A customer loyalty formation model in electronic commerce Nader Sohrabi Safa ⁎, Maizatul Akmar Ismail Department of Information Science, Faculty of Computer Science & Information Technology University of Malaya, 50603 Kuala Lumpur, Malaysia abstract article info Article history: Accepted 7 August 2013 Available online xxxx Keywords: E-commerce E-satisfaction E-trust E-loyalty framework Traditional commerce has been converted to modern or Electronic Commerce (E-commerce) by new technolo- gies. The advantages of this transformation are less process time, cost, errors and mistakes for sellers and buyers. Companies lose their Electronic Customers (E-customers) due to the competitive business environment on the Internet. In this respect, Electronic Trust (E-trust), Electronic Satisfaction (E-satisfaction) and Electronic Loyalty (E-loyalty) play vital roles. In addition, acquiring new loyal customers requires time and money. In this research, a conceptual framework has been presented that shows E-loyalty formation based on E-trust and E-satisfaction. The model, which was formed based on the literature review, has been improved by factor analysis and the effect of every construct has been determined by regression analysis. The direct and indirect effects of organizational, technological and customer factors on E-loyalty were calculated by path analysis. The results show that technological factors have the most effect on E-satisfaction and the organizational factors have the most effect on E-trust. © 2013 Elsevier B.V. All rights reserved. 1. Introduction The frequent purchasing over a period of time with satisfaction toward a subject is defined as loyalty (Keller, 1993). Loyalty contains attitudinal and behavioral aspects. Jacoby and Chestnut (1978) concep- tualized loyalty and discussed the behavioral aspects with a focus on repurchase. The result of the decision making process for buying relates to the behavioral aspect of loyalty while the emotional aspect is dis- regarded in this domain of research. Experts should pay attention to real loyalty, which is based on commitment, and fake loyalty, which is derived from inertia (Dick and Basu, 1994). Loyal customers have com- mitment and attachment toward the seller, and are hardly attracted by the other alternatives or more attractive options. Willing to pay more, higher buying intent, and resistance to switch are the important loyal customer characteristics (Shankar, Smith and Rangaswamy, 2003). In this research, loyalty is defined as customer commitment and favorable attitude toward an online retailer, which leads to repurchase behavior. Satisfaction is defined as the pleasurable fulfillment accumulated over multiple transaction experiences, which comes from overall evalua- tion of the online retailer, while trust is defined as the confidence or belief that the merchant will not take advantage of the customer's vulnerability. 2. Related works In the previous studies, E-satisfaction has frequently been men- tioned as the main factor in the formation of E-loyalty (Anderson and Mittal, 2000; Eriksson and Vaghult, 2000). Despite the relation between satisfaction and loyalty, some experts have mentioned that in some cases, more than 50% of satisfied customers switch to another alterna- tive (Jones and Sasser, 1995). To fill this gap, some scholars considered the importance of the role of E-trust in the formation of loyalty (Singh and Sirdeshmukh, 2000). The relationship between E-trust, E-satisfaction and E-loyalty is an important issue in online purchasing and E-commerce (Park and Kim, 2003). Long-time customer commitment, in other words, loyalty, brings long-term profit to the online sellers (Reichheld, Markey, and Hopton, 2000b). Some researchers believe that a close relationship between the buyer and seller shows a customer's E-satisfaction and satisfied customers are more loyal (Anderson and Srinivasan, 2003). Rechheld and Schefter focused on the role of E-trust to create E-loyalty. They mentioned that when a customer trusts the online retailer and discloses personal details it enables online companies to personalize their services and websites based on such information. In this situation, sellers are more familiar with the customer's needs and demands and can provide proper services and products accordingly (Reichheld et al., 2000b). Rexha, Kingshott, and Aw (2003) examined the sequence in the relation between E- trust, E-satisfaction and E-loyalty. Gummerus, Liljander, Pura, and Riel (2004) presented a model of E-loyalty, which showed the effect of E-trust on E-satisfaction and then E-loyalty. Table 1 shows the factors that the other researchers have mentioned in their studies. In the different researches, different aspects of loyalty were con- sidered. Lee et al. (2009) studied E-satisfaction based on the quality of system, service and information. Chang and Chen (2008) discussed customer interface quality based on system customization, interactivity and convenience. These factors have been considered in the techno- logical group factors. Belief in benevolence, integrity, competence, Economic Modelling 35 (2013) 559–564 ⁎ Corresponding author. E-mail address: sohrabisafa@yahoo.com (N.S. Safa). 0264-9993/$ – see front matter © 2013 Elsevier B.V. All rights reserved. http://dx.doi.org/10.1016/j.econmod.2013.08.011 Contents lists available at ScienceDirect Economic Modelling journal homepage: www.elsevier.com/locate/ecmod