THE INTRODUCTION OF AVATARS AS A FACTOR OF SOCIABILITY IN              E- COMMERCE WEBSITES: PERSPECTIVES FOR SMALL RETAIL...
THE INTRODUCTION OF AVATARS AS A FACTOR OF SOCIABILITY IN             E- COMMERCE WEBSITES: PERSPECTIVES FOR SMALL RETAILE...
1   INTRODUCTIONThe lack of consumer trust, particularly in the B2C segment, has been recognized as oneof the greatest bar...
In this paper, we report an experiment designed to test the impact of avatars. Wecompared an online store with a photo rea...
Nowak and Rauth (2005) conducted a study to evaluate avatars in a static context interms of their androgyny, anthropomorph...
agent. The results also indicate that women are more likely to appreciate the interactionof avatars in any of their roles;...
This result, associated with the findings of Nowak and Rauth (2005) and Nowak,Hamilton, and Hammond (2008) suggests that d...
manipulation of the avatar’s attractiveness and expertise makes it more persuasive tocertain segments of consumers dependi...
perceptions of social presence among consumers. In return, consumers’ feelings of trust,perception of fun and, finally, th...
2.3     CONCEPTUAL MODEL                            Image 1: Conceptual Model                      Adapted from Wang and F...
purposes are credible (Cugelman et al, 2009).                   Mediator variable. Perception of social presence and sensi...
X 3- In this experience the participants visited a simulated online store (Shop 3)displaying an avatar based on the image ...
Image 2: Homepage of Store 1The second store (Shop 2) included a naturalist female avatar with synthesized TTSvoice. On th...
The third store (Shop 3) was in all similar to Shop 2. The only difference was that it wasequipped with a photo realistic ...
Image 5: Female Avatars used on the experimentThe technology used for the construction of the avatars was provided by Oddc...
3.4    SAMPLEThe subjects of the experiment were recruited online through social media (Facebookand Linkedin) and Electron...
4.2 DATA ANALYSIS4.2.1 RELIABILITY TESTS OF THE MEASUREMENT SCALESThe reliability of scales used measure the latent constr...
The proposed model does not include any controlled treatment between the mediatorlatent constructs "Trust," Credibility", ...
Decision rule:Not reject H0:          if     > 	 = 0,05Reject H0 (accept Ha) if       ≤ 	 = 0,05Table 3 presents the resul...
Table 4: Scheffés multiple comparisons tableScheffe                                                                       ...
Image 6: Means by Sociability LevelThe difference of means was always statistically significant between Group I and GroupI...
4.2.2.2 Partial CorrelationsThe analysis of scatter charts between the variable "Purchase and Repurchase Intention"and the...
•    The strength of the relationship between “Purchase and Repurchase Intention”         and “Sociability and Human Warmt...
Subsequently, we assessed the strength of the relationship when mediating variableswere controlled for. Table 7 presents t...
Finally, we analyzed the association between “Purchase and Repurchase Intention” and“Sociability and Human Warmth” control...
empathy with the subjects giving them increased feelings of trust towards the seller(Wang &Fodness, 2010).Although the mea...
not involve such technical complexity and such a high price level that their purchaserequires superior levels of credibili...
6.1   IMPLICATIONS FOR MANAGEMENTIn addition to contributing to the body of knowledge about the role of avatars in onlines...
Despite the fact that the recruitment of our sample has been performed in a universemuch larger than a college campus, and...
APENDIX A – QUESTIONNAIRE S TRUCTURETrust Scale:Tell us on a scale of 1 to 7 your degree of agreement with the followingst...
Sociability and Human Warmth Scale:For each one of these adjectives indicate in a scale of 1 to 7 how they describethe ele...
Internet use:1) How often do you access the internet?- Everyday- A few times a week;- A few times a month;2) You use inter...
•   Electronic equipment and computers;        •   Home appliancesSociographic Data- Age- Sex- Professional Group- Academi...
BIBLIOGRAPHYAldiri, K., Hobbs, D., & Qahwaji, R. (2010). Putting the Human Back into e-Business:Building Consumer Initial ...
McGoldrick, P. J., Keeling, K. A., & Beatty, S. F. (2008). A Tipology of Roles forAvatars in Online Reatailing. Journal of...
Qiu, L., & Benbasat, I. (2009). Evaluating Anthropomorphic Product RecommendationAgentes: A Social Relationship perspectiv...
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Alves et Soares - THE INTRODUCTION OF AVATARS AS A FACTOR OF SOCIABILITY IN E- COMMERCE WEBSITES: PERSPECTIVES FOR SMALL RETAILERS

  1. 1. THE INTRODUCTION OF AVATARS AS A FACTOR OF SOCIABILITY IN E- COMMERCE WEBSITES: PERSPECTIVES FOR SMALL RETAILERSAntónio Alves, MSc in Marketing and Strategic Management (University of Minho,Portugal).Email: amalves@ alumni.uminho.pt; mobile: +351 919968829Ana Maria Soares, PhD in Management, Assistant Professor, University of Minho,Portugal.Email: amsoares@eeg.uminho.pt 1
  2. 2. THE INTRODUCTION OF AVATARS AS A FACTOR OF SOCIABILITY IN E- COMMERCE WEBSITES: PERSPECTIVES FOR SMALL RETAILERS ABSTRACTThis paper addresses the question of the introduction of avatars as sociability andhuman warmth stimuli in sites of electronic commerce and its implications for digitalmarketing. Simultaneously it attempts to raise new perspectives on how retailers can usetheir vast knowledge on personalized relationships, and on how to apply it to an onlineenvironment. The combination of avatar technology and these companies’ expertise,applied to an online store, can definitely become a competitive advantage for smallbrick and mortar retailers.Keywords: Avatars, Virtual Agents, Online Consumer Behavior, Electronic Commerce,E-Commerce, Traditional Commerce RESUMECet article aborde le sujet de lintroduction des avatars comme stimulus de sociabilité etde chaleur humain dans les sites de commerce électronique et de ses implications pourle marketing digital. On essaie de présenter de nouvelles perspectives sur utilisation del’immense savoir-faire sur la relation personnalisée détenue par le commercetraditionnel et sur la façon de lappliquer à cette technologie. La combinaison de latechnologie des avatars et lexpertise de ces entreprises, appliquée à un magasin enligne, peut devenir définitivement un avantage concurrentiel.Mots-clés: Avatars, Agents virtuels, Comportement des consommateurs en ligne,Commerce électronique, Le commerce traditionnel 2
  3. 3. 1 INTRODUCTIONThe lack of consumer trust, particularly in the B2C segment, has been recognized as oneof the greatest barriers for the development of electronic commerce (Aldiri, Hobbs, &Qahwaji, 2010). This lack of trust can be largely attributed to the absence of personalface-to-face interactions between the consumer and the seller. In traditional commerce,trust between parties builds in these interactions (Aldiri et al, 2010) which constituteone of its main comparative advantages. Such interactions provide human contact andcreate opportunities for the development of personal services in contrast with theimpersonal e-commerce interaction between the consumer and a Web server (Otto &Chung, 2001). Moreover a significant number of small and medium size traditionalretailers hold intangible assets (a brand recognized by consumers, significant experiencein personal service, prestige accumulated over decades) of great strategic value. In turn,e-commerce operators have already realized that human contact is important in order toestablish meaningful relationships with their customers (Qiu & Benbasat, 2005).The literature suggests that the use of avatars (virtual characters with humancharacteristics created by technology) can increase the persuasiveness of online saleschannels (Wang, Baker, Wagner, & Wakefield, 2007)by increasing their credibility,perceived trust, and allowing for social stimuli and human warmth in online storesinteractions. Consequently avatars lead to greater consumer satisfaction with the seller,a better attitude toward the product and increased purchase intent (Holzwarth,Janiszewski, & Neuman, 2006).The technology now available allows equipping a website with animated 3D avatarswith high level of interactivity and multiple graphic options. Avatars can be built fromreal human beings images, endowed with synthesized voice through text to speechtechnology (TTS), with real human voice and even with Artificial Intelligence (AI)based on a knowledge library with tens of thousands of topics that can be tailored to thespecific online store specifications. Such technology allows consumers to engage in atwo-way conversation with the virtual character and find answers in a more intuitiveand enjoyable manner. The prices of this technology for the store are around $ 250 permonth (Oddcast, 2012). Such amount is compatible even with the budgets of traditionalsmall retailers. 3
  4. 4. In this paper, we report an experiment designed to test the impact of avatars. Wecompared an online store with a photo realistic avatar endowed with real human voiceand an online store with a naturalistic avatar endowed with TTS voice and with anonline store without an avatar.This paper is organized as follows: In the following section, we conduct a literaturereview about the introduction of social factors and the use of avatars in e-commerce(E.C.). Section three presents the empirical study describing methodologicalconsiderations and study design. Subsequently, we present the findings of theexperiment. The results are discussed on section five. Finally, we present the study’sconclusions including the implications for management, limitations and further researchdirections.2 LITERATURE REVIEW2.1 THE INTRODUCTION OF SOCIAL FACTORS AND THE USE OF AVATARS IN E-COMMERCEAccording to the literature, despite its consistent and continued growth, the fact thatmany online stores tend to produce little social or emotional appeal and can beperceived as impersonal and empty of human warmth is a weakness limiting e-commerce (Hassanein & Head, 2005/6; Holzwarth et al, 2006). Inducing the feeling ofwarmth and sociability on a website can be achieved by providing means for a realinteraction with other human beings (through virtual communities, forums, chats, etc.)or stimulating imagined interactions through socially rich texts, images, customgreetings, audio and video featuring human beings acting intelligently (Hassanein &Head, 2005/6; 2007).Using avatars to provide consumer information about products on sale has beensuggested in recent years in order to overcome the impersonal nature, lack of sociabilityand lack of human warmth of internet-based retail-sale (Holzwarth et al, 2006). Theword avatar has its origins in the hindu Sanskrit and can be understood in this contextas a graphical representation which can be animated by means of computer technology(Holzwarth et al, 2006). 4
  5. 5. Nowak and Rauth (2005) conducted a study to evaluate avatars in a static context interms of their androgyny, anthropomorphism, credibility, homophilia, attraction and thepossibility of being chosen during an interaction. Their results sustain that the responsesto the images were consistent with the Uncertainty Reduction Theory. According to thistheory, in an interaction, the first objective of an individual is to reduce uncertaintyabout the person with whom he is interacting. The findings of this study demonstratedthat the anthropomorphism as well as the masculinity or femininity of avatars (theabsence of androgyny) reduces uncertainty about the characteristics of the characterrepresented by the avatar and influences peoples perceptions about it. Anthropomorphicavatars were perceived as more attractive, credible and susceptible of being chosen bypeople to represent them. Female avatars were considered by the participants in thestudy as more attractive than male ones. The majority preferred avatars of their owngender (Nowak & Rauth, 2005). The results of this study contrast, in part, with previousstudies that supported the idea that anthropomorphism would be the biggest predictor ofcredibility of an avatar (Koda, 1996 and Wexelblat, 1997 apud Nowak and Rauth,2005). However, the study of Nowak and Rauth (2005) concludes that the mostinfluential factor is the degree of masculinity or femininity of the avatar (the absence ofandrogyny) . Furthermore, results showed that images with strong features ofmasculinity or femininity were regarded as being more anthropomorphic than imageswithout strong indication of gender.In any case, since avatars are used to represent the seller in a online shop, consumerswill use the information related to the virtual agent similarly to how they reduceuncertainty during their experiences in natural non-mediated environments; but,contrary to face to face interactions where the first impression is the one that gets moreattached to its owner, in a computer mediated environment, the characteristics of anavatar can be tailored to promote any kind of impressions and reactions (Nowak &Rauth, 2005).The potential roles avatars can play in e-commerce sites were studied in depth byMcGoldrick, Keeling and Beatty (2008). Three main roles were acknowledged byconsumers: (1) the role of helper that solves problems; (2) the friendly, sociable, thereceptionist who welcomes; and (3) the personal shop assistant, the recommendation 5
  6. 6. agent. The results also indicate that women are more likely to appreciate the interactionof avatars in any of their roles; that the preference for avatars is inversely proportionalto the age of consumers and the more experienced the consumer, the more he is likely todismiss virtual seller help (McGoldrick et al, 2008). These relationships between age,gender and experience with online shop, as well as the consumer involvement with theproduct (Holzwarth et al, 2006) and the type of the product (Hassanein & Head,2005/2006), suggest that avatars can play an relevant role in online consumersegmentation (McGoldrick et al, 2008). The very nature of the avatar and is level ofanthropomorphism can be adapted to individual preferences. A potentially hugedatabase (A.I.) can inform the avatar about the actions to be taken up rivaling with thebest offline relationship marketing systems (McGoldrick et al, 2008).Given the persuasion ability of avatars in online sales channels (Holzwarth et al 2006),Wang, Baker, Wagner and Wakefield, (2007) focused on the influence of avatars’ socialstimuli on the affection of consumers and on the value attributed to purchases. Theseauthors showed that some of the characteristics of consumer-seller interaction in atraditional bricks and mortar store can be induced in a website using t social stimuli thatare inherent to the avatars. The results obtained in two empirical studies show that theinduced social stimuli can improve the perception of the sociability of the website. Thathas an indirect, but critical, influence on perceptions of the hedonic value and utilityassigned by the consumer to the online store and, consequently, influences thecontinued adoption of the web store (Wang et al, 2007), which confirms what was alsopreviously suggested by Monswé et al (2004).Trust in commerce/e-commerce is normally defined as the conviction for acting inaccordance with the recommendations of the seller and/or website (Cugelman et al,2009). It is the willingness to depend on the goodwill of the trader; and to becomevulnerable to the seller (McKnight, Choudhury & Kacmar, 2002).A recent study by Wang and Fodness (2010) revealed that consumers’ perceptions ofsociability, the emotional answers, and the trust toward the online seller, are morepositive when an avatar with the capacity to be likeable and to create empathy with theconsumer is present on the online store. If avatars are absent, or the avatar is not able togenerate affection and empathy with the consumer, those perceptions are less positive. 6
  7. 7. This result, associated with the findings of Nowak and Rauth (2005) and Nowak,Hamilton, and Hammond (2008) suggests that drawing photo-realistic likeable avatarswhich are able to generate empathy with the consumers can, in fact, generate positiveemotions and induce consumer trust toward the online trader. Trust has been vastlyreported as the first mediating factor between consumer perceptions and intention to buyonline (Cugelman et al, 2009). Thus the following hypotheses are proposed:H1 - Avatars based on real images of human beings and with real human voice inducetrust towards the online seller.H1a – Avatars’ induced trust towards the seller increases the purchase and repurchaseintention.Website credibility has also been identified as an important dimension of onlineshopping. Credibility has been defined as the psychological judgment that the content,the message and its aims are credible (Cugelman, Thelwall, & Dawes, 2009). Althoughcredibility and trust are sometimes used interchangeably, these constructs should not beconsidered synonymous. Trust refers to a set of beliefs, dispositions and behaviorsassociated with the acceptance of risk and vulnerability (Rieh & Danielson, 2007, p. 6).Credibility, which precedes Trust (Cugelman, Thelwall, & Dawes, 2009), refers to aperceived quality of a source, media or message, may or may not result in associatedtrusting behaviors (Rieh & Danielson, 2007, p. 6).Credibility is also intimately tied to persuasion. But these are also distinct constructs.Persuasion is an outcome of credibility and can be operationalized, for instance, bymessage acceptance (Rieh & Danielson, 2007). Source credibility is a criticaldeterminant of message acceptance (Petty & Cacioppo, 1981 apud Rieh & Danielson,2007).Two studies carried out simultaneously by Holzwarth et al. (2006) suggest that the useof avatars to provide information about products increase sale channel effectivenessbased on the Internet. The first study showed that adding an avatar to an online salechannel increases customer satisfaction with the dealer, and has a positive impact inattitude towards the product and purchase intention. The second study showed that the 7
  8. 8. manipulation of the avatar’s attractiveness and expertise makes it more persuasive tocertain segments of consumers depending on their involvement with the product. Moreattractive avatars are more effective for all levels of product involvement; more expertavatars are more effective only for high levels of product involved customers. Thesecond study also showed that the avatar attractiveness influences the perception ofcomparability of the avatar with the person with which it interacts. This comparabilitymediates the influence of the avatar attractiveness on consumer’s persuasion; Similarly,avatar expertise influences the perception of credibility and this mediates the influenceof avatar’s expertise in consumer’s persuasion (Holzwarth et al, 2006; Culgman et al2009). Therefore, and in view of the nature of the present study, we raise the followinghypotheses:H2 - Avatars based on images of real human beings and with real voice inducecredibility in the online store.H2a - Avatars induced credibility in online store increases the purchase and repurchaseintention.2.2 SOCIAL PRESENCE AND SOCIAL RESPONSE THEORIESIn the seventies of the last century John Short, Ederyn Williams and Bruce Christiesuggested in their work "The Social Psychology of Telecommunications" that differentmedia allow for different levels of social presence and sensitive human contact (Short,Williams and Christie, 1976 apud Wang & Fodness, 2010). The social response theory,for its part, argues that the use of human characteristics such as language, voice,interactivity and social role in computers can enhance users social responses despite thefact that users are aware that machines are not human beings (Steuer and Nass, 1993;Reeves & Nass, 1996 apud Wang and Fodness, 2010)Although there are no humans on the Internet, these two theories, sustain that avatarscan induce feelings of sociability on consumers during their interactions with thecomputer (Wang and Fodness, 2010). This implies that avatars exert a social influencesimilar to the one sellers have on brick-and-mortar stores. In a laboratory experimentcarried out by Qiu and Benbasat (2009), results showed that the use of recommendationagents in humanoid form communicating via voice in online stores strongly influenced 8
  9. 9. perceptions of social presence among consumers. In return, consumers’ feelings of trust,perception of fun and, finally, the intentionto adopt the virtual agent as a decision aidincreased.Another experiment developed by Wang and Fodness (2010) with a primitive form ofavatar, displaying limited interaction and low emotional expression (without bodymovements and facial expression) proved that it was able to boost consumer trust andaffection when the avatar was perceived as friendly and could mimic the personalinteractions in a human-computer environment thus inducing a greater perception ofsociability in online consumers. In short: consumers reflexively apply the rulesassociated with social interactions with real salespeople to avatars when they have theability to be kind (Wang & Fodness, 2010).The use of avatars can increase the persuasiveness of online sales channels (Wang et al,2007) increasing their credibility, perceived trust and introducing social stimuli andhuman warmth in interactions and improves consumer satisfaction with the dealer,attitude toward the product and purchase intent (Holzwarth et al, 2006). Hence, thefollowing hypotheses are proposed:H3 - Avatars based on images of real human beings with real voice induce thedevelopment of relationships with greater sociability and human warmth (socialpresence) similar to those normally achieved in traditional commerce.H3a – Sociability and human warmth (social presence) induced by the presence of theavatar increase the intention to purchase and repurchase in the online store. 9
  10. 10. 2.3 CONCEPTUAL MODEL Image 1: Conceptual Model Adapted from Wang and Fodness (2010) Table 1: Variables’ descriptionVariables Description It is the differentiating factor in our model. It consists of three increasing levels of sociability. The first level corresponds to a reduced level of sociability and human warmth stimuli. It consists of an online store displaying only photographs of the products andSociability descriptive texts. The second level corresponds to an online storeLevel equipped with a naturalist avatar endowed with TTS voice that presents the company and describes the products. The third level of sociability corresponds to an online store similar to the previous one, but equipped with a photo-realistic avatar endowed with previously recorded real human voice. Mediator variable. It refers to the conviction of someone in acting in accordance with the recommendations of the seller and/or websiteTrust (Cugelman et al, 2009). The willingness to depend on the goodwill of the trader; The willingness to become vulnerable in relation to the seller (McKnight, Choudhury, & Kacmar, 2002). Mediator variable. What makes someone or something worthy to be believed. The concept of credibility is complex and multidimensional and carries with it many subliminal dimensionsCredibility such as reliability, expertise, dynamism, competence and goodwill (Rieh & Danielson, 2007). On a website the credibility is above all the psychological judgment that the content, the message and its 10
  11. 11. purposes are credible (Cugelman et al, 2009). Mediator variable. Perception of social presence and sensitiveSociability and human contact through the medium (Wang & Fodness, 2010).Human Perception of social stimuli as a courtesy, kindness, empathy andWarmth sympathy.Purchase and Dependent variable. This variable is the core of our study whichRepurchase captures the change of behavior by the presence of avatars in onlineintention stores.3 RESEARCH DESIGNThis study followed an experimental design. This approach was adopted since only anexperiment can ensure the maximum possible control of external variables such as theinfluence of design and degree of sophistication of the website, the influence of the typeof product, price and the always important factor of influence that is the brand.3.1 EXPERIMENTAL PLANThe experimental plan was organized on the form of three groups with control groupand post-test. This experimental design, although simple, is robust both in terms ofinternal validity and in terms of external validity.• R X1 O• R X2 O• R X3 OX1 – In this experience the participants visited a simulated online store (Shop 1)without any kind of avatar. This online shop presented reduced sociability factors suchas photographs and texts. This group worked as the control group because this is themost common form way (traditional treatment) to input sociability factors in onlinestores (Sociability Level 1).X 2- In this experience the participants visited a simulated online store (Shop 2)containing a purely virtual avatar with TTS voice (Sociability Level 2). 11
  12. 12. X 3- In this experience the participants visited a simulated online store (Shop 3)displaying an avatar based on the image of a real human being (photo-realistic with realvoice) representing the trader or one employee (Sociability Level 3).After the treatment (experiments with the free different simulated online shops), thepost-test was administrated (questionnaire) to all groups. Since the distribution ofelements by groups was random, it is considered that they are probabilisticallyequivalent. For this reason there was not pretest.3.2 ONLINE STORESThe three online stores had a technically simple design as similar as possible to a realonline store. The chosen products for sale were sports shoes sSince these are shoppinggoods which do not require a very complex decision making process.There was an entry page where all products were visible (six in total). For each productthere was also a specific page where the product was described in detail. The WebDesign of the three stores was similar with the only exception of the introduction ofavatars in stores 2 and 3.The first store (Shop 1) was a simple interface showing only photographs anddescriptions of the products. 12
  13. 13. Image 2: Homepage of Store 1The second store (Shop 2) included a naturalist female avatar with synthesized TTSvoice. On the entry page the avatar presented the store and the company. On the specificproduct pages the avatar verbalized the products’ features and characteristics. Image 3: Homepage of Store 2 13
  14. 14. The third store (Shop 3) was in all similar to Shop 2. The only difference was that it wasequipped with a photo realistic avatar (based on a real human being) and endowed withpre recorded real human voice. Image 4: Homepage of Store 3The Web Design of these interfaces was deliberately kept simple to minimize itsinfluence on the attitudes of the subjects of the experiment. The information transmittedorally by avatars in Shops 2 and 3 were exactly the same as the text of Store 1 andproduct prices were the same. The intention was to take full advantage of the presenceof avatars and their possible influence on the participants.In accordance with the findings of Nowak and Rauth (2005), female avatars werechosen to appear in Online Shops because they are perceived by consumers to be moreattractive.Before entering into the main page of the stores, subjects were presented with a set ofpages with instructions about the experiment and about technical features of thewebsites to ensure perfect navigation. 14
  15. 15. Image 5: Female Avatars used on the experimentThe technology used for the construction of the avatars was provided by Oddcast Inc.1and is available at SitePal Website2.3.3 QUESTIONNAIREA questionnaire was developed and presented to each of the subjects after theexperiment. This questionnaire contained questions (7 points Likert Scales ) to measure"Trust" (5 items adapted from the study of Bart, Shankar, Sultan and Urban, 2005),"Credibility" (4 items adapted from the study of Cugelman, Dawes and the Wall, 2009)," Sociability and human warmth" (9 items, adapted from Wang and Fodness2010) and"Purchase and Repurchase Intention" also adapted from the study of Wang and Fodness(2010).1 http://www.oddcast.com2 http://www.sitepal.com 15
  16. 16. 3.4 SAMPLEThe subjects of the experiment were recruited online through social media (Facebookand Linkedin) and Electronic Mail. Participants were randomly assigned to the threegroups and subsequently they were contacted by email and social media websites withinstructions to carry out the experiment and to answer the questionnaire.The restriction of the recruitment process to the Internet aimed to control externalvariables like technology acceptance level in order to ensure all subjects recruited wereskilled in Internet Technologies.150 persons were recruited to perform the experiment. 98 questionnaires were validlyanswered. Each of the three groups comprised a sample above thirty elements in orderto preserve the external validity of the experiment: In the X1 experiment (Controlgroup) have participated 33 subjects, 31 in X2 and 33 in X3.4 FINDINGS4.1 SAMPLE PROFILEThe majority of the subjects were college graduates (57.1%). 23.5% had completedsecondary education and 12.2% had incomplete secondary education. 7.2% of thesubjects had only primary education. In what concerns occupation, 23.5% of theparticipants were students, 16.3% belonged to the professional-managerial group and15.3% were Industrial/Skilled workers;Regarding usage of internet, 85.7% of the subjects reported having already purchased atleast once on the Internet, 56.1% reported purchasing on the Internet several times ayear and 13.3% reported doing it every month. Online banking operations are performedby 60.2% of the subjects. If we consider the simultaneous use of the Internet to performbanking operations and to buy goods or services to be an "advanced usage", we shouldthen consider that 58.2% of the subjects fall into this category. 16
  17. 17. 4.2 DATA ANALYSIS4.2.1 RELIABILITY TESTS OF THE MEASUREMENT SCALESThe reliability of scales used measure the latent constructs "Trust”, “Credibility","Sociability and human warmth" and "Purchase and repurchase intention" was testedusing Cronbachs Alpha. The results confirm their internal consistency. Table 2: Reliability tests results Cronbach’s Alpha Cronbach’s Alpha N of Items Based on Standardized ItemsTrust Scale ,943 ,944 5Credibility Scale ,923 ,926 4Sociability and ,964 ,964 9Human WarmthScalePurchase and ,968 ,968 3RepurchaseIntention ScaleGiven these results, four new composite variables were created using the arithmeticmean of each group of items corresponding to the latent constructs "Trust","Credibility", "Sociability and Human Warmth", " Purchase and Repurchase Intention".4.2.2 TEST OF HYPOTHESISTo test hypotheses H1, H2, H3 we performed an analysis of variance (one factorANOVA). We tested the variance of the variables’ mean ("Trust", "Credibility","Sociability and human Warmth") as a function of the factor “Sociability Level". Thisfactor, a qualitative independent variable that we manipulated, contains three levelscorresponding to each type of treatment that each group was submitted to. The"Sociability Level 1" corresponds to the simple store without avatar (Store 1), the“Sociability Level 2” (Store 2) corresponds to the store with the presence of anaturalistic avatar with TTS voice and the "Sociability Level 3” (Store 3) corresponds tothe store with the presence of photo-realistic avatar with real human voice. 17
  18. 18. The proposed model does not include any controlled treatment between the mediatorlatent constructs "Trust," Credibility", "Sociability and Human Warmth" and theconstruct "Purchase and Repurchase Intention" . Due to that, and to the fact that theseconstructs were strongly correlated, we assessed the linear relationship between the laterconstruct and mediator variables through a partial correlation analysis in order to testthe hypotheses H1a, H2a, H3a thus trying to weigh their individual importance aspredictors of “Purchase and Repurchase Intention”. However a word of caution is inorder stressing that this cause-and-effect relationship is merely an assumption of ourmodel for the purposes of this research and not an inferential property of the statisticaltechnique used.4.2.2.1 One Factor ANOVAThe assumptions to be considered for the ANOVA were the following:H0: The three experimental groups, defined by the factor "Sociability Level", have thesame mean concerning to "Trust", "Credibility" and "Sociability and Human Warmth". ( = = )Ha: There is at least one of the experimental groups, defined by the factor "SociabilityLevel", which has a different mean from another group (all means µi are not equal). 18
  19. 19. Decision rule:Not reject H0: if > = 0,05Reject H0 (accept Ha) if ≤ = 0,05Table 3 presents the results of the Anova analysis. Based on these results, we reject thenull hypothesis. Consequently, there is a significant difference of means at leastbetween two groups. Table 3: One factor Anova results ANOVA Sum of df Mean F Sig. Squares Square Between Groups 22,916 2 11,458 6,486 ,002Trust Within Groups 167,821 95 1,767 Total 190,736 97 Between Groups 30,801 2 15,401 8,377 ,000Credibility Within Groups 174,643 95 1,838 Total 205,444 97 Between Groups 45,308 2 22,654 11,500 ,000Sociability and Human Within Groups 187,137 95 1,970Warmth Total 232,444 97In order to identify the groups which are different we analyzed the table generated byScheffé post-hoc test (Table 4 and 5). Underpinned on the results, we can say that themeans for the three variables are arranged in ascending order, the lowest one beingGroup 1, followed by Group 2 and Group 3 which displays the highest mean. Thevariable that has higher mean is "Sociability and Human Warmth", followed by"Credibility" and "Trust". Figure 1 presents a clear perspective of these differences. 19
  20. 20. Table 4: Scheffés multiple comparisons tableScheffe 95% Confidence Interval Mean Difference Lower UpperDependent Variable (I-J) Std. Error Sig. Bound BoundTrust Nível 1 Nível 2 -,76755 ,33006 ,072 -1,5884 ,0533 * Nível 3 -1,14742 ,32479 ,003 -1,9551 -,3397 Nível 2 Nível 1 ,76755 ,33006 ,072 -,0533 1,5884 Nível 3 -,37986 ,33244 ,523 -1,2066 ,4469 * Nível 3 Nível 1 1,14742 ,32479 ,003 ,3397 1,9551 Nível 2 ,37986 ,33244 ,523 -,4469 1,2066 *Credibiity Nível 1 Nível 2 -,88283 ,33671 ,036 -1,7202 -,0455 * Nível 3 -1,33200 ,33132 ,001 -2,1560 -,5080 * Nível 2 Nível 1 ,88283 ,33671 ,036 ,0455 1,7202 Nível 3 -,44917 ,33913 ,419 -1,2925 ,3942 * Nível 3 Nível 1 1,33200 ,33132 ,001 ,5080 2,1560 Nível 2 ,44917 ,33913 ,419 -,3942 1,2925 *Sociability Nível 1 Nível 2 -1,27641 ,34854 ,002 -2,1432 -,4096and Human * Nível 3 -1,53773 ,34297 ,000 -2,3907 -,6848Warmth * Nível 2 Nível 1 1,27641 ,34854 ,002 ,4096 2,1432 Nível 3 -,26132 ,35105 ,759 -1,1343 ,6117 * Nível 3 Nível 1 1,53773 ,34297 ,000 ,6848 2,3907 Nível 2 ,26132 ,35105 ,759 -,6117 1,1343*. The mean difference is significant at the 0.05 level. Table 5: Table of meansSociability Trust Credibility Sociability and Human WamthLevel 1 3,6647 3,7059 3,7451Level 2 4,4323 4,5887 5,0215Level 3 4,8121 5,0379 5,2828Total 4,2939 4,4337 4,6667 20
  21. 21. Image 6: Means by Sociability LevelThe difference of means was always statistically significant between Group I and GroupIII. That is, the presence of photo-realistic Avatar with real voice always influencesconsumer perceptions when compared to the website without avatar in all variablesunder study. The presence of the naturalistic avatar with TTS voice had a significantimpact concerning the variables "Credibility" and "Sociability and Human Warmth". Itwas not significant concerning "Trust". The differences between avatars with TTS voiceand the photo-realistic avatars with real voice were not statistically significant. 21
  22. 22. 4.2.2.2 Partial CorrelationsThe analysis of scatter charts between the variable "Purchase and Repurchase Intention"and the variables "Trust", "Credibility" and "Sociability and Human Warmth" revealthat there was a linear relationship between these variables. Image 7: Linear CorrelationsIn order to verify the strength of these linear relationships, and their individualizpredictive capacity, analysis of partial correlations was run between “Trust”,“Credibility”, “Sociability and Human Warmth” and the dependent variable “Purchaseand Repurchase Intention”.While simple correlation is a measure of linear association between two variables, thecoefficient of partial correlation measures the association between two variables aftercontrolling the effect of one or more mediator variables (Malhotra, 2006). This analysisallows us to understand: • the strength of the relationship between “Purchase and Repurchase Intention” and “Trust” when the effects of “Credibility” and “Sociability and Human Warmth” are controlled for • the strength of the relationship between “Purchase and Repurchase Intention” and “Credibility” when the effects of “Trust” and “Sociability and Human Warmth” are controlled for 22
  23. 23. • The strength of the relationship between “Purchase and Repurchase Intention” and “Sociability and Human Warmth” when the effects of “Trust” and the “Credibility” are controlled forTable 6 presents simple correlation coefficient (Pearson’s r), zero-order because it doesnot control any other intervenient variable. This analysis shows that the correlationsbetween all the pairs of variables are positive and very strong ( | r |≥ 0,75) when none ofthe other variables are controlled for. Table 6: Zero-order (Pearson) correlations Correlations Purchase and Repurchase Sociability andControl Variables Intention Trust Credibility Human Warmth a-none- Purchase Correlation 1,000 ,879 ,854 ,899 and Repurchase Significance (2- ,000 ,000 ,000 Intention tailed) df 0 96 96 96 Trust Correlation ,879 1,000 ,881 ,848 Significance (2- ,000 ,000 ,000 tailed) df 96 0 96 96 Credibility Correlation ,854 ,881 1,000 ,873 Significance (2- ,000 ,000 ,000 tailed) df 96 96 0 96 Sociability Correlation ,899 ,848 ,873 1,000 and Human Warmth Significance (2- ,000 ,000 ,000 tailed) df 96 96 96 0a. Cells contain zero-order (Pearson) correlations. 23
  24. 24. Subsequently, we assessed the strength of the relationship when mediating variableswere controlled for. Table 7 presents the results for the association between “Purchaseand Repurchase Intention” and “Trust” controlling for the variables “Credibility” and“Sociability and Human Warmth”. Results show thatthe second order partial correlationcoefficient is r=0,412, which is a moderate but significant positive correlation. Table 7: Partial correlation between “Purchase and Repurchase Intention” and “Trust”Control Trustvariables Purchase and Repurchase IntentionCredibility & Purchase Correlation 1,000 ,412Sociability and Significance ,000and Human Repurchase (2-tailed)Warmth Intention df 0 94 Trust Correlation ,412 1,000 Significance ,000 (2-tailed) df 94 0We calculated the strength of the association between “Purchase and RepurchaseIntention” and “Credibility” controlling for the variables “Trust” and “Sociability andHuman Warmth” (Table 8). The correlation between “Credibility” and “Purchase andRepurchase Intention” is spurious. It’s very weak (r=0,070). The existing initial strongcorrelation (r=0,854) disappears when “Sociability and Human Warmth” and “Trust”were controlled for.Table 8: Partial correlation between Purchase and Repurchase Intention and CredibilityControl Purchase and Repurchase Intention CredibilityvariablesSociability Purchase Correlation 1,000 ,070and andHuman Repurchase Significance (2- ,500Warmth & Intention tailed)Trust df 0 94 Credibility Correlation ,070 1,000 Significance (2- ,500 tailed) df 94 0 24
  25. 25. Finally, we analyzed the association between “Purchase and Repurchase Intention” and“Sociability and Human Warmth” controlling for the variables “Credibility” and“Trust”. Results reveal that the relationship between “Purchase and RepurchaseIntention” and “Sociability and Human Warmth” remains strong (r= 0,533)Table 9: Partial correlation between Purchase and Repurchase Intention and Sociabilityand Human WarmthControl Purchase and Repurchase Sociability and Humanvariables Intention WarmthTrust & Purchase Correlation 1,000 ,533Credibility and Repurcha Significanc ,000 se e (2-tailed) Intention df 0 94 Sociability Correlation ,533 1,000 and Human Significanc ,000 Warmth e (2-tailed) df 94 0We can thus conclude that “Sociability and Human Warmth” and “Trust”, withemphasis on first one, are predictive variables of “Purchase and Repurchase Intention”.We also conclude that “Credibility” has a null predictive effect. Its prior simplecorrelation (Pearson’s r) with the “Purchase and Repurchase Intention” is exclusivelydue to the fact of being associated with the other variables.5 DISCUSSIONOverall, the results confirm the proposed hypotheses (H1, H2 and H3): photo-realisticavatars endowed with pre recorded real human voice in a online store induce increasedfeelings of trust, credibility and sociability and human warmth when compared with anonline store enriched with only images and text. Naturalistic avatars endowed with TTSvoice did not confirm the generality of the existing literature about the capacity ofavatars to induce feelings of trust. However they confirmed previous studies in whatconcerns credibility and sociability and human warmth. This result may be due to thefact that our TTS avatar did not present the necessary ability to be likeable and to evoke 25
  26. 26. empathy with the subjects giving them increased feelings of trust towards the seller(Wang &Fodness, 2010).Although the means obtained were higher, photo-realistic avatars, with the exception ofof "Trust", did not seem to induce notable differences in perceptions of consumers whencompared with the naturalistic TTS voice avatars. The differences in the evaluationsmade by the subjects of the experiment, which in all cases favorable to the photo-realistic avatar, are not statistically significant. Again, a possible explanation for thisresult may be the fact that our photo-realistic avatar was not perceived as significantlydifferent from the TTS avatar in order to be perceived by subjects as more likeable andcapable to generate increased empathy. Another explanation may be the fact thatadvances in TTS technology nowadays have rendered it is so similar to human voicethat it can create generally the same feelings of empathy and perception of sociability asphoto-realist avatars with real human voice. However, Qiu and Benbasat (2009)concluded that TTS voice does not carry significant social stimulations when comparedwith real human voice. It should also be taken into account that the subjects may havenot perceived the photo-realistic avatar as a representation of a real human being.Concerning the mediating influence of "Trust", "Credibility" and "Sociability andHuman Warmth" on consumers’ "Purchase and Repurchase Intention" (hypotheses H1a,H2a, H3a) the results confirm the importance of the induced active feelings of trust andsociability and human warmth with special significance for the later. This result is, ingeneral, consistent with the previous studies (Wang & Fodness, 2010; Hassanein &Head, 2005/06; 2007).Unlike the other two variables, “Credibility” has no influence on the consumers’purchase and repurchase intention. When the effects of “Trust" and "Sociability andHuman Warmth” are controlled for, there is no correlation between credibility andconsumers’ purchase and repurchase intentions. This result contradicts, in part, thestudies developed by Cugelman et al (2009 ) who conclude that the credibility of a website, although mediates "Trust", has a significant direct impact on consumer behavior.Our result may be due to the fact of concepts of credibility and trust are related and ingeneral credibility precedes trust. In fact, humans trust on what they first consider to becredible. An alternative explanation may be the type of product: simple sports shoes do 26
  27. 27. not involve such technical complexity and such a high price level that their purchaserequires superior levels of credibility for the average consumer.The mediator variable most positively correlated with "Purchase and RepurchaseIntention" is, according to the results, "Sociability and Human Warmth" whichdemonstrates the importance of sociability factors in E.C. sites, whose study is aprimary goal of this investigation. As sustained by the literature, “Trust”, has also asignificant positive correlation with "Purchase and Repurchase Intention".6 CONCLUSIONSThis article focuses on introduction of avatars as sociability and human warmth stimuliin sites of electronic commerce and its implications for digital marketing. Overall, thestudy validates the proposed model we can conclude that the introduction of avatars atEC sites, particularly photo-realistic avatars, has visible practical effects in sociabilityand human warmth perceptions, in trust towards the seller and in the credibility of theonline store. This technology, when combined with A.I., is also promising in the fieldof Customer Relationship Management (now transformed into e-CRM), in the marketsegmentation and in lead generation. A.I., based on libraries of knowledge aboutcustomers can equip avatars with the ability to recognize the customer with whom theyare dealing with and create a personalized relationship making suggestions aboutproducts based on their purchase history. Companies can take advantage from thiscapability providing as much information as possible to their client, improving theirshopping experience and reducing operating costs (Dionísio, Rodrigues, Faria, Canhoto,& Nunes, 2009, p. 41). Customization is a key variable in digital marketing. These arefields that we believe both practitioners and marketing researchers should pay specialattention.Finally, underpinned on this study, as also on the findings of Wang and Fodness (2010)and Qiu and Benbasat (2009), we can say that animated avatars exert an influence ononline consumers similar to real salespeople. This affordable technology may constitutea lever for small retail companies to enter the E.C. world and thus extend their market,add value to their business, control costs and promote their financial sustainability. 27
  28. 28. 6.1 IMPLICATIONS FOR MANAGEMENTIn addition to contributing to the body of knowledge about the role of avatars in onlinestores, particularly about the photo-realistic avatars, this experiment aimed to assess thepotential of this technology for small retail companies’ web presence.Thus, the results of our experiment are useful for the management of small retailersbecause they confirm the utility and advantages of this technology. Managers shouldlook at it as an affordable way to shift their activity to electronic commerce and profitfrom their knowledge and experience about personalized relationship in this new saleschannel.Despite the fact that purchases can occur in other channels, nowadays, Internet has amajor influence in purchase decisions. Consumers search for information aboutproducts and prices before buying online. An attractive internet presence inducing trust,credibility, sociability and human warmth, and capable of creating imagined rich socialrelations with the costumer, can also increase demand in physical stores (Paulo, 2012).Only by being financially strong and stable, can small retailers preserve their traditionalphysical presence in the historic centers of cities. Paradoxically, that can be achievedby promoting their expansion to the virtual world through Electronic Commerce.6.2 LIMITATIONS AND DIRECTIONS FOR FURTHER RESEARCHThis research is not without limitations. A single experiment conducted online haslimited generability to assess all the implications of the introduction of photo-realisticavatars endowed with real human voice as a sociability factor in e-commerce sites.New experiments with larger samples should be conducted. Conducting a similarexperiment in a strict laboratory environment in order to ensure the homogeneity oftechnical conditions among subjects (monitors, processing speed, Internet access,loading speed of applications, quality and volume of audio and the use headphones toensure subjects concentration on the experiment) could also be considered.The difficulty to operationalize, and even distinguish constructs such as "credibility","Trust" and "Sociability and Human Warmth” also presents some limitations. Theseconstructs have idiosyncratic implications and are interpreted differently by consumersdepending on their ages and cultures (Wang & Fodness, 2010). 28
  29. 29. Despite the fact that the recruitment of our sample has been performed in a universemuch larger than a college campus, and thereby tried to escape what is called "thescience of university students" we still must consider that it is wounded with someconvenience due to the fact that subjects were recruited only through the Internet. Thismethodology was suitable for controlling the variable "Technology acceptance level",but prevents us from generalizing the results to those not accustomed to dealing with theInternet and the Electronic Commerce. Broader samples, in order to obtain a betterrepresentation of the population, should be tried.One aspect that has not been assessed by us is the interaction between avatars (whichmust vary their expertise and even their appearance: age, gender, etc.) type of productand online stores design. Trust and credibility towards the seller or a store that sellsbasic clothes or footwear and high end stores are distinct. The manipulation of avatars’attractiveness and expertise makes them more effective for different types of consumers.Expertise, for example, has positive effects on more involved consumers with theproduct. This is prevalent when it comes to expensive and technically advancedproducts. Thus we can also assess the possible contributions of the avatars for customersegmentation. This functionality can be achieved by equipping them with "artificialintelligence" (AI). That was not considered in our study. A.I. also allows introducing ahigher level of interactivity and achieving a two-way interaction between the avatar andthe consumer. That was not possible in our study either.Another path of research is the use of photo-realistic avatars based on the image ofopinion leaders. This may lead to a greater identification between the consumer and thevirtual entity and consequently have implications on consumers purchase andrepurchase intentions. 29
  30. 30. APENDIX A – QUESTIONNAIRE S TRUCTURETrust Scale:Tell us on a scale of 1 to 7 your degree of agreement with the followingstatements:1 (completely disagree). . . 7 (completely agree)1 - This electronic shop seems to me more trust inspiring than others Ivevisited.2 - This electronic shop belongs to a company that will fulfill what iscommitted.3 - The information exposed in this electronic store deserves my confidence.4 - I trust on the recommendations that are made on this electronic shop.5 - I think this company is honest.Adapted from Bart, Shankar, Sultan and Urban (2005)Credibility Scale:Tell us on a scale of 1 to 7 the degree of agreement with the followingstatements:1 - The product information provided on this electronic shop is credible.1 (nothing credible) ... 7 (fully credible)2 - The product information provided on this electronic shop is correct.1 (none correct) ... 7 (totally correct)3 - Is the seller a specialist in their business?1 (no specialist) ... 7 (highly specialized)4 – This electronic shop seems professional to you?1 (nothing professional) ... 7 (highly professional)Adapted from Cugelman, Thewall and Dawes (2009) 30
  31. 31. Sociability and Human Warmth Scale:For each one of these adjectives indicate in a scale of 1 to 7 how they describethe electronic store that you have visited (1 = describes so very poor, 7 =describes perfectly)- Friendly- Warm- Helpful- Polished- Informational- IntelligentRate on a scale 1-7 how you felt when visiting this electronic shop (1 =describes so very poor, 7 = describes perfectly).- Pleased- Satisfied- RelaxedAdapted from Wang and Fodness (2010)Scale of Purchase and Repurchase IntentionTell us on a scale of 1 to 7 your degree of agreement with the followingstatements:1 (completely disagree). . . 7 (completely agree)1 - The atmosphere created by this store convinced me to buy a product.2 - The atmosphere created at this store makes me feel comfortable torecommend a friend to buy a product on it.3 - I will become a customer of this store and come back whenever you needto buy new products.Adapted from Wang and Fodness (2010) 31
  32. 32. Internet use:1) How often do you access the internet?- Everyday- A few times a week;- A few times a month;2) You use internet mainly for (can choose more than one option):- Read newspapers, magazines, blogs and search for diverse information(products, health, travel, government issues, etc.)- Play online;- Participate in social networks (Facebook, Twitter, Linkedin, Goggle +, etc.);- Write on blogs;- Work;- Study;- Perform banking operations;- Shopping;- Other.Attitude toward Electronic Commerce:Have you ever bought on the internet? (Yes, No) If you answered "yes" also answer the following questions: 1. What is your buying frequency? • Every week; • Every month; • Several times a year; • Very sporadically (Years go by without buying on the Internet). 2. What kind of products do you usually buy on the Internet? • Travel / Hotel Bookings; • Food and other products for domestic consumption; • Clothing and footwear; • Books, CDs, DVDs; • Electronic games and software; 32
  33. 33. • Electronic equipment and computers; • Home appliancesSociographic Data- Age- Sex- Professional Group- Academic qualifications 33
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