The effect of trust signals on online retailer's sales: An example of Taobao

Abstract

The signals released by the online retailer can influence the consumers' trust in the retailer, and then, make an impact on consumer's purchase intention. This research will directly examine the effect of trust signals on online retailers' sales. The data are collected from Taobao (www.taobao.com), and contain 400 samples unit with product and four categories. With linear regression model, this research finds that: 1) there is correlation between the number of signals and product's sales; 2) among the 13 signals introduced into the model, signals which indicate ability of retailers, such as “level of store”, can significantly and positively influence product's sales, the influence of other kinds of signals is very little or even no; 3) price of product can significantly moderate the effect above; 4) compared with the most important factor which can influence the product's sales online - word of mouth (WOM), even though the influence is not as significant as WOM, trust signal can be another important indicator to affect sales.