Restoring consumer trust in e-commerce: The role of blockchain technology and its behavioral implications

Blockchain technology has unique technological features that could help e-commerce firms regain consumer trust lost due to widespread online fraud. However, their effectiveness and underlying mechanisms remain unknown. Drawing on trust formation theory, this article examines the effectiveness of these blockchain technology features and its variation across consumer needs. A multi-method approach combines a randomized between-subjects experiment (Study 1: 727 consumers; pretest: 45) and a multi-wave survey of actual experiences of tech-savvy consumers (Study 2: 563 consumers; pretest: 30) in the U.S. Consistent statistically significant results show that the blockchain technology features of privacy ownership, privacy monetization, and metadata transparency increase consumer trust in e-commerce platforms. The openness of a blockchain platform to criminal sellers, which allows consumers to access illicit products, increases trust only for consumers with illicit purchase needs, while decreasing trust for consumers without such needs. Trust mediates the effects of these blockchain technology features on consumers' willingness to pay additional fees and retail use intentions, which in turn mediate the effects on actual future retail use behavior. These findings extend trust formation theory to the context of blockchain technology and inform retail practitioners of a powerful new technology for increasing consumer purchases in their online stores. • This research explores the mechanisms of trust formation in blockchain e-commerce. • Privacy ownership, monetization, and metadata transparency increase consumer trust. • Illicit access increases trust among consumers with illicit purchase needs. • Illicit access decreases trust among consumers without illicit purchase needs. • Use intentions mediate the effect of trust on actual use behavior.