Creating Value For Online Shoppers: Implications For Satisfaction and Loyalty

EXTENDED ABSTRACT - The examination of customer value determination and value delivery has recently become a focal point in the marketing literature. However, most empirical studies to date have examined these constructs and their relationships within the context of Aoff-line@ shopping. On the subject of on-line shopping, most current research examining the impact of the Internet upon consumer marketing is nothing more than Aanecdotes, experiential evidence, and ad hoc descriptive studies.@ Thus, the need for empirical research on the relationships between value, satisfaction, and loyalty within an on-line shopping context is ripe for development.

Citation:

Eun-Ju Lee (2005) ,"Creating Value For Online Shoppers: Implications For Satisfaction and Loyalty", in AP - Asia Pacific Advances in Consumer Research Volume 6, eds. Yong-Uon Ha and Youjae Yi, Duluth, MN : Association for Consumer Research, Pages: 370.

Asia Pacific Advances in Consumer Research Volume 6, 2005      Page 370

CREATING VALUE FOR ONLINE SHOPPERS: IMPLICATIONS FOR SATISFACTION AND LOYALTY

Eun-Ju Lee, California State University, Los Angeles, U.S.A.

EXTENDED ABSTRACT -

The examination of customer value determination and value delivery has recently become a focal point in the marketing literature. However, most empirical studies to date have examined these constructs and their relationships within the context of "off-line" shopping. On the subject of on-line shopping, most current research examining the impact of the Internet upon consumer marketing is nothing more than "anecdotes, experiential evidence, and ad hoc descriptive studies." Thus, the need for empirical research on the relationships between value, satisfaction, and loyalty within an on-line shopping context is ripe for development.

The authors of this study identify two types of online shopping valuesButilitarian value (including price savings, service excellence, time saving, and selection dimensions) and experiential value (including entertainment, visual, escape, and interaction dimensions). Utilitarian value is defined as an overall assessment of functional benefits incorporating the traditional price savings dimension, a service dimension, a time saving dimension, and a merchandise selection dimension. Utilitarian value is relevant for task-specific use of online shopping, such as purchase deliberation (i.e., considering the product, service, and price features before actual purchase). Experiential value is defined as an overall representation of experiential benefits from entertainment, escapism, visual appeal, and interactivity involved with online shopping activities. Experiential value is relevant for acquiring affective and social stimulation, which enhances consumers’ total online shopping experiences. These experiential value dimensions have been the subject of much research in the in-store shopping literature and have also begun to be recognized as important elements of online shopping. This value type is consistent with the emotional dimension of value, including the hedonic and affective motives, as well as the aesthetics and playfulness dimensions.

Then, the theoretical relationships between online shopping values (both utilitarian and experiential), satisfaction, and loyalty are discussed drawing on the existing literature. It is hypothesized that consumer perceptions of each of these two shopping value types will positively affect satisfaction in an online shopping environment.

H1: Consumers’ perceptions about the utilitarian value of an Internet retailer will be positively associated with their satisfaction with the Internet retailer.

H2: Consumers’ perceptions about the experiential value of an Internet retailer will be positively associated with their satisfaction with the Internet retailer.

Satisfaction is believed to be a central determinant of loyalty. Although store satisfaction has often been regarded as an antecedent to store loyalty, there is not much empirical evidence to support the relationship. However, the Internet may provide a new market rule. Because it is extremely easy for consumers to find alternatives and compare prices and service features, switching costs have been considerably lowered compared to the traditional marketplace. Therefore, customer loyalty and satisfaction will likely demonstrate a strong relationship in the online shopping context.

H3: Satisfaction will be positively related to customer loyalty for Internet retailers.

Using a two-step structural equation modeling approach and data from 817 online respondents, the impact of these online shopping values upon consumers’ satisfaction and loyalty is examined. In the first confirmatory factor analysis stage, the psychometric structure of the eight constructs and two higher-order value constructs was assessed using second-order confirmatory factor analysis (CFA). This second-order CFA model included utilitarian value (UV) and experiential value (EV). UV subsumed price savings (PS), service excellence (SE), time saving (TS), and selection (SL) dimensions. EV subsumed entertainment (ET), escape (ES), visual (VI), and interaction (IN) dimensions. The fit indices in Table III for the Measurement Model (GFI=.937, AGFI=.941, CFI=.922, IFI=.962, NFI=.942, TLI=.956, RMSEA=.047) were all above the recommended thresholds for a good fit (Hu and Bentler 1999). Next, the second step structural equation model specified three paths: (1) UV¦SAT(satisfaction), (2) EV¦SAT, and (3) SAT¦LOY (loyalty). The fit indices for the structural Model (GFI=.916, AGFI=.899, CFI=.954, IFI=.954, NFI=.932, TLI=.949, RMSEA=.049) mostly satisfied the recommended thresholds for a good fit. The effect of utilitarian value on satisfaction was positively significant (b _UV¦SAT=1.087, t=17.417) thereby supporting H1. Experiential value also had a significantly positive influence on satisfaction (b _EV¦SAT=0.422, t=6.570). Thus, H2 was also supported. Finally, the effect of satisfaction on loyalty was found to be highly significant (b _SAT¦LOY=1.129, t=20.743); H3 was also supported.

The significance of this research can be found from its integrative approach to online shopping values. The findings indicate that Internet shopping invokes different value types and that these value types additively contribute to customer satisfaction and loyalty. The fact that the second-order Measurement Model verified two overall value types (utilitarian and experiential) in the Internet shopping environment responds to recent calls for more research on consumption goals by Bagozzi and Dholakia (1999) and Woodruff (1997). The findings also lend theoretical support to the adoption of more consequence-level value drivers in consumer behavior studies. The use of second-order value types, such a utilitarian value and/or experiential value, provide both an important approach for theory testing and a more goal-oriented, consequence-level approach to predicting customer satisfaction and loyalty (Woodruff 1997). In conclusion, this study demonstrated that Internet shopping does indeed invoke various shopping values, and both utilitarian and experiential values positively affected customer satisfaction, leading to heightened loyalty.

REFERENCES

Bagozzi, Richard P. and Utpal Dholakia (1999), "Goal Setting and Goal Striving in Consumer Behavior," Journal of Marketing, 63 (Special Issue), 19-32.

Woodruff, Robert B. (1997), "Customer Value: The Next Source for Competitive Advantage," Journal of the Academy of Marketing Science, 25 (Spring), 139-153.

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