This study investigates how various elements of customer service affect the behavioral intention to shop at the online or the offline store for different product categories. We focus on the perceived value, trust, interface, empathy, and offline presence as the dimensions of the customer service for the retail store (online or offline). Using 317 respondents from the online stores’ users, this study finds that perceived value is the strongest predictor for future intention to shop at online stores, whereas offline presence of an online store did not enhance the future intention to shop at online stores. Other dimensions such as enhanced trust and ease of interface strengthen the intention to purchase at the offline stores. Finally, perceived value and empathy associated with online stores harm the offline stores. In synch with the Theory of Congruence, this study supports the notion that the perceived congruence between product type and retail store type affect their intention to purchase certain product categories at the online stores and to purchase other groups of product categories at offline stores. Further ramifications of these findings are discussed in the paper.
Since the introduction of online retailing, there has been an ongoing debate about which retail type – online versus offline – will dominate the market place (Doherty and Ellis-Chadwick, 2010, Mahasan et al., 2002 and Weltevreden, 2007). While online retailing experienced an impressive growth, e.g., annual growth rate of 18% during 2002–2008, recent numbers present a more modest picture, e.g., the growth rate was 16.3% in 2010 (US Census Bureau, 2012). Some even speculate that online retailing will plateau by 2014 to sales volume of $250 billion (about 8% of US total retail sales) and an average growth of 10% per year (Schonfel, 2010). The growth of online retailing has been attributed to several factors, of which customer service is identified as an important one (Keblis and Chen, 2006, Walsh et al., 2010 and Yoo et al., 2010). Recent studies have found that a high percentage (82%) of consumers are satisfied with their purchase experience at an online store, whereas, the corresponding figure for the offline stores is only 63% (Caruana and Ewing, 2010 and Mitra and Fay, 2010). Further, some researchers suggest that the consumers may see a natural congruence between product type and retail type (Konuş et al., 2008 and Schröder and Zaharia, 2008). To make sense of these confounding scenario, we argue that the future of online or offline retailing may depend on the customer service provided by the retail and the extent to which this surmounts the stereotypical congruence between product type and retail type. Specifically, this study investigates the relationship between the customer service provided by online retailers and the purchase intentions towards products that are typically seen as congruent with online or offline retail type.
The importance of this study is underscored by the question if online stores will eventually outdo the physical stores (Weltevreden, 2007) or will the online–offline battle reach a balance based on consumer comfort with buying some goods in an online environment and others in an offline environment. Although some product categories i.e., books, computer hardware and software, apparel and toys are the top five best selling product in an online retail environment (Schonfel, 2010), we see other product categories hardly take-off in online environment. With over 75% of offline stores have created online presence to enhance their competitiveness and to counter the erosion of market share to online store, Benedicktus et al. (2010), in the same time, this strategy enables the consumers to go back and forth between online and offline environment to search for information and purchase the merchandise in a retail environment they feel comfortable. This may be one reason that in 2010, the consumers’ online activities influenced 42% of physical stores’ sales (Schonfel, 2010). Kwon and Lennon (2009) also found a reciprocal relationship between consumer shopping behavior in online and offline stores. Schröder and Zaharia (2008) suggested that different stages of shopping process influence the preference for the shopping channel. Further, although online retail sales represents a small percentage (less than 10 %) of US’ total retail market (Schonfel, 2010), the increasing ease in using the features of online transaction medium might lure consumers to use it more often if they perceive that online stores are able to better serve their needs. Our study, should help answer if this is inevitable or perhaps both online and offline retail stores will serve different needs—i.e., different retail types will be seen differentially suitable for different basket of goods.
