The Effect of Perceived Site-to-Store Service Quality on Perceived Value and Loyalty Intentions in Multichannel Retailing

Abstract

As shopping patterns evolve using multiple channels, innovative retailers developed service programs for Site-to-Store settings. This study aims to understand what cues shoppers use in judging the quality of service when they buy online and go offline for purchase collection. An empirical study is conducted to: (i) develop a scale for measuring service quality; and (ii) examine the relationships between service quality and the variables perceived value and loyalty intentions. Analytical work suggests that service quality is a function of: website efficiency, website reliability, information quality, assurance, responsiveness, personalization and integrated-pickup. Moreover, we found that the perception of service quality improves perceived value that in turn influences loyalty. The dimension of integrated-pickup is one of the key dimensions influencing significantly overall service quality, perceived value and loyalty intentions. Managerial and research implications stemming from the empirical findings are presented and future research needs are suggested. Introduction Today's shoppers tend to 'mix and match' channels for product research, purchase and delivery. Some shoppers search and browse products online and go offline for the purchase, payment and collection, while others go offline for the 'feel and touch' experience and conduct the purchase transaction online for better prices and more attractive promotions. Such shoppers tend to use the channels alternatively adjusting each channel for its strengths. One of the recognized practices of multichannel shoppers is that they conduct their purchase using the web yet they utilize a physical store for purchase collections. This type of multichannel shopper - termed here online-focused shoppers - prefer to pickup their purchase from a store to decrease the monetary and non-monetary costs (e.g., time, effort, shipping costs and psychological cost) (Hoffman & Novak 1996) (see Figure 1). Previous research found online shoppers to be goal-oriented shoppers (Hoffman & Novak, 1996) who seek accomplishing their task with little effort that in turn decreases monetary and non-monetary costs. With shoppers' enthusiasm for online shopping, issues of shipping costs and trust form some barriers to online shopping (Hoffman & Novak 1996). Therefore, unsurprisingly, online-focused shoppers who utilize the multichannel service systems represent a considerable number of shoppers. Responding to such variability in shopping, successful retailers developed multichannel service systems to accommodate the emerging needs of online-focused shoppers. Based on eMarketer's (20 1 0a) survey, about 34% of retailers in North America offer their customers the service of 'buy online, pickup and around 44% plan to provide this service in the near future. For example, the in-store pickup program of Sears.com' shoppers accounts for about 40% of its online orders (InternetRetailer, 2008). And about 32% of Shopatron's consumers had ordered an item online and picked it up in a store, while 80% of those who used the service were considering using it again (InternetRetailer, 2008). Similarly, Wal-Mart's program 'Site-to-Store' accounts for more than one third ofWalmart.com sales (RetailNetGroup, 2009). Retailers such as HomeDepot, O'Reilly Auto Parts, Apple, BestBuy, Borders, Barnes & Nobles, JCPenney, Sears, Lids, L.L. Bean, REI and Nordstrom, to name a few, offer their customers in-store pickup service. Online-focused shoppers as a segment of multichannel shoppers, was found to be very demanding, sophisticated, and valuable (Verhoef et al., 2007). Therefore, providing superior service quality that meets their expectations and strengthens their loyalty is an essential issue in multichannel retailing. The concept of service quality has long been acknowledged in the literature as a key determinant of customer satisfaction and loyalty (Parasuraman et al. 2005; Swaid and Wigand, 2009). …

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