Retailer response to negative online consumer reviews: how can damaged trust be effectively repaired?

Abstract

Social commerce has significantly enlarged consumer power through the convenience of posting and accessing online customer reviews. While positive comments may help to boost an online retailer’s reputation, the visibility of negative comments may significantly damage the retailer’s reputation. The purpose of this paper is to study trust violations caused by negative comments and corresponding retailer response strategies for trust repair thereby determining which response strategies should be chosen to repair consumer trust most effectively. Structured equation modeling method is applied to test how negative comments affect user trust, and a trust repair model to test how the company’s responses affect trust repair. The results show that perceived retailer service problems including quality problem, attitude problem and fulfillment problem reflected in negative reviews have significant negative impacts on three dimensions of consumer trust beliefs (benevolence, integrity and competence), and consumer trust beliefs have significant impacts on consumer purchase intentions. The results also show that different response strategies tend to reduce the degree of the perceived problems differently, an apology strategy was only effective in the recovery of attitude problem perceptions, while an explanation strategy had the most significant impact on the recovery of all three service problem perceptions, and a compensation strategy was effective in the recovery of quality problem perceptions. These response strategies change consumers’ perception of service problems, then further repair customer trust and hence purchase intentions.