Reputable internet retailers' service quality and social media use

Abstract

Previous literature suggests that retailer reputation is a key competitive factor because customers trust reputable retailers. According to the conventional reputation creation framework, service quality plays a critical role in reputation building. A retailer's reputation is enhanced when customers perceive high service quality. Our research question addresses whether an Internet retailer's service quality is associated with the retailer's reputation in reality beyond customer perception. To answer the question, this study uses an objective, not perceptual, measure of reputation and compares service quality of reputable and non-reputable Internet retailers. Internet retailers use social media marketing to build their reputation. Therefore, this study also examines the relationship between social media use and reputation. Service quality information of 619 Internet retailers was collected and analyzed from online customer reviews. Retailer use of social media was measured by visiting their websites. The binary logistic regression models show some unmatched linkages between service quality and reputation. Our results suggest that reputable retailers do not provide higher service quality which disproves the conventional reputation creation framework. Instead, this study suggests social media marketing is an alternative source of reputation.