Consumer trust toward retail websites: Comparison between pure click and click-and-brick retailers

This paper examines the effects of security/privacy and social presence of retailers on consumer's e-trust in two different contexts: pure click and click and brick retailers. It explores how e-trust affects consumer attitudes toward websites and WOM. A conceptual model is tested using Structural Equation Modeling, on a random sample of 989 French customers. Results suggest that perceived website social presence and perceived security/privacy exert strong and positive impacts on website credibility and benevolence, which in turn directly influence website attitudes and indirectly influence word-of-mouth. One major difference between pure click and click-and-brick retailers is that the role of social presence in developing online benevolence is more important in the case of pure click retailers. The study concludes with managerial implications that may be useful in retail marketing.     

Online service quality: Content and process of analysis

Abstract

The purpose of this paper is to build a comprehensive model of online service quality that confirms both the content of, and process of measuring, this higher-order construct. While the past decade has seen the Internet become a key channel for service delivery, there remains uncertainty around many aspects of both the content of, and process of how to measure, online service quality. We use a large sample of European consumers (n = 3399) of four companies (two pure play and two multichannel) to develop a new nine-dimension model of online service quality. We validate importance as a disconfirmation standard. We find trust in the company to be the most important dimension of online service quality, with customer service also highly rated. Issues of personalisation/customisation were very low rated. We find the online pure-play companies in the sample delivering better performance than multichannel retailers, despite having customers who are actually more demanding. We discuss the practical and research implications of these findings.     

The role of the brand in driving online loyalty for multichannel retailers

Multichannel retailers offer shoppers the possibility to cross channels to complete their shopping process. Multichannel retailers, unlike pure online sellers, offer shoppers multiple contact points to experience the brand. Also, multichannel retailers can leverage the trust and attachment to their brands that has been built with their offline presence to drive customers to buy online. Our paper explores the role of the customer relationship with the brand, with variables such as brand trust, brand attachment and length of brand relationship, as drivers of loyal behaviours towards the online channel. We compare the impact of these variables with those of the technology acceptance model. Multiple linear regression analysis is applied to data collected through a survey answered by 1533 multichannel retail shoppers in two product categories (apparel and consumer electronics) in two countries (UK and Spain). Our findings show that both brand trust and brand attachment have a positive impact on loyal behaviours towards the online channel, and that different loyalty behaviours, i.e. purchase intentions, word of mouth and electronic word of mouth are explained by different variables.     

Online channel adoption in supermarket retailing

Introducing a new online channel is a crucial decision for brick-and-mortar retailers that requires insight and forecasts into customers' adoption and subsequent behaviour. The aim of this study is to analyse the dynamics in the behavioural heterogeneity of (new) multichannel supermarket customers when the online channel is introduced. A Latent Class Analysis (LCA) was conducted on 1151 adopters of the new online channel of a supermarket retailer to segment customers. We employed an extended “Recency, Frequency and Monetary (RFM)” model that includes customers’ purchases prior to the introduction of the new channel. Results show that adopters of a new channel are not a homogenous group of customers displaying a similar behaviour: two segments – or 35% of the sample – quit the channel after using it for some time, another segment (5%) left the company altogether, the other four segments remained multichannel to different degrees, with one shifting shopping substantially to online. Based on these results, the paper provides directions to retailers for developing Customer Relationship Management (CRM) strategies to manage the different customer segments and support channel performance evaluation and channel management decisions in a multichannel context.     

Determinants of website traffic: the case of European fashion apparel retailers

The globalization process together with the extraordinary growth in the use of Internet offer firms new growth opportunities. Retail firms are using a multichannel approach, involving the Internet, in their internationalization strategies. Website traffic as measured by unique users and online awareness is among the measures for assessing the success of the online channel. There is little evidence, however, linking website traffic and the characteristics of the retail multichannel internationalization process. In order to fill this gap, this paper analyses the factors explaining the retailer's international website traffic. Website traffic data for a sample of European fashion apparel retailers are modelled as dependent on characteristics of the organization and of its physical and virtual internationalization strategy. Following the results of several linear regression models, we infer the complementarity of online and offline channels in the international operation, as well as the contribution of social networks as traffic generators.     

Does Online Information Drive Offline Revenues?: Only for Specific Products and Consumer Segments!

While many offline retailers have developed informational websites that offer information on products and prices, the key question for such informational websites is whether they can increase revenues via web-to-store shopping. The current paper draws on the information search literature to specify and test hypotheses regarding the offline revenue impact of adding an informational website. Explicitly considering marketing efforts, a latent class model distinguishes consumer segments with different short-term revenue effects, while a Vector Autoregressive model on these segments reveals different long-term marketing response.We find that the offline revenue impact of the informational website critically depends on the product category and customer segment. The lower online search costs are especially beneficial for sensory products and for customers distant from the store. Moreover, offline revenues increase most for customers with high web visit frequency. We find that customers in some segments buy more and more expensive products, suggesting that online search and offline purchases are complements. In contrast, customers in a particular segment reduce their shopping trips, suggesting their online activities partially substitute for experiential shopping in the physical store. Hence, offline retailers should use specific online activities to target specific product categories and customer segments.     

Crosswise and reciprocal interdependencies within retailers’ multichannel structures

Understanding consumer behavior across channels is the fundamental basis for implementing successful multichannel retailing strategies. This study analyzes the crosswise and reciprocal relationships between offline and online brand beliefs, offline and online retail brand equity and consumers’ conative loyalty to a retailer in multichannel structures. The relationships are contextualized by investigating fashion and grocery retail sectors and different prior channel performances that are likely to affect the paths to loyalty across channels. To provide insight into these issues, two cross-sectional and two longitudinal models are employed. The results show that former brick-and-mortar retailers are able to significantly increase consumers’ loyalty to the firm by primarily designing offline (secondary online) attributes and beliefs. The results hold for retailers in both fashion and grocery retailing, however, with stronger effects in fashion, as well as for retailers with strong vs. weak prior channel performance. However, indirect effects indicate that online brand beliefs and offline retail brand equity are the central strategic levers for prior strong (vs. weak) retailers. Reciprocal relationships between online and offline retail brands underline important channel interdependencies. Managers thus need to take these crosswise and reciprocal interdependencies between channels into account when designing successful multichannel retailing systems. This study introduces the novel idea of simultaneous crosswise and reciprocal relationships within multichannel retail structures and shows that paths to loyalty vary for retailers in different retail sectors and retailers with strong vs. weak offline and online channel performances.     

The informational value of multi-attribute online consumer reviews: A text mining approach

In the digital age, customers use online reviews to minimize the risks associated with purchasing a product. Major online retailers help customers choose the right product by exposing reviews that received many “helpful” votes at the top of the review section. Given that reviews that have received the maximum helpfulness votes are considered more important in purchase decisions, understanding determinants of helpfulness votes offers clear benefits to online retailers and review platforms. This study focuses on the effect of review informativeness, which is measured by the number of attributes discussed in a review, and its interplay of review valence on customers' perception of review helpfulness. We applied a word-level bigram analysis to derive product attributes from review text and examined the influence of the number of attributes on the review's helpfulness votes. More importantly, we also suggested the moderating role of review valence. Estimation results of the Zero-inflated Poisson models on 21,125 reviews across 14 wireless earbuds indicated that as more attributes are discussed in a review, the more the review can earn helpfulness votes from customers. Furthermore, the positive association between the number of attributes and helpfulness was enhanced among negative reviews. This study contributes to customers' information processing literature and offers guidelines to online retailers in designing a better decision support system.     

Definition and psychometric validation of a measurement index common to website and store images

To mesh together their channels and better handle their multichannel management, retailers must better evaluate and coordinate their various channels. They need more precise and more complete measurement instruments to compare the channels in terms of characteristics perceived by their customers. Using the procedure specific to formative variables, this research results in a particularly comprehensive measurement index that culls 10 channel image dimensions (offering, price, layout, accessibility, promotions, customer service, advice, reputation, institution, connections with other channels) from the 40 strictly identical items for the website and the stores. Various qualitative and quantitative surveys examine across several samples of customers of a major French multichannel retailer, including one sample of 1,478 respondents. This study delineates the scope of website and store images and defines reliable scales for evaluating each image dimension of the channels, including those totally missing from the literature. This measurement tool harnesses website and store characteristics that are very operational and easily actionable. This study demonstrates that a website can be described and analyzed along the same lines as a store, and shows the relevance of incorporating connections with other channels, particularly into the scope of website image.     

One firm,one product,two prices: Channel-based price differentiation and customer retention

Every multichannel retailer must decide whether and how to apply channel-based price differentiation. This study identifies channel-related price differentiation instruments and considers their effects on customer retention. It empirically tests hypotheses using a laboratory experiment and analytically investigates feasibility conditions. Results show that channel-based price differentiation positively affects customers through perceived value but harms retention through price unfairness and limited self-determination. The mobile communications retailer in this study would require 5.1% lower operating costs online to ensure its profitability. These results indicate that multichannel retailers with channel-based price differentiation should carefully select their price instruments and meet the feasibility conditions.     

Acquiring customers through online marketplaces? The effect of marketplace sales on sales in a retailer's own channels

Online retailers are increasingly using third-party online marketplaces (e.g., Amazon, Taobao) as an alternative sales channel to their website. While cross-channel sales elasticities have been established for many sales channel combinations (e.g., adding bricks to clicks), we lack an understanding of whether the use of third-party marketplaces grows or cannibalizes a retailer's sales. Practitioners argue that firms can build their e-commerce business through acquiring customers by selling on the marketplace. Indeed, a marketplace could complement a retailer's offering (e.g., acquiring new customer segments), although inventory effects might mitigate this complementarity. Alternatively, cannibalization might occur from losing customers from one's website to the online marketplace. The present research investigates which of the two opposing forces prevails using a time series of category sales data from one of the largest global marketplace sellers. The authors use vector autoregressive modeling to show that marketplace sales increase sales on a retailer's website (0.014% for every 1% in marketplace sales). This effect is strongest for categories with large choice and low product prices. Acquiring customers through the marketplace might be cheaper than through other sources (estimated at 24% of initial sales). However, online retailers should be aware that this strategy strengthens the marketplace and may have potential negative long-term consequences (e.g., through marketplace control of the customer relationship).     

How to increase multichannel shopping satisfaction? An adapted Kano based stage-gate approach to select new technologies

Today, brick-and-mortar retailers with integrated online shops have many alternatives to increase their customers’ shopping satisfaction: They could invest in (for the retailers) new physical store technologies (e.g., beacons or magical mirrors if not implemented up to now), new online shop technologies (e.g., visual tagging or webcams), or in new less technology-based improvement options (e.g. events or product testing). We propose an adapted Kano based stage-gate approach to support multichannel retailers confronted with such selection problems. The approach is applied to a major European sporting goods retailer. 37 improvement options are pre-selected and evaluated by current and potential customers. It can be shown that instore returns, instore services, reserve&collect, click&collect, customization, product testing, and magical mirrors are drivers of satisfaction for the current customers and should be implemented in contrast to, e.g., geofencing or beacons. The potential customers are more technology-savvy, but show similar categorizations as a current customer segment and so confirm the selection.     

The Drivers of E-tailers' Price Levels

One of the most important topics in online pricing is understanding the drivers of online price levels for different types of retailers, in order to better understand competition across retail channels. We developed a conceptual framework and conducted an empirical analysis on price levels in the books category among different e-tailers (pure play and multichannel) in Italy and obtained a dataset comprising 5,400 price quotes during 2002. We ran a correlation analysis that showed that e-tailer graphics, branding and trust, and shipping services are highly correlated to price levels. Moreover, we developed a regression analysis that showed that first impact attributes like graphics and navigability are the most important drivers of online price levels. We identify some areas of future research and offer some managerial insights.     

“Showrooming” in Consumer Electronics Retailing: An Empirical Study

The present study focuses on multichannel retailing strategies and describes the state of consumer behavior regarding “showrooming” (the practice of examining merchandise or products in a retail store and then buying it online). Founded on the theory of planned behavior (TPB), the authors examine the antecedents of showrooming using data collected from a sample of 176 retail consumers. Based on their results, they define perceived control, website compatibility, and subjective norms as the main antecedents of consumer attitudes toward online purchases. Additionally, they state that previous experience and reasons against purchasing online are directly associated with consumers’ intention to purchase on the retailer’s website. Finally, some theoretical conclusions and practical implications for retailers are discussed.     

Evolution of retail formats: Past,present, and future

In this paper, the authors review current literature on retail formats and propose a new customer-centric framework for retailers to focus on as they continue to innovate and evolve. Specifically, they review the literature on how formats compare in their attributes and compete with each other; the role of customer behavior in format choice; and developments in multichannel and omnichannel retailing. They propose a framework for retail formats suggesting two paths – either reduce friction in the customer journey or enhance customer experience. They discuss the challenges faced by offline (physical store-first) and online (digital-first) retailers and elaborate on strategies each type of retailer is pursuing to address these challenges. Finally, they offer directions for future research in this domain. They conclude by calling for newer digital-first and physical-first players to continue coming up with different customer-centric formats, which they predict will slowly morph into integrated retailers, leaving space for newer players to enter the market and hence keep the wheel of retailing spinning.     

The multichannel customer’s service experience: building satisfaction and trust

Multichannel retailers dominate today’s retail landscape. Practitioners and researchers are particularly interested in understanding how the multichannel strategy helps establishing and developing relationships with customers. Our findings, from 302 customers of multichannel financial services firms, show that frontline employees’ customer facilitation behaviors (traditional channel) have a stronger impact on satisfaction than e-psychological benefits (derived from the company’s Web site), while their positive influence on trust is not significantly different. Implications for theory and practice are discussed.     

Multichannel shopping: The effect of decision making style on shopper journey configuration and satisfaction

Prior research demonstrates links between the maximizing tendency in decision making and online shopping behaviour, with maximizers spending considerable time on their online shopping yet being somewhat dissatisfied with their shopping decisions. Our research extends prior knowledge to the multichannel shopping context. Multichannel shopper journeys are an important form of shopping, whereby the activities comprising a shopping event occur in more than one channel. Our quantitative study examines relationships between two dimensions of maximizing, maximization as a strategy and maximization as a goal, multichannel shopper journey configuration and subsequent affect. Maximization as a strategy directly and positively relates to the numbers of channel switches and of pauses in a shopper journey and to the use of product and retailer reviews. It is indirectly associated with increased counterfactual thinking and regret, and with decreased satisfaction. Maximization as a goal has no effect on multichannel shopper journey configuration or on affect. Our findings have managerial relevance for multichannel retailers. We demonstrate that product and retailer reviews are of particular importance to those employing maximization as a shopping strategy, as they mitigate against their increased tendency to engage in counterfactual thinking. As counterfactual thinking leads maximizers to increased regret and decreased satisfaction, multichannel retailers can improve shopper satisfaction by actively directing their customers to reviews. Shoppers using maximization as a strategy could be helped to configure their shopper journeys with fewer channel switches and fewer pauses, as these provide maximizers with opportunities to doubt their decisions.     

Influence of congruity in store-attribute dimensions and self-image on purchase intentions in online stores of multichannel retailers

Online stores of multichannel retailers continue to lag pure internet retailers with reference to consumers' shopping intentions and sales. This study develops and tests a framework in which (a) trust and attitude (conceptualized as a second-order construct with hedonic and utilitarian dimensions) influence purchase intentions, (b) congruity between the multichannel retailer's land-based and online stores (conceptualized as a second-order constructs made up of seven dimensions: aesthetic appeal, navigation convenience, transaction convenience, atmosphere, service, price orientation, and security) influences trust in and attitude toward the online store, and (c) congruity between consumers' self-image and perceived image of the online store influences trust in and attitude toward the online store. The findings provide robust support for the framework and have strong implications for theory and practice.