A Study on the Customer-Based Brand Equity of Online Retailers

Different from traditional firms, online retailers do not often produce common goods on their own. On the contrary, they sell merchandises that traditional firms produce. Furthermore, online retailers are also different from traditional retailers because the former do not often have frontline employees, physical outlets, or displaying layouts. Therefore, when building a strong online retailer brand, it is not enough to only consider the traditional dimensions of customer-based brand equity, namely brand awareness, perceived quality, brand associations, and brand loyalty. Some dimensions, i.e. trust associations and emotional connection need to be distinguished or included in the context of online business. Besides, the willingness to pay a price premium is always being viewed as a good indicator to measure brand equity, but for online retailers, it is conditional on some premises. By structural equation modeling, it was verified that for online retailers, the importance of brand awareness and trust associations decreased but perceived quality remained its strong influence. Brand loyalty was the better indicator for measuring brand equity, and emotional connection became so critical that if without it, customers would lack willingness to pay a price premium.