In this paper, we investigate the impact of a service process improvement in front-end retail operations on the waiting experiences of shared customers, that is, those customers who patronize a retailer as well as its competitors. Our findings from two studies—a field study and a controlled laboratory experiment—suggest that while customers’ waiting time perceptions are independent across competing firms, their waiting time satisfaction is interdependent. As a result, the impact of a retailer's service improvement initiative that reduces waiting times is not merely local to the retailer but propagates to its competitors through its shared customers. Specifically, such an improvement not only raises shared customers’ satisfaction with the focal retailer, it also concurrently lowers their satisfaction with the retailer's competitors. By implication, current approaches that assess the impact of a service process improvement by just measuring the difference in customer satisfaction before and after the improvement may be underestimating the true impact of such improvements.
The duration of the waiting time at checkout is one of the key service attributes on which retailers compete with one another (Casey 2004). Customers often rate waiting as the single biggest complaint about retail encounters (Litwak 2003), and consider it as an important factor when deciding where to shop (Doyle 2003).1 In an effort to better manage their customer's wait, retailers, including supermarkets, home-improvement stores, and pharmacies are focusing on convenience, and investing significant resources in-process improvements and technology, such as redesigned service lines, self-checkouts, pagers, self-scanners, remote-ordering terminals, and other “queue busting” devices (Higgins 2004; New-Fielding 2002; Wilbert 2003).
These investments are based on the assumption that a better management of the waiting process will improve customer perceptions of service quality (Berry, Seiders, & Grewal 2002; Bitner, Booms, & Tetreault 1990; Brady & Cronin 2001), increase satisfaction levels, and strengthen the competitive position of the retailer (Zeithaml, Berry & Parasuraman 1990). However, we need to answer several questions before we can assess the overall competitive impact of such process improvements and make informed go-no-go decisions (Rust, Zahorik, & Keiningham 1995). First, is the impact of a process improvement local to the retailer or does it also propagate to affect customers’ service experiences at its competitors? Second, does an improvement by one retailer change customer perceptions of the waiting time at its competitors? And third, is the impact on waiting time perception the same as that on waiting time satisfaction?
Current research on the efficacy of quality improvement initiatives provides only partial answers to these questions. It focuses largely on whether or not the adoption of the initiative results in changes in the satisfaction or quality ratings of the firm's own customers (Bolton & Drew 1991; Simester, Hauser, Wernerfelt, & Rust 2000). It does not explore whether the initiative also influences customers’ experiences with the firm's competitors. Related research on the impact of multiple reference points does examine how competitive expectations or foregone alternatives influence customers’ post-purchase evaluations (Boulding, Kalra, Staelin, & Zeithaml 1993; Inman, Dyer, & Jia 1997). However, it does no explore the impact of process changes on customers’ service experiences.
In this paper, we combine the foci on the longitudinal aspects of post-purchase evaluation and on multiple expectations to examine the customer-based impact of a service process improvement. We report results from two related studies—a field study and a controlled experiment—designed to evaluate the impact of competition on waiting time perception and satisfaction. We conclude with a discussion of our findings and their managerial implications.
