Elsevier

Decision Support Systems

Volume 109, May 2018, Pages 50-60
Decision Support Systems

Customer's reaction to cross-channel integration in omnichannel retailing: The mediating roles of retailer uncertainty, identity attractiveness, and switching costs

https://doi.org/10.1016/j.dss.2017.12.010Get rights and content

Highlights

  • The effect of CCI on customer retention is partially mediated by the PPM factors.

  • The effect of CCI on interest in alternatives is fully mediated by the PPM factors.

  • Customer showrooming strengthens the negative relationship between CCI and retailer uncertainty.

Abstract

Although omnichannel retailing has gained significant interest among academics and practitioners, the mechanisms through which customers react to Cross-Channel Integration (CCI) in omnichannel retailing remain unclear. To this end, this study builds on the Push-Pull-Mooring (PPM) framework to unpack the processes through which uncertainty, identity attractiveness, and switching costs of omnichannel retailers play pushing, pulling, and mooring roles in shaping customers' reaction to CCI. We further explore the moderating influence of showrooming in these relationships. Survey findings reveal that uncertainty, identity attractiveness, and switching costs of omnichannel retailers partially mediate the effect of CCI on customer retention while fully mediating the relationship between CCI and interest in alternatives. We also uncovered that customer showrooming strengthens the negative relationship between CCI and retailer uncertainty. We conclude this paper with theoretical and practical implications of our findings.

Introduction

Leveraging on cross-channel integration (CCI) to assimilate and coordinate multiple online and offline channels for engaging and retaining customers continues to be an elusive challenge for retailers [1], [2], [3], [4]. Despite an abundance of past studies on the operations of CCI [3], [5], [6], little is known about how CCI affects customers' reaction. Consequently, disentangling the effects of CCI on customers has been acknowledged as a critical but underexplored topic in the context of omnichannel retailing [2], [3], [7], [8]. By centering on operations in multichannel retailing [9], [10], [11], [12], [13], prior research does not yield adequate understanding of how CCI drives customers' reaction. To advance this line of research, we attempt to shed light on the distinct mechanisms through which CCI influences customers in omnichannel retailing.

Omnichannel retailing is a prevalent channel strategy among contemporary retailers [7]. It is distinct from multichannel retailing in terms of customer involvement and retailer control [14]. Whereas omnichannel retailing derives synergy from full channel integration by streamlining cross-channel interactions with customers, its multichannel counterpart is focused on the intensity with which retailers are present across diverse channels [13], [15]. Yet, in spite of the envisioned merits of CCI, an in-depth appreciation of customers' reaction to CCI is lacking [3], [6]. This in turn gives impetus to our study.

A focal objective of CCI is customer retention [2], [7], [16]. Scholars have put forth several theoretical explanations for the effects of CCI on customer retention. Whereas Melis, Campo, Breugelmans and Lamey [6] and Verhoef, Neslin and Vroomen [15] conceived retailers' attractiveness to be a crucial determinant of CCI's influence on retaining customers, Herhausen, Binder, Schoegel and Herrmann [13] as well as Neslin and Shankar [17] posited customer lock-in as the mechanism underlying customers' retention via CCI. Recently, scholars proposed retailer uncertainty as a potential hindrance for omnichannel retailers who depend on CCI for customer retention [18], [19]. Though past studies have identified distinct mechanisms which dictate the impact of CCI on customer retention, the current research landscape is rather fragmented. For this reason, we advance a consolidated framework that synthesizes and empirically validates the mediating influence of distinct mechanisms that have been promoted in prior research as drivers shaping customers' reaction to CCI in omnichannel retailing.

Moreover, extant literature has primarily focused on the effects of CCI in increasing customer retention and has not explored its impact on minimizing adverse consequences such as customers' interest in alternatives. Omnichannel retailing exists in a competitive business environment where most retailers serve customers who are free-riding on several providers [20], [21]. An omnichannel retailer that seeks to acquire and retain customers should also be vigilant against the possibility of losing customers to competitors [22] because of the latter's attractiveness [23]. Therefore, interest in alternatives is also a vital consideration when implementing CCI [24], [25]. By differentiating between customer retention and interest in alternatives, this study hence represents a holistic approach in crystallizing how CCI affects customer reaction in omnichannel retailing.

Apart from direct influences, past studies on multichannel customer behavior have also established that what customers bring (e.g., previous experience) could shape their interaction with a select channel [26]. This view is corroborated by Herhausen, Binder, Schoegel and Herrmann [13], who noted that customers' experience could moderate the effect of channel integration on their reactions. In omnichannel retailing, the proliferation of social media, in-store Wi-Fi, and mobile devices has culminated in showrooming whereby customers exploit a channel (e.g., mobile devices) for product evaluation before making purchases in another channel [27], [28]. Arguably, showrooming could potentially drive customers' reactions to retailers' strategy, such as CCI [16], because it could erode their perceived value of CCI in reducing retailer uncertainty [27], [29], in providing attractive offers, as well as in conserving time and effort [30]. This aligns with Verhoef, Kannan and Inman [8] call for further research in comprehending whether omnichannel retailers should foster or ‘push back’ customer showrooming.

Grounded in the Push-Pull-Mooring (PPM) framework, this study endeavors to uncover how customers react to CCI [31] by providing answers to the following research questions: (1) What are the mechanisms driving customers' reactions to CCI in omnichannel retailing and; (2) How does customers' usage of showrooming moderate their reactions toward CCI?

Section snippets

Cross-channel integration and customer showrooming in omnichannel retailing

Omnichannel retailing is retailing that integrates multiple channels to enable customers to simultaneously harness all available online and offline retail channels when shopping [7]. This form of retailing aims to deliver a seamless customer experience through the provision of a borderless cross-channel service system [8] in which channel activities are coordinated across areas of promotion, transaction information management, product and pricing, information access and order fulfillment, as

Hypotheses formulation

We draw on the PPM framework to advance a research model that addresses how customers react to retailers' CCI. Specifically, we conceive CCI as a form of service investment in purporting that customers' reaction to CCI, as captured through customer retention and interest in alternatives, would be determined by push, pull, and mooring factors such as retailer uncertainty, identity attractiveness and switching costs. Fig. 1. depicts our proposed research model.

Methodology

We collected data from an online survey administered on respondents recruited through Sojump [http://www.sojump.com], a popular online survey platform in China. After presenting potential respondents with a definition of omnichannel retailers in the survey questionnaire, we inserted a filtering question inquiring if respondents have “ever made a purchase from an omnichannel retailer”. Only respondents who have prior experience with an omnichannel retailer were permitted to continue with the

Discussion

The purpose of this study is to shed light on customers' reaction to CCI in omnichannel retailing. We build on the PPM framework to advance a research model in which we hypothesize that CCI, as a form of service investment, would affect customers' retention and interest in alternatives by causing variations in their perceptions of uncertainty, identity attractiveness, and switching costs of omnichannel retailers. Interesting insights could be gleaned from our empirical findings with respect to

Acknowledgement

This work was supported by the National Natural Science Foundation of China (NSFC: 71622009, 71571169, and 71571177).

Yang Li is a Ph.D. candidate in the University of Science and Technology. Her research focuses on cross-channel integration, IT business value.

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  • Cited by (0)

    Yang Li is a Ph.D. candidate in the University of Science and Technology. Her research focuses on cross-channel integration, IT business value.

    Hefu Liu is a professor in School of Management at the University of Science and Technology of China. He earned his PhD degree with the University of Science and Technology of China and City University of Hong Kong. He has published in Journal of Operations Management, Decision Support Systems, Information and Management, Information Technology and People, International Journal of Operations and Production Management, Journal of Global Information Management, and in the academic conference ICIS, PACIS and AMCIS.

    Eric T.K. Lim is a tenured Senior Lecturer in the School of Information Systems and Technology Management at UNSW Australia Business School, University of New South Wales. He holds a PhD in Business Administration from Simon Fraser University (Canada) as well as a Master of Science degree from the National University of Singapore (Singapore) and a Bachelor of Communication degree from Nanyang Technological University (Singapore). Eric's research interests focus on how public and private institutions leverage on information technologies to engage stakeholders. Eric is also interested in investigating phenomenon that reveals how technologically enabled open innovations (e.g., crowd platforms and social media) can be harnessed to benefit society. Eric has worked on research projects in collaboration with a number of public and private organizations in various countries including the Infocomm Development Authority of Singapore (IDA), the Inland Revenue Authority of Singapore (IRAS), Siemens, Capgemini, ING Netherlands and Gemeente Groningen. Apart from being a regular presenter at prestigious international conferences, findings from Eric's research has also been published in leading academic journals such as Information Systems Research (ISR), Journal of the American Society for Information Science and Technology (JASIST), the European Journal of Information Systems (EJIS) and Decision Support Systems (DSS) among others. Eric currently serves as an Associate Editor for Internet Research (IntR) and a Guest Editor of the Internet Research Special Issue on the Sharing Economy.

    Jie Mein Goh is an Assistant Professor of MIS at the Beedie School of Business, Simon Fraser University. Previously, she was faculty at IE Business School and earned her PhD at the Smith School of Business, University of Maryland College Park. Her research focuses on the impact and assimilation of information technology which has been published in journals such as MIS Quarterly and Information Systems Research.

    Feng Yang received the Ph.D. degree in Management Science and Engineering from the University of Science and Technology of China (USTC). He is currently a Professor and the Associate Dean of the School of Management, USTC. His research interests include DEA, production and operations management, and supply chain management. He has published > 50 SCI/SSCI papers, including in European Journal of Operational Research, International Journal of Production Research, Annals of Operations Research.

    Matthew K.O. Lee is the Professor of Information Systems & E-Commerce at the College of Business, City University of Hong Kong (CityU). Concurrently, he directs the University's Communication and Public Relations Office. Professor Lee's publications in the information systems and electronic commerce areas include a book as well as over one hundred refereed articles in international journals, conference proceedings, and research textbooks. He is the Principal Investigator of a number of CERG grants and has published in leading journals in his field (such as MIS Quarterly, Journal of MIS, Communications of the ACM, International Journal of Electronic Commerce, Decision Support Systems, Information & Management, and the Journal of International Business Studies). His work has received numerous citations in the SCCI/SCI database and Google Scholar. Professor Lee has served as Associate Editor and Area Editor of the Journal of Electronic Commerce and Applications (Elsivier Science) and the International Journal of Information Policy and Law (Inderscience) and served on the editorial board of the Information Systems Journal (Blackwell Scientific). He has also served as a special Associate Editor for MIS Quarterly.

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