752045

research-article2018
MRE0010.1177/1470785317752045International Journal of Market ResearchPee et al.

Article

International Journal of

E-store loyalty: Longitudinal

Market Research
2019, Vol. 61(2) 178­–194
© The Author(s) 2018
comparison of website usefulness Article reuse guidelines:
sagepub.com/journals-permissions
and satisfaction DOI: 10.1177/1470785317752045
https://doi.org/10.1177/1470785317752045
journals.sagepub.com/home/mre

LG Pee
Nanyang Technological University, Singapore

JJ Jiang and G Klein

National Taiwan University, Taiwan and University of Colorado, Colorado Springs, Colorado

Abstract
Customer loyalty is vital to the survival of online stores. Many cross-sectional studies have shown
that e-store loyalty is strongly affected by perceived website usefulness (PU) and satisfaction
with a purchase experience. By its very nature, loyalty develops cumulatively over multiple
purchases. Yet, our understanding of how longitudinal changes in PU and satisfaction influence
the development of (i.e., change in) loyalty remains limited. Drawing upon the information-
processing perspective and experiential perspective of customer evaluation, this study shows
that PU has a stronger effect on loyalty in the first purchase. In subsequent purchases, PU changes
less (i.e., is more stable) than satisfaction. Furthermore, change in satisfaction has a stronger
effect in the development of (i.e., change in) loyalty. This study extends research by clarifying
the differential longitudinal changes and effects of two important antecedents of e-store loyalty.
For practitioners, the findings suggest a longitudinal approach to initiate and nurture e-store
loyalty that focuses on clarifying the usefulness of website to new customers, while increasing
the satisfaction of returning customers.

Keywords
e-store loyalty, experiential evaluation, information processing, latent growth modeling,
perceived usefulness, satisfaction

Introduction
Customer loyalty is vital to the success of online stores, which compete in an ever-advancing tech-
nological realm. Online shoppers have virtually instant access to the best deals through powerful

Corresponding author:
LG Pee, Nanyang Technological University, 31 Nanyang Link, Singapore 637718.
Email: peelg@ntu.edu.sg
Pee et al. 179

search engines and competitors are just a click away (Reichheld & Schefter, 2000). E-store loyalty
generates repeat sales, increases customers’ willingness to pay a premium, strengthens customers’
resistance against competitors’ marketing effort, and reduces customer acquisition cost as loyal
customers are often eager to spread positive word-of-mouth (Roy, Lassar, & Butaney, 2014;
Toufaily, Ricard, & Perrien, 2013).
Much research has established that online shoppers’ loyalty is significantly and directly affected
by the antecedents of perceived website usefulness (PU) and satisfaction (e.g., Cenfetelli, Benbasat,
& Al-Natour, 2008; Devaraj, Fan, & Kohli, 2002; Jiang & Benbasat, 2007a; Kim, Ferrin, & Rao,
2009; Koufaris, 2002). It has been shown that evaluations of PU and satisfaction jointly account
for more than 54% of the variance in continued usage of e-stores (Cenfetelli et al., 2008). Loyalty
develops cumulatively over time as customers make multiple purchases (Keiningham, Aksoy,
Malthouse, Bouye, & Lariviere, 2012; Oliver, 1999). It is therefore imperative to go beyond a static
understanding of its antecedents to study how their changes affect the development of loyalty. Both
offline and online shopping research suggests that PU and satisfaction can change over purchases.
As early as the 1980s, LaBarbera and Mazursky (1983) found that customers’ evaluation of satis-
faction changes significantly from one purchase to the next. A more recent study continued to
observe longitudinal change in customers’ satisfaction with offline businesses (Keiningham et al.,
2012). E-commerce researchers have also argued that evaluations of PU (e.g., Al-Natour &
Benbasat, 2009) and satisfaction (e.g., Cenfetelli et al., 2008) change over purchases.
As different antecedents of online shoppers’ loyalty, PU, and satisfaction might change differ-
ently over time, the effects of their change on loyalty could not be assumed to be identical. To
understand the potential differences, we draw upon the information-processing perspective and
experiential perspective of customer evaluation (Holbrook & Hirschman, 1982). PU is essentially
an information processing–based evaluation relying on more observable aspects of an e-store’s web-
site. It is therefore more confidently assessed and has a stronger impact on loyalty intention in the
initial purchase. PU is also based on the evaluation of more static aspects of a website and can be
expected to change less (i.e., more stable) than satisfaction. In contrast, satisfaction is an experien-
tial evaluation based on imagery and sensory elements of a purchase experience rather than instru-
mental gains. Customers are likely to rely less on satisfaction in determining their loyalty intention
in the initial purchase due to the lack of clear and reliable anchors for confident evaluation. In sub-
sequent purchases, customers tend to shift attention away from the more firmly established PU to
focus on better evaluating their satisfaction. A panel survey was conducted to test these hypotheses.
Data over four purchases were collected and findings indicate support for the hypotheses.
This study contributes to research by clarifying how e-store loyalty, which by definition devel-
ops longitudinally, is differentially affected by change in PU and change in satisfaction over pur-
chases. Our findings add a new dimension of understanding to the conceptualization of online
shoppers’ loyalty. The differential longitudinal effects are explained theoretically in terms of the
information-processing perspective and experiential perspective of customer evaluation (Holbrook
& Hirschman, 1982) and tested empirically with panel data. Theorizing the changes and their
effects is central to e-commerce researchers’ endeavor to advance a theory of online shoppers’
loyalty (Toufaily, Ricard, & Perrien, 2012; Valvi & Fragkos, 2012). For practitioners, the findings
of this study suggest that e-stores could turn visitors into new customers by focusing on PU, and
turn new customers into returning customers by focusing on their satisfaction. This longitudinal,
continuing approach is more in line with the inherent evolving nature of loyalty.

Conceptual background
This section defines customer loyalty and shows that PU and satisfaction are the key antecedents
of e-store loyalty in research on online shoppers’ loyalty. This is followed by a description of the
180 International Journal of Market Research 61(2)

information-processing perspective and experiential perspective of customer evaluation, which are

the theoretical bases for the hypotheses of this study.

E-store loyalty and key antecedents

Customer loyalty is the preference for, as well as intention to, repurchase from the website of an
e-store. Consumer behavior research widely recognizes that customer loyalty develops over time.
Distinguishing between loyalty and satisfaction, Oliver (1999) clarifies that loyalty is an attained
state of enduring preference that is developed from concurrent satisfying episodes, while satisfac-
tion as a pleasurable fulfillment “is a fairly temporal postusage state for one-time consumption or
a repeatedly experienced state for ongoing consumption” (Oliver, 1999, p. 41). For satisfaction to
influence loyalty, “frequent or cumulative satisfaction is required so that individual satisfaction
episodes become aggregated or blended” (Oliver, 1999, p. 34). Satisfaction and loyalty are inde-
pendent such that a satisfied customer may not necessarily be loyal. Similarly, Johnson, Anderson,
and Fornell (1995) and Yi and La (2004) emphasized that it is a customer’s cumulative evaluation
of purchase experiences, rather than a single purchase, that influences loyalty. Although e-com-
merce researchers have begun to note that repeat purchases might be necessary for developing
loyalty (e.g., Kim et al., 2009), there is still a lack of studies that go beyond a static approach and
examine the longitudinal development of loyalty based on changes in its antecedents.
This study focuses on the development of customer loyalty toward an online store over multiple
purchases through its website, which is different from the development of loyalty as a single durable
product is being consumed over time (e.g., car). Most longitudinal studies on loyalty have focused
on the latter. Our review of studies on online shoppers’ loyalty (see the last column of Table 1)
shows that most studies relied on data collected before and/or after a single purchase. Only one
study collected data on two purchases, but one of them is an offline purchase since the study focused
on e-commerce channel preference (Devaraj et al., 2002). Studying loyalty over multiple online
purchases allows the examination of changes and their effects and can potentially offer new insights.
PU and satisfaction are two strong antecedents of online shoppers’ loyalty, as found in many
studies (see Table 1). Prior studies have identified these antecedents based on between-individual
analyses. Since the development of loyalty is essentially a process of within-individual change
(i.e., from new to loyal customer), it remains necessary to study within-individual changes in the
antecedents and their impacts directly. By using multi-purchase data in this study, we were able to
avoid making inferences about the within-individual development of loyalty from between-indi-
vidual analyses.

Information processing–based and experiential perspectives of customer evaluation

Customer loyalty is developed within an individual over purchases as a function of psychological
evaluative processes (Jacoby & Kyner, 1973; Toufaily et al., 2012), which can be understood from
both the information-processing and experiential perspectives (Holbrook & Hirschman, 1982). The
information-processing perspective views a customer as a goal-directed “logical thinker” who
focuses on tangible benefits, utilitarian functions, and objective features. The secondary processes
of “searching for information, retrieving memory cues, weighing evidence, and arriving at carefully
considered judgmental evaluations” are employed (Holbrook & Hirschman, 1982, p. 135). These
processes are secondary in that they reflect one’s mental processing function due to socialization. In
contrast, the experiential perspective views customers as engaging in a flow of feelings based on
subjective characteristics and sensory cues, seeking fun, arousal, and enjoyment. The primary pro-
cess of thinking that “hearkens back to the way a baby pursues immediate pleasure or gratification”
(Holbrook & Hirschman, 1982, p. 135) is employed. Holbrook and Hirschman (1982) emphasized
Pee et al. 181

that both information-processing and experiential perspectives capture important aspects of con-
sumption and neglecting one of them limits our understanding of consumer behavior.
The information-processing perspective and experiential perspective of customer evaluation are
useful for understanding the conceptual distinction between PU and satisfaction. PU is the degree
to which a customer believes that a website helps achieve shopping goals. Being similar to value,
PU comprises utilitarian facets such as convenience, price, information, and security (Childers,
Carr, Peck, & Carson, 2002; Khalifa & Liu, 2007; Kim et al., 2009). Satisfaction is an immediate
affective reaction to the appraisal of a specific e-store (Cenfetelli et al., 2008). Satisfaction is dis-
tinct from PU in that “even if an individual is dissatisfied with a website, she may continue to use
it because she finds it useful” (Cenfetelli et al., 2008, p. 168). While the evaluation of PU focuses
on the instrumental, utilitarian aspects of a website, satisfaction is driven by the affective appraisal
of an experience. PU captures the instrumentality of using an e-commerce website, while satisfac-
tion is a more transient, experience-specific affective evaluation of “whether a consumption expe-
rience was as pleasurable as expected” (Bhattacherjee, 2001, p. 354).

Hypothesis development
This study aims to understand differential changes in PU and satisfaction over time as multiple
purchases are made, and differential effects of the changes on e-store loyalty. As mentioned earlier,
PU is essentially an information processing–based evaluation, while satisfaction is an experiential
evaluation. Accordingly, we hypothesize that PU has a stronger effect on loyalty intention in the
initial purchase. Subsequently, PU changes less over purchases compared to satisfaction (i.e., PU
is more stable), while change in satisfaction has a stronger effect on loyalty than change in PU.
These three hypotheses are justified next.

Comparing effects of PU and satisfaction in the initial purchase

PU is an evaluation of the utilitarian aspects of e-stores, assessing attainment of goals such as shop-
ping productivity and effectiveness (Childers et al., 2002). Similarly, Kim et al. (2009) conceptual-
ized PU in terms of whether a website improves productivity, effectiveness, and performance in
shopping. Employing a belief elicitation process, Khalifa and Liu (2007) found that key aspects of
an e-commerce website’s PU include transaction efficiency, convenience, security, cost savings,
and after-sale services.
Accordingly, PU is an information processing–based evaluation, which is cognitively oriented,
relying on knowledge structures “that are accessible to introspection and therefore form the sub-
stance of conscious thought patterns” (Holbrook & Hirschman, 1982, p. 136). The criteria used in
evaluation are primarily utilitarian in nature where one asks how well a purchase achieves its
intended purpose or function (Holbrook & Hirschman, 1982). Since utilitarian criteria are more
tangible and are evaluated through conscious thought processes, the resultant evaluations are well
constructed and more justifiable.
Unlike PU, satisfaction captures emotions and feelings related to a purchase (Holbrook &
Hirschman, 1982). In consumer research, satisfaction has been defined as an affective state reflect-
ing the emotional reaction to a purchase experience (Spreng, MacKenzie, & Olshavsky, 1996), and
“a post-consumption evaluative judgment with the evaluative aspect of that judgment varying
along the hedonic (pleasantness) continuum” (Mano & Oliver, 1993, p. 454). A review on defini-
tions of consumer satisfaction establishes that it is “a summary affective response of varying inten-
sity” (Giese & Cote, 2000, p. 15). Similarly, in e-commerce research, satisfaction is conceptualized
as an affective state (e.g., Cenfetelli et al., 2008; Kim et al., 2009; Li et al., 2006), feelings (Devaraj
182 International Journal of Market Research 61(2)

et al., 2002), pleasantness (Deng & Poole, 2010), and enjoyment (Jiang & Benbasat, 2007b;
Koufaris, 2002) and is operationalized with emotion-laden adjectives such as “fun” and “interest-
ing” (see Table 1).
Satisfaction is essentially an experiential evaluation, which focuses on cognitive processes that
are more subconscious and private in nature (Holbrook & Hirschman, 1982), involving a variety
of mental events such as subconscious thoughts, unconscious processes, imagery, and even fanta-
sies (Fiore & Kim, 2007). Purchases are evaluated positively by virtue of the enjoyable experience
they provide (Holbrook & Hirschman, 1982). The bases of evaluations are imagery and sensory
elements of a purchase experience rather than instrumental gains. Emotions and feelings are there-
fore of particular relevance to the experiential view (Holbrook & Hirschman, 1982). Experiential
evaluations may also be influenced by elements peripheral to a purchase, such as mood, atmos-
phere, and social influence (Verhoef et al., 2009). Experiential evaluations are more holistic in that
to provide customers with a satisfactory purchase experience, it is necessary for an e-store’s web-
site to orchestrate all the “clues” that people detect in the purchase process (Verhoef et al., 2009).
Based on the conceptual differences between information processing–based and experiential
evaluations, the effect of satisfaction in the initial purchase is likely to be weaker than the effect of
PU because the very lack of experience with an e-store limits customers’ ability to fully discern
various aspects of purchasing from the e-store and make confident experiential evaluations. The
lack of confidence should reduce customers’ reliance on satisfaction to determine their initial
intention to repurchase and preference for an e-store. PU is expected to have a stronger effect on
loyalty intention in the initial purchase because it is evaluated based on tangible aspects of an
e-store that are readily observable, even in initial interactions with the e-store (see Figure 1).

H1. Initial PU has a stronger effect on initial loyalty than initial satisfaction.

Comparing change in PU and satisfaction over multiple purchases

Being an information processing–based evaluation, PU is likely to resist persuasion and persist
over time (Fazio, 2007). This is because information-processing evaluations are based on con-
scious thought processes where cognitive effort is explicitly expended to consider specific aspects
of a website. Petty, Haugtvedt, and Smith (1995) explained that the elaboration of information
increases the strength of an evaluation because thinking about an object triggers the acquisition of
knowledge and increases structural consistency among elements of the evaluation, such that they
form a coherent overall assessment of the object. The more one thinks about an object, the more
accessible the thoughts upon which an evaluation is based will become. This accessibility increases
the likelihood that the evaluation will guide future behavior. One also becomes more certain and
confident of his or her evaluation and this increases the likelihood that one will defend (resistance)
or rely on it over time (persistence). As long as the criteria remain diagnostic and information feed-
ing into evaluations remains unchanged, future evaluations are likely to remain unchanged
(Holbrook & Hirschman, 1982).
Unlike PU, the bases of satisfaction evaluation are more latent and fuzzy and it is more difficult
to reconstruct experiential evaluations. Due to the lack of clear and reliable anchors for evaluation,
experiential evaluations are likely to be less stable than information processing–based evaluations
(Holbrook & Hirschman, 1982) over purchases. Accordingly, we expect the experiential evaluation
of satisfaction to change more than the information processing–based evaluation of PU over pur-
chases. In line with this, e-commerce researchers have suggested that, being related to emotion,
satisfaction may be less lasting and have less stability compared to attitudes such as PU (e.g.,
Table 1.  Review of studies on online shoppers’ loyalty.

Study Antecedents and definitiona Hypotheses and Data collection and

Pee et al.

findings final sample

PU Satisfaction E-store loyalty
Cenfetelli PU: the degree to which a Satisfaction: a customer’s Continued website usage PU → continued Cross-sectional
et al. (2008) customer believes that a affective reaction to the (operationalized in terms of website usage* survey, 1081 retail
website helps to achieve cognitive appraisal of service whether one would consider using Satisfaction → e-commerce website
shopping goals quality performance a website for future purchases, continued website customers in United
desire to buy from the website, usage* States
and likelihood that one will visit PU → satisfaction*
the website again in future)
Deng and Pleasantness (operationalized Approach-avoidance tendency Pleasantness → Experiment, 445
Poole (2010) in terms of whether a (operationalized in terms of approach tendency* undergraduate
webpage makes one feel the tendency of spending time students in a large
happy/unhappy, annoyed/ browsing website, getting back to university in the
pleased, satisfied/unsatisfied, website, etc.) United States
melancholic/ contented,
hopeful/despairing,
uncomfortable/comfortable)
Devaraj et al. PU (operationalized in Satisfaction: an ex post Channel preference Usefulness → Cross-sectional
(2002) terms of whether shopping evaluation of consumers’ (operationalized in terms of plan satisfaction → survey, 134
online gives greater control, experience with a service to use online shopping again, channel preference* undergraduate and
improves the quality of and is captured as a positive whether one would recommend graduate students in a
decision making, is a more feeling, indifference, or a shopping online to others, private university after
effective way to make negative feeling intention to completely switch an online purchase
purchases, and whether one over to online shopping, and and after an offline
finds shopping online useful) intention to increase the use of purchase
Time efficiency: a measure of shopping online in the future)
the transaction time costs
Price savings
Jiang and PU: the extent to which Return intention (operationalized PU → return Experiment, 176
Benbasat a particular website is in terms of the extent to which intention* students in a
(2007a) expected to help online one would use a website to shop university in the
consumers accomplish their next time and in future) United States
shopping goals
183

(Continued)
Table 1. (Continued)
184

Study Antecedents and definitiona Hypotheses and Data collection and

findings final sample
PU Satisfaction E-store loyalty
Jiang and Shopping enjoyment Intention to return Shopping enjoyment Experiment, 176
Benbasat (operationalized in terms (operationalized in terms of the → attitude → students in a
(2007b) of whether the experience extent to which one would use a intention to return* university in the
with a website is interesting, website to shop next time and in United States
enjoyable, exciting, and fun) future)
Kim and Son PU: perceptions about Satisfaction: favorable feelings Loyalty: user’s deeply held PU → loyalty* Cross-sectional
(2009) enhanced effectiveness toward a service affective commitment toward a Satisfaction → survey, 510 users
achieved through the use of service loyalty* of web portals (e.g.,
a service MSN, Yahoo!)
Kim et al. Perceived performance Satisfaction: an affective state Loyalty: a positive attitude Perceived Longitudinal survey,
(2009) (operationalized in terms of representing a consumer’s reflecting three concepts: performance → students in a public
whether a website improves emotional reaction to retention (i.e., repeated confirmation → university in the
performance in shopping, the entire e-commerce patronage) to the e-tailer website, satisfaction → United States before
increases productivity transaction through the intention to repurchase from the loyalty* (468 respondents)
in shopping, enhances selling entity on the Internet e-tailer website, and willingness to and after (258
effectiveness in shopping, and recommend the website to friends respondents) a
is useful in shopping) purchase
Koufaris PU (operationalized in terms Shopping enjoyment Intention to return PU → intention to Experiment, 280
(2002) of shopping performance, (operationalized in terms of (operationalized in terms of return* subjects recruited
productivity, and the extent to which a visit the likelihood of visiting an Shopping enjoyment from the database of a
effectiveness) to an e-commerce website e-commerce website again in → intention to market research firm
is interesting, enjoyable, future) return*
exciting, and fun)
Li, Browne, Satisfaction: positive Stickiness intention Satisfaction → Cross-sectional
and affect one experiences in (operationalized in terms of one’s commitment → survey, 239 students
Wetherbe the relationship with an plan, intention, and expectation stickiness intention* in a public university
(2006) e-commerce website to keep using an e-commerce
website in future)

PU: perceived website usefulness.

aOperationalization is provided when construct definition is not formally stated in a paper.

*Hypothesis was found to be significant at p < .05.

International Journal of Market Research 61(2)
Pee et al. 185

Figure 1.  Conceptual relationships between purchase evaluations and e-store loyalty.

Cenfetelli et al., 2008). However, there is yet any study comparing the change in PU with change
in satisfaction.

H2: Change in PU over purchases is less than change in satisfaction.

Comparing effects of change in PU and change in satisfaction

The conceptual differences between information processing–based and experiential-based evalua-
tions suggest that change in satisfaction has a stronger effect on loyalty than change in PU. As dis-
cussed earlier, PU is more firmly established in the initial purchase and changes less in subsequent
purchases since its evaluation relies on more observable, tangible, and accessible aspects of an
e-store’s website. In subsequent purchases, customers are likely to divert attention to better ascertain
their experiential satisfaction and reduce cognitive dissonance. Holbrook and Hirschman (1982)
highlighted that learning is an important aspect of the experiential perspective. The effect of satisfac-
tion is expected to strengthen as more purchases are made and customers learn about an e-store and
update their experiential evaluations. As the accuracy of experiential evaluations increases and cus-
tomers gain confidence in their evaluations, they are likely to rely more on satisfaction in determining
whether to repurchase and commit to an e-store (i.e., form loyalty). In support, Brunner, Stocklin, and
Opwis (2008) found that the positive effect of satisfaction on loyalty is more pronounced for experi-
enced customers in offline shopping. Our study extends the understanding of satisfaction over pur-
chases by comparing it with the information processing–based evaluation of PU:

H3. Within-individual change in satisfaction has a stronger effect on change in loyalty than
change in PU.

Research method
Data collection
Data for testing the hypotheses were collected through a four-wave panel survey. We needed data
on initial purchases from an e-store, as well as data on subsequent purchases to understand changes
186 International Journal of Market Research 61(2)

in PU and satisfaction. Since a complete list of shoppers who had made their first purchase from
an unfamiliar e-store was not available, we recruited participants (i.e., access potential online shop-
pers) by posting invitations on discussion forums of major e-commerce websites in Taiwan, such
as PCHome, Yahoo! Shopping, PayEasy, and MomoShop. Together, these online marketplaces
accounted for about 30% share of the fragmented online retail market in Taiwan (Euromonitor
International, 2017). The invitation asked those who had recently made a first purchase from an
unfamiliar e-store to participate in the study and to respond to questions about their PU, satisfac-
tion, and loyalty based on the first purchase. They were then asked to return to the survey if they
made more purchases from the same e-store. Weekly reminders were sent to ask those who made
more purchases since the last survey to answer questions about subsequent purchases. Each partici-
pant was identified by their email address. As an incentive, all participants were eligible for a lucky
draw with smart phones and tablet computers as prizes.
A total of 711 individuals responded to the survey about first purchase (T1). Among them, 302
completed the survey about second purchase (T2) and 244 completed the survey about the third
(T3) purchase. The final sample size is 213. To assess whether sample attritions was due to non-
random effects that could potentially result in biased estimates, we compared the means of key
constructs in the attrition sample with those in the remaining sample (Lohse, Bellman, & Johnson,
2000). The result indicated that the attrition is unlikely to lead to biased estimates (Winer, 1983).

Survey instrument
Scales validated in prior studies of online shopping or consumer behavior were adapted for use in
this study as much as possible (see Table 2). For example, we used Khalifa and Liu’s (2007) PU
scale, which measures the quality of after-sale services, efficiency of transaction processing, secu-
rity of website, convenience of shopping, and cost savings along Likert scales anchored between
“strongly disagree” and “strongly agree” (see Table 2).

Data analysis
The panel data were analyzed with second-order latent growth modeling (LGM; Chan, 1998), an
approach that allowed us to measure changes in latent variables and assess the effect of multiple
latent variables in a single structural model.

Demographic analysis
Most of the respondents in our sample aged between 20 and 35 years (93.4%; see Table 3) and had
more than 4 years of experience using the Internet (96.7%). About 62% were men and 71.8%
shopped online for several times a month.

Assessment of survey instrument

Prior to testing the hypotheses, we assessed the reliability and validity of the survey instrument.
Reliability was assessed with Cronbach’s alpha and all scales had satisfactory scores well above
the recommended value of 0.70 (see Table 4). Convergent and discriminant validity were assessed
using average variance extracted and exploratory factor analysis with direct oblimin rotation. All
square roots of average variance extracted were higher than the corresponding correlations among
constructs. We also observed that all items loading were close to or greater than 0.70 and cross
loadings were less than 0.35 for all constructs in all purchases. These indicated adequate conver-
gent and discriminant validity.
Pee et al. 187

Table 2.  Survey instrument.

Construct and definition Instrument item Source

Perceived usefulness PU1: I got good after-sale services from this All items adapted from
(PU): the salient beliefs e-commerce website Khalifa and Liu (2007)
of customers regarding PU2: transaction processing in this e-commerce
the instrumentality of a website was efficient (e.g., fast retrieval of information,
purchase (Khalifa & Liu, ordering, payment processing, and scheduling delivery)
2007) PU3: the security of this e-commerce website was
good
PU4: it was convenient to shop on this e-commerce
website
PU5: I saved costs by purchasing from this
e-commerce website
Satisfaction (ST): An How do you feel about your experience with this All items adapted from
affective state reflecting purchase experience? Spreng et al. (1996)
the emotional reaction ST1: very dissatisfied–very satisfied
to a purchase experience ST2: very displeased–very pleased
(Spreng et al., 1996) ST3: very frustrated–very contented
ST4: absolutely terrible–absolutely delightful (measured
with seven-point semantic differential scales)
E-store loyalty intention EL1: it is likely that I will repurchase from this EL1–EL2 adapted from
(EL): Users’ intention e-commerce website in the near future Khalifa and Liu (2007);
and commitment to EL2: I expect to repurchase from this e-commerce EL3–EL4 developed
repurchase from an website in the near future based on Oliver (1999)
e-commerce website EL3: if another e-commerce website offers services as
good as this website, I would still prefer this website
EL4: it makes sense to buy at this Internet store
compared to others, even if they are the same

All items were measured with seven-point Likert scale except for those measuring satisfaction.

Table 3.  Demographic analysis.

Characteristic Frequency Percentage Cumulative percentage

Age Less than 20 years old 6 2.8 2.8
20–35 years old 199 93.4 96.2
36–50 years old 3 1.4 97.7
More than 50 years old 5 2.4 100.0
Education High school 2 0.9 0.9
Bachelor’s degree 148 69.5 70.4
Postgraduate degree 63 29.6 100.0
Experience using 1–2 years 2 0.9 0.9
the Internet 3–4 years 5 2.4 3.3
More than 4 years 206 96.7 100.0
Gender Female 80 37.6 37.6
Male 133 62.4 100.0
Online shopping About once a day 5 2.4 2.4
frequency A few times a week 15 7.0 9.4
A few times a month 133 62.4 71.8
Less than once a month 60 28.2 100.0
 188

Table 4.  Reliability and correlation among constructs.

Construct Mean SD CA PU (T1) PU (T2) PU (T3) PU (T4) ST (T1) ST (T2) ST (T3) ST (T4) EL (T1) EL (T2) EL (T3) EL (T4)
PU (T1) 5.40 0.98 .89 .84  
PU (T2) 5.36 0.98 .92 .59 .87  
PU (T3) 5.39 0.94 .92 .57 .67 .87  
PU (T4) 5.48 0.95 .92 .56 .63 .64 .87  
ST (T1) 4.34 0.78 .97 .56 .50 .46 .50 .96  
ST (T2) 4.37 0.77 .96 .52 .66 .56 .59 .61 .95  
ST (T3) 4.44 0.78 .97 .50 .58 .62 .57 .54 .65 .95  
ST (T4) 4.51 0.78 .96 .55 .57 .57 .69 .58 .62 .63 .95  
EL (T1) 4.12 0.88 .92 .46 .43 .44 .37 .48 .42 .45 .39 .90  
EL (T2) 4.21 0.89 .96 .50 .62 .53 .51 .49 .60 .55 .49 .55 .94  
EL (T3) 4.27 0.92 .96 .50 .55 .62 .53 .49 .53 .66 .53 .54 .63 .94  
EL (T4) 4.46 0.94 .97 .59 .57 .59 .64 .50 .53 .58 .65 .48 .59 .65 .96

Italic values in the diagonal are square root of average variance extracted.
CA: Cronbach’s alpha; PU: perceived usefulness; ST: satisfaction; EL: e-store loyalty.
T1–T4: purchases.
*p < .05; **p < .01.
International Journal of Market Research 61(2)
Pee et al. 189

Table 5.  Test of measurement invariance.

Model Construct χ2 df ΔΔχ2 Δdf NNFI CFI RMSEA

M1: free factor loadings, error PU 194.19 137 0.954 0.986 0.044
variances, factor means, factor ST 176.69 77 0.965 0.980 0.078
variances EL 158.39 77 0.965 0.982 0.071
M2: equal factor loadings, free PU 209.39 149 15.20 12.000 0.950 0.985 0.044
error variances, factor means, ST 182.22 86 5.53 9.000 0.964 0.980 0.073
factor variances EL 173.75 86 15.36 9.000 0.962 0.980 0.069

All Δχ2 were not significant.

CFI: comparative fit index; df: degree of freedom; EL: e-store loyalty; NNFI: non-normed fit index; PU: perceived useful-
ness; RMSEA: root mean square error of approximation; ST: satisfaction.

Second-order LGM
We followed the three-step approach recommended by Chan (1998) to conduct LGM. The first step
involved assessing measurement invariance to establish that the same latent constructs were meas-
ured in different purchases and with same precision. This ensured that difference between pur-
chases could be interpreted unambiguously as a change within an individual. The second step
identified the nature and magnitude of change in constructs. We assessed a no-growth model, a
linear growth model, and a free-form model for each construct to determine the trajectories of
change in PU, satisfaction, and e-store loyalty. Hypothesis H2 (i.e., relative change in PU and sat-
isfaction) was tested in this step. In the third step, we assessed a multivariate model to examine the
longitudinal effects of change in PU and satisfaction (i.e., test H1 and H3).
To assess measurement invariance, we compared two models, M1 and M2, following Chan
(1998). Model M1 freely estimated factor loadings, error variances, factor means, and factor vari-
ances and the adequate model fit indicated that the factor structure of all constructs were similar
over time and there was configural invariance (see Table 5). Model M2 was nested in M1 in that
factor loadings were constrained to be equal across purchases. We found that there was no note-
worthy deterioration in model fit as indicated by the insignificant change in chi-square, supporting
metric invariance. Overall, there was sufficient measurement invariance in our data and the more
parsimonious and constrained model M2 was used in following analyses.

Test of hypotheses about change

In LGM, a trajectory of change is described by intercept and slope. Intercept represents the level
of a variable at the initial time it is measured (i.e., first purchase in our study). Slope indicates the
rate at which a variable changes over time (i.e., from first through fourth purchase in our study).
Following Serva, Kher, and Laurenceau (2011), we tested three models of change. The no-change
model, which is nested within the linear model, which in turn is nested within the free-form model,
were compared by assessing change in chi-square. The results indicated that PU, satisfaction, and
e-store loyalty were adequately represented by the linear model of change, with the no-change and
free-form models having worse or insignificant improvement in model fit.
We analyzed the nature of change in constructs. There were significant within-individual
changes in satisfaction and loyalty over the four purchases, as indicated by the significant slope
mean. As hypothesized in H2, the change in PU over purchases (slope mean = 0.09, p > .05) is less
than the change in satisfaction (slope mean = 0.14, p < .01). There were also significant between-
individual differences in the level of PU, satisfaction, and loyalty in the first purchase and the tra-
jectory of change in loyalty.
190 International Journal of Market Research 61(2)

Figure 2.  Results of latent growth modeling.

*p < .05; ***p < .001.

Test of hypotheses about effects of change

To test hypotheses H1 and H3, a multivariate LGM was assessed. We controlled for the effect of
individuals’ age, gender, education, experience with the Internet, and habit of online shopping.
Habit was measured with the scale validated by Khalifa and Liu (2007), while the other control
variables were measured as shown in Table 3. These control variables explained some of the
between-individual differences in the initial level of and change (i.e., intercept and slope) in PU
and satisfaction. We found that highly educated individuals had higher initial PU (β = .11, p < .05);
older customers had higher initial satisfaction (β = .11, p < .05) but less change in satisfaction over
purchases (β = −.14, p < .01); habitual online shoppers had higher initial PU (β = .32, p < .001) and
initial satisfaction (β = .33, p < .001); individuals with more Internet experience had less change in
PU (β = −.17, p < .001) and satisfaction (β = −0.11, p < .05). None of the control variables had sig-
nificant effect on initial loyalty and change in loyalty over purchases.
The effects of initial and change in PU and satisfaction are shown in Figure 2. In the first pur-
chase, high PU and satisfaction leads to high initial repurchase intention and preference for a
website (i.e., initial loyalty). As hypothesized in H1, initial PU (β = .71, p < .001) had a much
stronger effect on initial loyalty compared with initial satisfaction (β = .23, p < .05; d = 0.48, p < .05).
We also found that within-individual increase in PU and satisfaction over purchases both lead to
increasing loyalty. Compared to the change in PU, change in satisfaction has a much stronger effect
(β = .90, p < .001 vs β = .52, p < .001; d = 0.38, p < .05), providing support for hypothesis H3.

Discussion
This study proposed that PU and satisfaction change differently over multiple purchases, and that
the changes affect e-store loyalty differently. Understanding changes in PU and satisfaction is
important because loyalty develops incrementally, rather than based on a single purchase. Findings
from a four-wave panel survey indicate that PU, an information processing–based evaluation, has
Pee et al. 191

a stronger effect on loyalty than satisfaction in the initial (i.e., first) purchase. In subsequent pur-
chases, PU changes less than satisfaction (an experiential evaluation), and change in satisfaction
affects loyalty more strongly than change in PU. In the data analysis, we also observed that indi-
viduals differ significantly in their initial levels of and change in PU and satisfaction depending on
their age, education, experience with the Internet, and habit of online shopping. The implications
of these findings for research and practice are discussed next.

Implications for research

This study contributes to research in several ways and indicates directions for further research.
First, the findings enrich our understanding of online shoppers’ loyalty by clarifying how its devel-
opment is affected by changes in PU and satisfaction over multiple purchases. Examining multiple
purchases and changes over time has provided new insights—change in satisfaction matters more
than change in PU in the development of loyalty, even though PU has a stronger effect in the initial
purchase. This has been masked in cross-sectional studies. Understanding the changes and their
effects extends our conceptual understanding of e-store loyalty, PU, and satisfaction with a more
dynamic perspective. To the best of our knowledge, this is one of the earliest studies to theoreti-
cally and empirically compare changes in PU and satisfaction related to loyalty.
Second, the finding that satisfaction changes more over purchases than PU could also help to
explain some inconsistencies observed in e-commerce research on loyalty, where PU was some-
times observed to have a stronger effect than satisfaction in some studies (e.g., Wen, Prybutok, &
Xu, 2011) but weaker in other studies (e.g., Cenfetelli et al., 2008). Future research should account
for the differential changes in PU and satisfaction directly by collecting longitudinal data or speci-
fying whether the focus is on the initial purchase or subsequent purchases. At a broader level, our
finding contests the implicit assumption adopted in cross-sectional studies, that antecedents of
loyalty are static.
Third, our findings indicate the need for further research to move from traditional static models of
online shoppers’ loyalty to temporal models focusing on understanding its development over multiple
purchases. In our data analysis, we observed that loyalty changes significantly over purchases. This
supports the conceptual belief that loyalty develops gradually over purchases and highlights the need
to deepen our understanding by examining how its longitudinal development is affected by changes
in its antecedents. There is opportunity to investigate longitudinal effects of other antecedents of
loyalty, such as trust (Chiu, Chang, Cheng, & Fang, 2009). In this study, we demonstrate one of the
few four-wave study design and analysis to understand the temporal development of loyalty based on
changes in its antecedents and pave the way for further studies of this type.
Fourth, this study also contributes to the referent theoretical perspectives of information
processing–based and experiential customer evaluations. These two perspectives highlight
the conceptual differences between two types of customer evaluations in terms of conscious-
ness, confidence of evaluation, and memory, and suggest that different evaluations are held
and processed differently by customers as they gain experience with a store over purchases.
Our study adds to these perspectives by specifying two different, yet related aspects of change
for empirical testing: (1) differential changes in evaluation and (2) differential effects of the
changes.

Limitations and suggestions for future research

The findings of this study should be interpreted in light of its limitations, which could be addressed
in further research. First, there was considerable attrition in our sample. Although attrition
192 International Journal of Market Research 61(2)

analysis indicated that the attrition is unlikely to bias estimates, a larger sample would enhance
the generalizability of findings. Second, the hypothesis comparing change in PU and change in
satisfaction was tested with data over four purchases. While this is significantly more than that in
previous studies, extending data collection over more purchases could further ascertain the extent
of changes and rule out the possibility that PU changes significantly, albeit very slowly, over a
larger number of purchases than that measured in this study. Third, this study focuses on per-
ceived usefulness and satisfaction as two important antecedents of loyalty that have been shown
to jointly account for more than half of the variance in loyalty. As an early longitudinal study on
loyalty, we chose to limit the number of variables to keep the length of the panel survey manage-
able for participants. Further research could study and compare other antecedents, such as trust
(Chiu et al., 2009) and social presence (Cyr, Hassanein, Head, & Ivanov, 2007; Yang & Peterson,
2004), to enrich our understanding and management of the longitudinal development of online
shoppers’ loyalty.
Other than improving upon the limitations of this study, an interesting avenue for future research
is to compare and theorize changes in different types of customers. We observed in our analysis of
control variables that older customers and those with more Internet experience change less in sat-
isfaction over purchases (i.e., there are between-individual differences in within-individual
change). This suggests an opportunity to enrich the conceptual development of online shoppers’
loyalty further by accounting for customer characteristics. The findings are likely to be valuable to
practice for developing targeted strategies for attracting and retaining different groups of custom-
ers. For instance, our observation suggests that focusing on ensuring the satisfaction of older cus-
tomers in the initial or early purchases is likely to generate greater return than targeting other
groups, as their satisfaction changes less over purchases and their loyalty intention is therefore
likely to remain strong in future purchases. Conceptually, this could be explained in terms of older
adults’ resistance to change (e.g., routine seeking, cognitive rigidity) or inertia in learning new
technology features that compare the offerings of different e-stores.

Practical implications
The results suggest an empirically supported, longitudinal approach to initiate and nurture
e-store loyalty in practice. E-stores should focus on ensuring that the usefulness of their website
is clear to new customers, since loyalty intention in the initial purchase is more strongly affected
by PU. It is especially important to provide efficient transaction processing (e.g., fast retrieval
of information, ordering, payment processing, and scheduling delivery), website security, and
convenience, as indicated by our analysis of item loading significance. Along with a reasonable
level of satisfaction with the initial purchase, these should lead to a strong repurchase intention.
For returning customers, the focus should be on increasing their satisfaction (while maintaining
PU), based on our findings that the development of (i.e., change in) loyalty is more strongly
affected by change in satisfaction. It would be useful to measure customers’ satisfaction after
each purchase so that any decline in satisfaction can be identified and remedied timely.
Understanding the differential changes and their differential effects on the development of loy-
alty helps e-stores channel their resources and attention to the most salient aspect of customer
evaluation at the right time.
We also observed, in the analysis of control variables, that highly educated individuals and
habitual online shoppers tend to have higher initial PU and therefore stronger repurchase inten-
tion. This suggests that e-stores could target them as much as appropriate. For example, e-stores
could advertise in websites or online communities that highly educated and habitual shoppers are
known to visit.
Pee et al. 193

Conclusion
For e-stores’ survival, fostering loyalty is as important as attracting new customers. The develop-
ment of loyalty is essentially a within-individual phenomenon that occurs over multiple purchases.
We have explained and shown how two key antecedents of loyalty change differently over pur-
chases and how they affect the development of loyalty differently. These longitudinal differences
and effects are indispensable pieces of the loyalty puzzle and teasing them out provides us with
opportunities to advance the theoretical development and practical management of online shop-
pers’ loyalty.

Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.

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