The impact of consumers’ perceptions regarding the ethics of online retailers and promotional strategy on their repurchase intention

Cause-related marketing (CRM) has become increasingly popular and widely adopted by large companies. However, not much attention has been paid to the effect of CRM on small or unknown online retailers. As ethical concerns about the Internet continue to rise, consumers' perceptions regarding the ethics of online retailers (CPEOR) become important when making a purchase decision. This research uses the self-signaling theory to examine how online retailers’ information management and promotional strategy (CRM vs. Price Discount) may emit signals and impact on the consumers’ repurchase intention. It was assumed that a high CPEOR would work better with a CRM-based strategy, which is fundamentally aligning in ethics. However, the experimental results surprisingly revealed that when CPEOR was high, the consumers’ repurchase intention increased in the case of a Price Discount-based promotion when compared to a CRM-based promotion; the effect was the opposite when consumers’ CPEOR was low. ANCOVA was used to analyze the data while setting certain variables as covariates. This research is a meaningful contribution to the literature and serves as an important reference for e-commerce practitioners to understand how they can wisely manage the information on the online storefront to signal their consumers and create an incremental value for the business.