PDF Ebook A Conceptual Model of Channel Choice: Measuring Online and Offline Shopping Value Perceptions
Next from being a source of communication, information and entertainment, the Internet is increasingly seen as a vehicle for commercial transactions (Swaminathan, Lepkowska-White and Rao, 1999). Recent work shows that consumers have increasingly favorable attitudes toward online shopping (Lohse, Bellman and Johnson, 2000). Simultaneously, according to a study performed in 2002 by the national association of German retailers (HDE), 29% of the German retailers now offer their products and services online. Despite these positive signs, online sales still account for less than 2% of total retail spending (Retail Forward, 2003). With the advent of multiple channels (telephone, Internet, catalog, etc.) and a corresponding increase in the competition between channels, the understanding of consumers to purchase from one channel rather than another becomes an increasingly input to channel design and management (Black et al., 2002: p. 162).
Previous work compared the online and offline shopping population; online shoppers appear to be younger, wealthier, better educated, have higher computer literacy, spend more time on their computer and on the Internet, find online shopping to be easier and more entertaining and are less fearful of financial loss from online shopping (cf. Swinyard & Smith, 2003). Additionally, online shoppers possess an internal rather than an external locus of control (Hoffman and Novak, 2000), are more goal-directed rather than experiential (Gilly and Wolfinbarger, 2000), and have a ‘wired’ lifestyle with scarce leisure time (Lohse, Bellman and Johnson, 2000).
Many authors have studied the online channel from a variety of theoretical perspectives, including Diffusion of Innovations (DOI), Technology Acceptance Model (TAM), Theory of Planned Behavior (TPB), Service Quality (SERVQUAL), Uses and Gratification Theory and Transaction Cost Analysis (TCA) (cf. Devaraj, Fan, and Kohli, 2002). However, most studies do not focus on the subject of channel choice, but rather aim at determinants of e-satisfaction ({Anderson and Srinivasan, 2003; Swaminathan, Lepkowska-White and Rao, 1999; Wolfinbarger & Gilly 2002) or the key dimensions of website’s success (e.g., Ranganathan and Ganapathy, 2002). In this way, the Internet is often researched in isolation of the offline channel, although both channels actually perform the same functions (cf. Peterson, Balasubramanian and Bronnenberg, 1997).
To fill this gap, researchers could compare channels’ capability of fulfilling functions (cf. Kotler 1997; Peterson, Balasubramanian and Bronnenberg, 1997), but essentially channel choice comes down to the relative channels’ perceived benefits and costs. This paper therefore uses the concept of perceived value, as it represents a trade-off of all salient “give and get components” (Zeithaml, 1988). Consumers are expected to choose that channel that leads to the highest expected value. As such, a side-by-side comparison is possible to elicit perceptual differences of using channels.
The objective of this paper is to gain a better understanding of channel choice by developing a theoretical framework that shows the relationships between the antecedents and mediators of perceived value and purchase intentions in both channels. Results may indicate the performance of channels in delivering value to consumers and how value is constructed in both channels. Perceptual differences between online and offline shoppers can explain the (strength of) motivations to adopt a certain channel.
The remainder of this article is as followed. First, we discuss the concept of perceived value. Second, we present our conceptual model with its accompanying hypotheses. The third section discusses the expected differences in importance scores. The final section presents conclusions and suggests a methodology to empirically test the model.
Concept of Perceived Value
Perceived value has recently gained much attention from marketers and researchers because of the important role it plays in predicting purchase behavior and achieving sustainable competitive advantage (e.g., Bolton and Drew 1991; Cronin, Brady and Hult, 2000; Dodds, Monroe, and Grewal, 1991; Holbrook, 1994, 1999; Woodruff 1997; Zeithaml 1988). Zeithaml (1988: p.14) conceptualized perceived value as “the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given.” In this definition, the concept is measured at the product-level. It incorporates the quality of the (physical) product itself including the additional services delivered, in comparison with its relative price. It particularly refers to the value for money consumers receive, or as (Sirohi, McLaughlin, and Wittink, 1998) call it, “what you get for what you pay.” This narrow definition excludes the shopping experience. Some researchers suggest that it is more useful to measure the perceived value experienced from the complete shopping experience; thus, measuring both product value for money and the shopping experience. The reasoning behind this is that consumers optimize the full process of decision making (procedural rationality), not just the outcomes (substantive rationality) (Simon, 1976).
Previous work thus demonstrated the importance of providing customers a valuable shopping experience (Eroglu and Machleit, 1993). Consumers evaluate shopping experiences along utilitarian and hedonic dimensions (Babin, Darden and Griffin, 1994; Babin and Darden, 1995, 1996; Batra and Ahtola, 1991; Crowley, Spangenberg and Hughes, 1992; Hirschman and Holbrook, 1982). The utilitarian dimension reflects whether consumers achieve their shopping goals with minimum investments in time and effort; it relates to ‘efficiency’ (cf. Zeithaml et al., 2000). To improve utilitarian shopping value, consumers must save time and/or reduce effort by engaging in goal-directed behavior that is instrumental, purposive, and task-specific (Hoffman, Novak and Schlosser, 2002). The hedonic dimension relates to the experiential value consumers derive from the shopping process itself, by means of social interaction, personal security and entertainment (Alba et al., 1997). In this respect, consumers are more concerned with entertainment and enjoyment value; they engage in experiential behavior that is likely to be hedonic, ritualized and reflects nonlinear search (Hoffman and Novak, 1996). As Mathwick, Malhotra and Rigdon (2002, p. 53) state, “consumers who approach retail environments to browse (Bloch, Sherrel and Ridgway, 1986), or enjoy the experiential aspects of shopping (Bellenger and Korgaonkar, 1980) are motivated by the process rather than by shopping goals or outcomes (Hoffman and Novak, 1996).” Thus, hedonic and utilitarian value assessments are useful to define the shopping experience, but these are distinct from outcome quality assessments, i.e. whether the product is good value for money A broader definition is particularly useful when the product is not the focal point of interest. For example, service researchers (e.g., Grönroos, 1982; Parasuraman, Zeithaml, Berry, 1985, 1988) indicated that apart from what is delivered, the way the service is delivered is important. In a similar vein, Kerin, Jain and Howard (1992) showed the importance of the shopping experience in explaining the value perceptions of a retailer.
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