategy might also interact with firm reputation in influencing
trust, another two-way ANOVA was employed using trust as the
This study examined, through an integration of precepts from
privacy concerns and relationship marketing literatures, the role
of potential contributors to, and detractors from, B-to-C online
relationships. In addition, the possible effects of firm-related fac-
tors were assessed. It is one of few studies to empirically demon-
strate the negative influence of privacy concerns on Internet
purchasing. Results also demonstrate strong support for the im-
portance of trust and commitment in B-to-C relationships in an
online services context. Relative to firm-related factors, findings
reveal that a strong reputation positively influences trust which, in
turn, positively affects commitment and purchase intent. In ad-
dition, a strong reputation negatively influences privacy concerns
which impacts purchase intent directly and indirectly through
both trust in and commitment toward the services e-tailer. Lastly,
findings render arguments over superiority of an opt-in or opt-out
information choice strategy as questionable since neither
884 M.A. Eastlick et al. / Journal of Business Research 59 (2006) 877–886
possessed advantages in abating consumers' privacy concerns or
elevating their trust.
5.1. Consumers' privacy concerns, trust, commitment, and
purchase intent
The first objective of this study was to examine the role of
privacy concerns on factors that may contribute to B-to-C rela-
tionships with an online services retailer. Bridging a gap in
knowledge, the present empirical analysis concludes that
privacy concerns strongly and negatively predict (significance
at p ≤ .001) trust in a services e-tailer. These findings also clarify
evidence provided by a past B-to-C descriptive study of 17
industries (Milne and Boza, 1998) by verifying the direction of
the privacy concern–trust relationship (e.g., lower privacy
concerns leads to greater trust as opposed to vice versa).
One of this study's contributions is a better understanding of
whether B-to-B relationship theories can be applied to online B-
to-C relationships encompassing necessary modifications with
respect to privacy concerns, trust, and commitment. Overall, the
B-to-B model is indicative of the B-to-C model, but the present
study's findings do reveal some departures. For example, as
opposed to our finding of a negative privacy concern–trust
relationship, results of a B-to-B relationship study (Morgan and
Hunt, 1994) demonstrated that perceived opportunistic behavior
(possibly analogous to privacy concerns) negatively impacted
commitment but did not affect trust. Also, in a rival model's
testing, no relationships were found among opportunistic be-
havior, trust, and commitment. While privacy concerns and
opportunistic behavior may represent different types of risk,
these varied results support a call to determine the applicability
of traditional models to the B-to-C setting (Parasuraman and
Zinkhan, 2002).
Possibly, underlying unique environments for privacy/
relationship issues may explain different results in B-to-B and
online B-to-C contexts. In B-to-B settings, information practices
may be grounded in daily collaboration and data sharing, an
ongoing situation that may not be characteristic of B-to-C
settings. Other contrasts may include the degree of flexibility in
terminating the relationship. Lastly, rewards from B-to-B
relationships may be more visible (e.g., profit), directly tied to
data collection, and received in a timely manner. Comparatively,
consumers of online retailers may experience delayed, abstract
benefits that are not directly associated with sharing their per-
sonal information.
The direct impact of consumers' privacy concerns on their
purchase intentions toward a services e-tailer is also consistent
with previous findings demonstrating a relationship between
privacy concerns and use of direct marketing (Milne and Boza,
1998; Phelps et al., 2000). Results suggest that consumers may
decide not to purchase online based solely on their concerns
about collection and misuses of their personal information. The
strength of the beta coefficients from privacy concerns to both
trust and purchase intent show that privacy concerns has its
greatest impact on purchasing intent through its relationship
with trust. This implies that the direct influence of privacy
concerns on purchase intent is temporal with immediate, ne-
gative consequences for purchase intent. However, because trust
is a deeply held consumer attitude that also affects commitment,
the negative influence of privacy concerns through trust may be
more devastating for the long run due to its adverse impact on the
overall relationship with the e-tailer.
Given that privacy concerns may exert lasting damage to the
online B-to-C relationship, employment of strategies that lessen
these concerns is critical. Experts suggest that some cues,
particularly the use of seals of approval from unbiased, credible
parties, may be effective in this regard. Practitioners also warn
against using covert data collection devices and advocate strict
adherence to established privacy policies (Urban et al., 2000). A
retailer's reputation has also been proposed as a risk-reducing
communication to consumers. Website operators may also need
to educate consumers regarding relationship benefits that result
from information sharing.
5.2. The roles of trust and commitment on intent to purchase
The study's second objective was to empirically test the
supposition that trust and commitment, important relationship
variables in B-to-B relationships, play key roles affecting B-to-C
online purchase intent. This testing was based on the assumption
that a relationship could be established between consumers and a
services e-tailer. Given channel differences, this may have been a
lofty assumption. However, this study's results support the
theory that such alliances are feasible. This finding, in and of
itself, is not a minor point inasmuch as interaction between
consumer and e-tailer is a “faceless” one. From the practitioner's
view, results related to trust and commitment indicate that, in
addition to focusing on typical marketing strategies aimed at
building price, promotional, and fulfillment advantages, strat-
egies should also encompass achieving mutual benefits that
culminate in long-term B-to-C relationships.
Within the context of this study, trust and commitment were
established as core components of services e-tailers' relation-
ships with consumers. Two of the strongest direct relationships
observed in the model were positive relationships between trust
and commitment and commitment and purchase intent. These
findings support research showing both trust and commitment as
critical central elements of B-to-B exchange relationships
(Morgan and Hunt, 1994) and further underscore contentions
of Urban et al. (2000) who propose that website trust will
differentiate successful from failing online retail companies.
Insofar as the importance of trust and commitment have been
established in online retailer-consumer relations, one next re-
search step may be to identify differences and similarities bet-
ween consumers' commitment and loyalty toward a services e-
tailer. Oliver (1999) suggests that consumers perceive various
degrees of loyalty. Given this premise, commitment may also be
present in varying degrees and/or may be analogous to specific
stages of loyalty. Future research may also ascertain whether the
channel itself facilitates or hinders consumers' perceived trust
and commitment. Some researchers advocate that consumers
may have more difficulty formulating expectations about some
dimensions of online, as compared to offline, service quality
(Zeithaml et al., 2002). Conversely, others contend that
 M.A. Eastlick et al. / Journal of Business Research 59 (2006) 877–886
enhanced interactivity of the online channel may capacitate
building trust with consumers (Urban et al., 2000).
5.3. Firm-related factors and online B-to-C relationships
The study's third objective was to investigate firm-related
factors (i.e., reputation and information choice strategy) that
may have potential for strengthening B-to-C relationships and
mitigating consumers' privacy concerns. Accomplishment of
this goal fulfills researchers' calls for empirical examinations of
e-service factors, including privacy policies and other cues, that
may signify trust, e.g., firm reputation (e.g., Rust et al., 2002;
Zeithaml et al., 2002).
5.3.1. Firm reputation as a determinant of trust and privacy
concerns
The direct effect of firm reputation on trust in an e-tailer is one
of the strongest relationships validated by this investigation.
Findings show that a strong, as compared to weak, firm repu-
tation contributes to greater trust in a services e-tailer. This result
is consistent with an expectation that trust is derived from con-
sumers' evaluations of a firm's past behaviors (Doney and
Cannon, 1997). In addition, the strong firm's reputation was an
effective agent in easing respondents' concerns about sharing
personal information with the e-tailer.
For firms that do not have established retailer reputations, this
study's results seem to indicate that creating a stellar firm repu-
tation should be a foremost objective. A strong firm reputation
not only elicits perceptions of trust among consumers but also
reduces risks associated with privacy concerns. The latter result
adds to prior findings which showed that the combined offering
of well-known product brands, money-back guarantees, and
price reductions was the most effective strategy for significantly
reducing consumers' perceived risk about online shopping (Van
den Poel and Leunis, 1999). Further research is warranted to
investigate whether other strategies are similar to e-tailer repu-
tation in building customer trust and/or reducing privacy con-
cerns. Also, as the strong reputation manipulation portrayed the
e-tailer as a multi-channel player (i.e., possessing both offline
and online channel offerings), these results lend potential credi-
bility to the proposition that successful Internet retailers may be
firms with a physical presence (Ernst and Young, 2001). How-
ever, it is not clear that incorporating an offline offering into the
channel strategy is sufficient to enhance an e-tailer's reputation.
5.3.2. The role of information choice strategy
No relationships were found among opt-in and opt-out in-
formation choice strategies and consumers' privacy concerns,
trust, and e-tailer reputation. A number of theoretical propositions
might explain these results. The first explanation may be that
consumers merely want to have control over use of their personal
information and, once provided, the structure of a choice option is
not important (Buskin, 2000). Equity theory provides a second
perspective through a concept known as voice (Culnan and
Armstrong, 1999). The chance to communicate and/or choose
(i.e., via opt-in or opt-out options) may have led respondents to
perceive both options as equally fair. A third explanation may be
885
consumers' confusion and lack of confidence with appraising
privacy policies. Wolfinbarger and Gilley (2002) found that, in
this situation, consumers evaluated privacy policies through
website characteristics and firm reputation. Further research is
needed to determine the most relevant alternative theoretical
framework for illuminating the provision of information choice.
5.4. Study limitations and implications for future research
Because only one services e-tailing format served as the
study's focus, results cannot be generalized to other types of
e-tailers. Future research should investigate whether relation-
ships among reputation, privacy concerns, trust, and commit-
ment vary by type of online format. Researchers should also
examine consumers' perceptions of relationships among these
constructs in the context of multi-channel firms including both
physical and other direct channels (e.g., catalog). Also, because
reputation was important in increasing trust and dissipating
privacy concerns, future research should examine various
dimensions of reputation in the minds of consumers.
In addition to firm reputation, factors such as experience with
the retailer, relationship benefits via customization opportunities,
perceptions of a retailer's opportunistic behaviors, web design,
etc. may also contribute to developing trust and commitment
toward online and other channel retailers. Future research should
examine the combined contribution of multiple factors that might
contribute toward establishment of trust in a retailer.
The modes of communicating a company's privacy policies
examined by this research were limited to two choice options for
consumers' personal information. Future research also needs to
investigate the effectiveness of non-voluntary (i.e., privacy laws)
as well as other voluntary means (i.e., privacy seals of approval)
of communicating privacy policies to consumers. In addition,
future research should be undertaken to better understand poten-
tial dimensions of consumers' privacy concerns and how those
dimensions might relate to established legal tort and potential
differential effects of each on behavior.
Acknowledgments
The authors wish to extend their appreciation to the Direct
Marketing Policy Center of the University of Cincinnati for the
partial support of this project.
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