Consumers’ responses to price presentation formats in rebate advertisements

Although rebates offer an important and popular promotion tool in retailing, little research has investigated whether their presentation format can influence consumers’ evaluations of and purchase intentions toward products featured in rebate ads. Retailers generally use two different rebate ad formats: one that transparently shows both before- and after-rebate prices and the other that displays the after-rebate price in relatively large print and the before-rebate price in small print. Three experimental studies attempt to determine which format is more effective for eliciting favorable consumers’ responses, and the results show that the format emphasizing only after-rebate prices generally leads to lower purchase intentions because of the negative affect it elicits. Furthermore, the effect of a rebate presentation format is moderated by the rebate amount, consumers’ price knowledge, and rebate processing time. The results show that consumers’ responses to different rebate presentation formats entail both emotional responses and rational evaluations.     

Rewarding customers who keep a product: How reinforcement affects customers' product return decision in online retailing

A lenient product return policy represents the status quo of current return management practice in online retailing because it increases customers' order tendency. However, at the same time, many customers tend to return products under this policy, which incurs considerable costs for retailers. The present research introduces a keep reward (i.e., providing incentives to keep a product) as a new promotion strategy to improve the conventional lenient policy. Drawing on operant conditioning, the authors propose and test the reinforcing effect of a keep reward on customers' keep decision, compared to the conventional lenient policy. Results of a qualitative pilot study suggest that a keep reward is generally feasible in online retailing practice, especially in the low‐ to mid‐price segment and with rewards that are linked to future purchases. Two experimental studies verify the positive effect of a keep reward. Study 1 shows that it substantially increases keep intention compared to a conventional lenient policy. Study 2 shows that the effect on keep intention is moderated by customers' online shopping frequency, and this moderating effect is mediated by repurchase intention. In particular, the keep reward is most effective among frequent shoppers because they are more inclined to repurchase and thus, benefit from the reward. In summary, both studies support the keep reward as a valuable add‐on to the conventional lenient policy because order intention remains comparably high, while keep intention is higher. Theoretical implications and recommendations for online retailers on how to implement a keep reward in different industries are discussed.     

“Take it or leave it?”: Evidence on cultural differences affecting return behaviour for Gen Z

Both culture and age have a direct impact on consumers' shopping behaviour. Similarly, this paper explores consumers’ return behaviour in two different cultural contexts, China and Italy, characterized by low/high individualism vs. high/low collectivism. To this end, the research employs a qualitative approach based on semi-structured interviews collected in May and June 2020 for a sample of Generation Z consumers in China and Italy. Results show differences and similarities affecting consumers' willingness to return in the different stages of effective purchase behaviour. For instance, in the pre-purchase stage, Chinese consumers often show a limited interest in return policies since they usually prefer not to return and repurchase otherwhere the product to maximize their cost-benefit trade-off. In contrast, when retailers adopt return policies, Italian consumers are more interested in feeling protected against the risk of wrong purchases. Instead, both samples are very attentive in return and refund efficiency in the post-purchase stage, which are perceived as two discriminating factors in terms of repurchase from the same retailers.This study offers theoretical and managerial insights towards consumers' return behaviour, offering new directions for future studies.     

The investigation on dimensions of e-satisfaction for online shoes retailing

Purpose—Online retailing has become a standard component in companies' multi-channel structure. This trend also involves an increasing number of experience attribute dominated products, which traditionally rely on brick-and-mortar retailers. These manufacturers have started to open their own online retail stores. This study identifies the key determinants of e-satisfaction at different stages of shoes online shopping process.Design/methodology/approach—We collect consumers' reviews about their online shopping experiences from online review websites. We use both qualitative and quantitative approaches to analyze the dataset, and investigate the complete process of consumers' e-tailing experiences.Findings—this research identifies the two key factors driving e-satisfaction of purchasing experience attribute dominated products online: product selection and customer service. In particular, our findings show that product selection is critical for e-satisfaction in the pre-purchase stage, and that customer service is more important in the post-purchase stage. Lastly, the study finds that manufacturers' websites often receive more negative reviews because of their poor service recovery strategies in the post-purchase period.Research limitations/implications—This study emphasizes the importance of adopting a dynamic approach by considering various stages of the consumer's online shopping experience. This study focuses on one specific experience good; the shoe industry.Practical implications—The results of this study are invaluable to firms interested in providing experience attribute dominated products online. Our findings indicate that product selection and especially post-purchase service are critical for a successful e-tailing.Originality/value—This paper emphasizes the importance of taking a dynamic view to investigate consumer's e-tailing experience. We adopt both qualitative and quantitative approaches in our study.     

Using transformational appeals to enhance the retail experience

Transformational appeals hold enormous promise for retailers. These appeals go beyond providing concrete, factual data to making the consumer's actual experience more enjoyable. A field study and a controlled, follow-up experiment are conducted to empirically assess the efficacy of transformational appeals compared to informational appeals in retail settings. Results suggest that transformational advertising affects consumers’ initial retail experiences, but are not effective when a consumption experience is already well defined. Further, transformational appeals enhance hedonic and symbolic benefits but do not appear to affect evaluations of functional benefits. The underlying processes guiding these effects and implications for marketing theory and practice are discussed.     

Impact of product-specific variables on consumers' post-consumption behaviour for apparel products: USA

Abstract Companies spend valuable resources developing and distributing products to please the consumer; however, products that do not match consumer performance expectations during post-purchase use often result in consumer dissatisfaction. This situation can lead to redress-seeking behaviour and negative repurchase behaviour. Understanding factors influencing consumers' post-purchase behaviour can provide retailers with information to make accurate purchasing decisions and improve interpretation of the post-return data. This study examines product-specific variables for apparel purchases and their relationship with post-consumption behaviour. Product cost and product type were found to be related to redress and repurchase behaviour among dissatisfied consumers. Implications for apparel retailers and consumer educators are discussed.     

Increasing customer purchase intention through product return policies: The pivotal impacts of retailer brand familiarity and product categories

This study gauges customer perspectives to investigate how return policy generosity (the degree to which a retailer imposes minimal restrictions on returns) influences customer-perceived value and customer purchase intention. It also examines two moderators, retailer brand familiarity (the extent to which the retailer brand is well-known) and product categories (the difference between products with respect to the magnitude of effort required to make a return). An experiment with a 2 × 2 × 2 factorial design was conducted. The results show that return policy generosity increases customer purchase intention by enhancing the perceived value of the policy. Lesser-known retailers benefit more from generous return policies than their well-known competitors, particularly when a product requires significant return effort. Well-known retailers benefit from offering generous return policies only for product categories that involve low levels of return effort. The findings of this study suggest that if a retailer formulates a return policy without considering the moderating effects of retailer brand familiarity and product category, then it will tend to over-invest if the return policy is generous.     

The influence of online product recommendations on consumers’ online choices

This study investigates consumers’ usage of online recommendation sources and their influence on online product choices. A 3 (websites) × 4 (recommendation sources) × 2 (products) online experiment was conducted with 487 subjects. Results indicate that subjects who consulted product recommendations selected recommended products twice as often as subjects who did not consult recommendations. The online recommendation source labeled “recommender system,” typical of the personalization possibilities offered by online retailing, was more influential than more traditional recommendation sources such as “human experts” and “other consumers”. The type of product also had a significant influence on the propensity to follow product recommendations. Theoretical and managerial implications of these findings are provided.     

Paying before consuming: Examining the robustness of consumers’ preference for prepayment

Prior research on consumers’ preference for timing of payment suggests that consumers prefer to prepay for certain kinds of purchases (e.g., vacations) and postpay for others (e.g., washer dryers). This research extends this finding by first comparing preference for timing of payment for products that vary by type (hedonic vs. utilitarian) and durability (nondurable vs. durable) to reveal that it is only hedonic-nondurable products that elicit a preference for prepayment (study 1). The two studies that follow examine the robustness of the prepayment preference by (1) varying the favorability of the transaction (study 2), and, (2) by eliminating the choice of payment timing from the transaction (study 3). Results reveal that the preference for prepayment for hedonic-nondurable goods is robust when transaction characteristics are favorable but shifts when transaction characteristics are unfavorable. Furthermore, when the choice of payment timing is not offered, consumers become indifferent towards when they prefer to pay for hedonic-nondurable products. The implications of these findings for marketers and retailers are discussed.     

Perceptions of assortment variety: The effects of congruency between consumers’ internal and retailers’ external organization

This research shows that consumers’ perceptions of variety and satisfaction are dependent upon how the assortment is organized, both internally by the consumer and externally by the retailer. The results of three laboratory studies indicate that for familiar categories, congruency between a consumer's internal categorization structure and the external store layout leads to higher perceptions of variety and higher satisfaction with product choices, while for unfamiliar product categories, congruency between shopping goals and external structure leads to lower perceptions of variety but increased satisfaction with the store's assortment. However, if retailers institute external category filters congruent with consumers’ internal shopping goals that allow them to bypass products, consumers have both lower variety perceptions and satisfaction with the assortment offering.     

Pricing and return strategy of online retailers based on return insurance

With the development of e-commerce, online shopping has become increasingly common, and as a result, consumers inevitably encounter the problem of returns. Therefore, pricing, return policy and return insurance strategy have attracted considerable research attention. In this paper, we construct four models to study pricing, return policy and return insurance strategy. We show that when a product's net residual value is greater than or equal to zero, online retailers should offer a money-back guarantee (MBG) return policy; however, they do not have to offer free return insurance because the latter does not increase their market share and profit, nor does it increase consumer surplus. The optimal strategy of insurance providers is unaffected by whether the policyholder is an online retailer or a consumer and should be neutral, which helps insurance providers gain the trust of policyholders. Consumers should buy products only when online retailers offer an MBG return policy; however, consumers should not do so if the online retailer provides free return insurance.     

Uncovering consumers’ returning behaviour: a study of fashion e-commerce

Abstract

The increasing prominence of e-commerce is shaping the nature and dynamics of retailing. E-commerce offers consumers lower prices, wider product categories and a more convenient shopping experience. In addition, consumers seek ways to manage the risk that is often perceived when making purchases online, which is why retailers’ online return policies have become an increasingly important attribute through which companies compete. Lenient return policies fuel unnecessary ordering and increase return rates, which in turn has major implications both for consumer behaviour and for managing the increasingly complex ecological and economical issue of online returning. Despite its relevance, prior research has paid limited attention to this evolving phenomenon. Consequently, the purpose of this study is to explore and analyse online returning behaviour in the context of fashion merchandise. As a result, 10 categories of online returning behaviour are identified that capture the reasons why consumers actually return items they have ordered online. These categories are further linked with when the decision to return ordered items emerges. Based on the results, managerial implications are provided to give guidance in managing online returning behaviour.     

Low price guarantees as signals of lowest price: The moderating role of perceived price dispersion

This article presents two experimental studies examining the effects of a low price guarantee on consumers’ pre-purchase evaluations and behavioral intentions. The authors first examine how the effects of a low price guarantee are moderated by consumer perception of market price dispersion. The results show that low price guarantee effects are likely to be attenuated when consumers perceive market price dispersion for a product to be high. The second study shows that higher levels of penalty can help restore a low price guarantee's effectiveness. Specifically, a low price guarantee with progressively higher levels of penalty leads to incrementally more favorable effects on key consumer outcomes when perceived price dispersion is high. Interestingly, penalty level has no such incremental benefit in case of low perceived price dispersion. Theoretical and managerial implications of the authors’ findings, the limitations of the studies, and future research opportunities are discussed.     

Shopping plans,buying motivations,and return policies: impacts on product returns and purchase likelihoods

Product return behavior and factors that contribute to product returns are an under-researched area, despite significant importance to manufacturers and retailers. The current research attempts to fill the gap by focusing on two factors that shape consumer purchase behavior: (1) whether purchases are planned or unplanned, and (2) whether hedonic or utilitarian motivations drive purchases. The findings show that purchase plans and buying motivations have distinctive and interactive impacts on pre-purchase concerns, self-estimated likelihood of returning purchases, and purchase intentions with or without return policies. When hedonic motivation drives purchases, unplanned (vs. planned) purchases lead to higher return concerns, higher return likelihood, and lower buying intentions. When utilitarian motivation drives purchases, planned and unplanned purchases have comparable return concerns, return likelihood, and buying intentions. This interaction effect on buying intentions dissipates when a lenient return policy is offered.     

Consumer Responses to Vertical Service Line Extensions

Vertical line extensions extend an established brand to products at different price/quality points. In this study, we examine consumer evaluations of vertical service line extensions and the feedback effects of these extensions on the parent brand. Findings of two empirical studies in the hotel industry indicate that consumers perceive higher risks in step-up extensions than in step-down extensions, which consequently influences their evaluations of the extensions. This effect of extension direction is also found to be moderated by risk relievers such as service guarantee and consumers’ prior knowledge in the service category. Furthermore, we found that a parent brand receives more positive evaluations after the introduction of a step-up extension than that of a step-down extension.     

The effects of traffic light labels and involvement on consumer choices for food and financial products

Traffic light (TL) labels that inform consumers regarding product safety have received increasing attention in different fields. Behind the background of behavioural economics, this paper presents the results of a split‐sample choice experiment conducted in Germany to evaluate the impact of TL labelling on purchases of food and financial products. We hypothesize that consumers experience different levels of involvement with these two types of products, leading to different recommendations regarding the use of TLs. The results show that TLs affect consumer purchases of both product groups by focusing their attention on specific product attributes. For food, whereas the low‐fat attribute has no significant impact on food choices that do not include TLs, this attribute has a positive impact on choices once it is signalled with a TL label. The positive evaluation of the organic production attribute of a food product without a TL decreases when the same product is labelled with a TL. In the case of financial products, TLs significantly reinforce the impact of all characteristics on choice probability. TLs also generate a halo effect with regard to return variance. Although consumers demonstrate different levels of involvement for the two types of products, involvement does not always impact the evaluation of attributes. Compared with less involved consumers, more involved consumers exhibit more heterogeneous evaluations of the return variability attribute in the case of the financial product and the organic attribute in the case of the food product.     

The Impact of Brand Delisting on Store Switching and Brand Switching Intentions

A tool retailers often use to improve their negotiating position with brand manufacturers is to delist - or threaten to delist - the manufacturers’ brand. Because brand manufacturers rely mainly on retailers to sell their products to consumers, a brand delisting will cause a sales loss for the brand manufacturer. Therefore, many brand manufacturers feel enormous pressure to give in and improve buying conditions to favor the retailer. The question thus emerges: Can a brand manufacturer resist a retailer's threat to delist its brand(s)? If a brand delisting severely hurts retail sales, it is easier for a brand manufacturer to resist. The authors study the impact of brand delistings on store switching and brand switching using a controlled online experiment and in-store shopper survey. They develop and test a conceptual model with several antecedents of consumers’ reactions to a brand delisting and conclude that brand equity, market share, and the products’ hedonic level drive store and brand switching.     

Don't ignore the floor: Exploring multisensory atmospheric congruence between music and flooring in a retail environment

In retail environments, consumers commonly evaluate products while standing on some type of flooring and concurrently being exposed to music; however, no study has examined the interaction of these two atmospheric cues. To bridge this gap, this research examines whether retailers can benefit from creating multisensory atmospheric congruent rather than incongruent retail environments of flooring and music. The results of an experiment in a real retail store reveal positive effects of multisensory congruent retail environments (e.g., soft music combined with soft flooring) on product evaluations. This study provides a new process explanation with consumers’ purchase‐related self‐confidence mediating these effects. Specifically, consumers in congruent rather than incongruent retail environments experience more purchase‐related self‐confidence, which in turn leads to more favorable product evaluations. Furthermore, this study shows that consumers with a low rather than a high preference for haptic information are influenced more by multisensory atmospheric congruence when evaluating a product haptically.     

Partitioned pricing: Can we always divide and prosper?

The widespread use of partitioned pricing by marketers may be the result of perceptions that it enhances the perceived value of the offer. This research identifies boundary conditions for the effectiveness of partitioned pricing by examining the role of the reasonableness of a surcharge and the need for cognition in consumers’ processing of pricing information. Three studies, each consisting of two experiments, examine the effectiveness of partitioned versus combined pricing and show that for high need for cognition persons, partitioned pricing has a more favorable effect than combined pricing when the surcharges are reasonable; these effects reverse when the surcharges are unreasonable. The studies indicate no differences between partitioned and combined pricing across surcharge conditions for low need for cognition consumers. A fourth study incorporating both reasonable and unreasonable surcharges in one experiment substantiates the conclusions of the first three studies. Finally, detailed process measures provide evidence that high versus low need for cognition persons evaluate partitioned pricing information differently in distinct surcharge conditions.     

Reciprocal Effects of the Corporate Reputation and Store Equity of Retailers

Retailers aim to strengthen their ability to influence consumer behavior by building corporate reputation and store equity: for instance, by making promotional investments. However, little is known about the directionality of consumers’ corporate and store associations, that is, how reciprocal relationships between consumers’ perceptions of corporate reputation and store equity affect store loyalty. To illuminate this issue, we draw upon a study with a cross-sectional design and two studies with longitudinal designs. We find that retail store equity interacts with corporate reputation and is a more important driver of increased loyalty than corporate reputation. We conclude that retailers should pay attention to reciprocal effects, especially in determining the relative allocation of investments across corporate and store levels.