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Customers' Perceptions of Online Retailing Service Quality and Their Satisfaction
Customers' Perceptions of Online Retailing Service Quality and Their Satisfaction
Customers' Perceptions of Online Retailing Service Quality and Their Satisfaction
Perceptions of
Customers’ perceptions of online online retailing
retailing service quality and their service quality
satisfaction
817
Minjoon Jun
Department of Management (MSC 3DJ), Received March 2003
College of Business Administration and Economics, New Mexico State University, Revised September 2003
Las Cruces, New Mexico, USA
Zhilin Yang
Department of Marketing, City University of Hong Kong, Kowloon,
Hong Kong, and
DaeSoo Kim
Department of Management, College of Business Administration,
Marquette University, Milwaukee, Wisconsin, USA
Introduction
As the online retail industry entered the shakeout stage in early 2000, many online
retailers have capitulated, merged with other firms, or resorted to downsizing as a
survival strategy. According to one report (www.webmergers.com, 2003), since
January 2000, nearly 900 US online firms have shut down and 31 percent of those firms
were online retailers. In addition to other factors, such as stiff competition among rivals
and entrenched customer shopping habits, failure of online retailers is primarily due to
poor quality services rendered to their customers (Zeithaml, 2002).
To survive in fierce industry competition, many practitioners and academicians in
this field have recently focused on how to improve online services to attract potential
customers and on how to retain current customers. Zeithaml (2002) has emphasized
that companies should focus on online service encompassing all cues and encounters International Journal of Quality &
that occur before, during, and after the transactions. Of course, if properly utilized, the Reliability Management
Vol. 21 No. 8, 2004
Internet can definitely be a powerful tool to increase overall service offerings (Griff and pp. 817-840
Palmer, 1999) and to provide online customers with a variety of benefits such as, q Emerald Group Publishing Limited
0265-671X
convenience of ordering products/services, instantaneous checking of the availability DOI 10.1108/02656710410551728
IJQRM of product/service, simple finding of competitive prices, and making informed
21,8 purchasing decisions.
Thus, to expand loyal customer base and improve profitability, it is crucial for
online retailers to understand in depth what online customers perceive to be the key
dimensions of service quality and what impacts the identified dimensions have on
customers’ satisfaction. Unfortunately, while numerous studies have examined such
818 issues in the context of traditional service, relatively little research has empirically
addressed such issues in the online retailing environment.
The specific objectives of this research were to:
.
identify key underlying dimensions of online retailing service quality as
perceived by online customers;
.
assess the relationships between the service quality dimensions identified earlier
and the online customers’ perceptions of overall service quality;
.
examine the relationships between the service quality dimensions and the online
customers’ overall satisfaction; and
.
measure the relationship between online customers’ perceived overall service
quality and their level of satisfaction.
This paper discusses relevant literature and research questions, followed by research
method, analyses and results, discussion and conclusions, and limitations and future
directions.
Research method
Measures
For this research, the authors initially developed 51 scale items based on the relevant
literature review. Of those, two items were to measure two outcome variables, such as
overall service quality and satisfaction, and the remainder were to assess online
systems quality and customer service quality. The authors adopted and modified
IJQRM several dimensions of SERVQUAL proposed by Parasuraman et al. (1985, 1988), such
21,8 as reliability, responsiveness, and credibility, to fit the setting of online retailing.
A pretest of the questionnaire was conducted to assess the content validity of
measurement scales. Content validity can be evaluated by a panel of persons,
sometimes experts, who judge whether a scale logically appears to reflect accurately
what it purports to measure (Zikmund, 1991). Four academicians, whose fields are
824 related to the areas of service quality, e-commerce, and information technology,
reviewed the questionnaire draft. Based on their suggestions, ten scale items were
reworded because they had ambiguous terms and nine, measuring three service quality
attributes such as competence, courtesy, and tangibles, were deleted because they were
not directly related to online service quality. Cox and Dale (2001) also argued that these
three constructs were primarily concerned with the interpersonal encounters between
employees and customers, and for the most part, irrelevant for measuring service
quality in the Web site experience. The length of the questionnaire was another
consideration in excluding the scales items pertaining to the three quality dimensions.
The finalized survey questionnaire consisted of 42 scale items: the first 40 items
were to measure the consumers’ perceptions of online service quality regarding their
most recent purchasing experiences; the remaining two items were to assess
customers’ perceived overall service quality and their satisfaction, respectively. The
first 40 items were related to six dimensions of online systems quality (e.g. content,
ease of use, accuracy, aesthetics, timeliness, and convenience) as well as seven
dimensions of online customer service quality (e.g. reliability, responsiveness,
credibility, security, access, communication, and understanding the customer). The
respondents were requested to select the response that best indicates their experiences
and perceptions on each statement, using a five-point Likert scale, where 1 = strongly
disagree, 2 = disagree, 3 = neutral, 4 = agree, and 5 = strongly agree. Each question
also allowed the respondents to check “not applicable” if necessary.
For this research, the authors categorized the respondents into three groups by
asking them to select one of the following three options: over the past 12 months:
(1) I have selected and purchased at least one product/service over the Internet
(online customers group).
(2) I have searched for product/service information over the Internet but have not
purchased a product/service (information searchers group).
(3) I have never used the Internet or used the Internet for purposes other than
product/service information search (e.g. e-mail) or purchase (“others” group).
Participants
The respondents were:
.
Full- and part-time MBA and executive MBA students, and undergraduate
students majoring in business administration at two major universities, each
located in the Southwest and the Midwest region of the USA.
. Members of the Institute for Supply Management (ISM) local chapter in the
Southwest region of the USA and those of the American Society for Quality
Control (ASQC) local chapter in the Midwest region of the USA.
The selection of subjects was deemed to be appropriate for the following four reasons. Perceptions of
First, the majority of Internet users are technical professionals and university students online retailing
(Pitkow and Kehoe, 1996). Second, students are among the most active online buyers
and thus their Internet and actual purchasing experiences qualify them as a proper service quality
sample of online shopping research (Yoo and Donthu, 2001). Third, students and
non-students do not differ significantly in their quality/reliability perceptions (Peterson
and Jolibert, 1995). Finally, the student and professionals who responded to the present 825
survey indicated that they purchased a variety of products or services, such as
books/magazines, leisure travel, CD/music, computer hardware, and computer
software, which are similar to the items purchased by general online shoppers
participating in prior studies such as that of Fenech and O’Cass (2001) and the UCLA
Center for Communication Policy (2003).
Gender (n ¼ 228)
Male 139 61.0
Female 89 39.0
Education (n ¼ 227)
High School or lower 3 1.3
Some College 81 35.7
College graduate 63 27.8
Graduate School 80 35.2
Age (n ¼ 222)
16-24 99 44.6
25-34 66 29.7
35-44 33 14.9
45-54 14 6.3
55-64 8 3.6
65 or over 2 0.9
On average, how often do you use the Internet for
information search, online shopping, or other
purposes? (n ¼ 228)
Once a month 5 2.2
Once a week 22 9.6
2-5 times a week 73 32.0
1-4 times a day 91 39.9
5-8 times a day 18 7.9
9 times a day 19 8.4
Classification of the respondents based on purchase
types (n ¼ 228)
Online purchaser (student 58; professional 79) 137 60.1 Table I.
Non-online purchaser 91 39.9 Profile of respondents
IJQRM respondents, approximately 60 percent (137) were online customers and the remaining
21,8 40 percent (91) represented non-online customers (a combination of the information
searchers and “others” groups). As for the age group, 45 percent of the respondents
were in the range of 16-24; 30 percent, 25-34; 15 percent, 35-44; and 11 percent, 45 years
or more. In terms of the average frequency of Internet usage, 40 percent of the
respondents had accessed the Internet from one to four times a day; 32 percent, two to
826 five times a week; 16 percent, five times or more a day; 10 percent, once a week; and 2
percent, once a month.
Since this study focused on online customers’ perceptions of online retailers’ service
quality, only the responses from the 137 online customers were utilized for the analysis
of this study. Of the 137, 58 were students and the remaining 79 were professionals. To
ascertain whether there are any perceived differences between the student and
professional groups regarding the survey questionnaire items, a Multivariate Analysis
of Variance (MANOVA) analysis and subsequently a series of t-tests were performed
on the data collected from the two groups of online customers. The MANOVA results
indicated that there was a highly significant agreement between the two groups in
their responses to the scale items (Wilks’ Lambda ¼ 0:063, F ¼ 0:492, p ¼ 0:836). The
post hoc t-test results supported this finding, showing that there was a significant
disagreement between the two groups on only three out of total 42 scale items. These
results indicated that the responses from the two groups could be merged into one
dataset and utilized for subsequent analyses.
Reliable/prompt responses 0.92 The quantity and quality of the product/service I 0.82 0.09 0.14 0.00 0.09 2 0.01
received was exactly the same as that I ordered
The product/service I ordered was delivered to me 0.79 20.02 0.22 0.02 0.15 2 0.05
within the time promised by the online retailer
The billing process was accurately handled and its 0.77 0.13 0.19 0.11 0.20 2 0.04
records were kept accurately
The online retailer responded to my inquiry promptly 0.75 0.21 0.19 0.24 0.02 0.12
When the online retailer promised to e-mail or call me 0.70 0.24 0.22 0.21 0.15 0.04
by a certain time, it did so
The system of the Web site rapidly retrieved the 0.59 0.28 0.20 0.23 0.11 0.05
information I requested
Access 0.78 The Web site showed its street and e-mail addresses, 0.04 0.74 20.05 0.06 0.23 0.24
and telephone and fax numbers
If I want to, I could easily contact a customer service 0.17 0.74 0.12 0.10 0.17 0.06
representative over the telephone
The online retailer offered multiple ordering options 0.30 0.72 0.29 20.01 0.03 2 0.11
such as telephone or mail options
For more information, I could turn to the online 0.12 0.58 0.08 0.24 20.22 0.04
retailer’s chat rooms, bulletin boards, or others
Ease of use 0.82 The Web site address was easy to remember 0.21 0.09 0.78 0.05 0.16 0.04
The organization and structure of online catalogs were 0.26 0.13 0.77 0.17 0.07 0.02
logical and easy to follow
All the terms and conditions (e.g. payment, warranty, 0.31 0.01 0.61 0.34 0.08 0.08
return policies) were easy to read/understand
The contents in the Web site were easy to understand 0.29 0.43 0.60 0.08 0.14 0.00
(continued)
consumers’ perceived
service quality
online retailing
827
Table II.
Perceptions of
21,8
828
Table II.
IJQRM
Cronbach Component
Dimensions alpha Items 1 2 3 4 5 6
Attentiveness 0.73 The online retailer gave me personalized attention 0.10 0.12 0.06 0.84 0.21 0.07
The Web site had a message area for customer 0.07 0.31 0.22 0.63 0.14 20.08
questions and comments
I received a personal “thank you” note via e-mail or 0.28 20.01 0.18 0.61 20.02 0.24
other media after I placed an order
Security 0.77 I felt secure in providing personal information for 0.21 0.07 0.21 0.19 0.79 0.09
online purchase
I felt the risk associated with online transactions was 0.25 0.12 0.12 0.11 0.79 0.05
low
Credibility 0.59 The Web site showed how long the online retailer has 2 0.14 0.29 0.09 20.05 20.02 0.80
been in this online business
I received special rewards and discounts as promised 0.13 20.07 20.01 0.21 0.14 0.75
from doing business with the online retailer
Percentage of variance explained by each dimension 18.85 12.27 11.54 9.34 7.66 6.63
(total 66.28 percent)
Notes: Extraction method: Principal Component Analysis; Rotation method: varimax with Kaiser normalization
that all the scales, except the credibility dimension, had relatively high reliability and Perceptions of
were suitable for further analysis. The reliability of the credibility dimension, 0.59, was online retailing
deemed relatively low but acceptable for the exploratory nature of the present study.
The first factor, reliable/prompt responses, accounted for the largest proportion service quality
(18.9 percent) of the total explained variance and was considered the most important.
This factor was defined by six scale items and was primarily related to the concept of
providing reliable, prompt, and timely services to customers. The second factor, access, 829
explained 12.3 percent of the variance and was constructed by four scale items,
including the availability of a company’s street and e-mail addresses, and telephone
and fax numbers, and the accessibility of service representatives. The third factor, ease
of use, accounted for 11.5 percent of the variance and comprises four scale items which
are primarily associated with well-organized online catalogs, concise contents, and
easy to understand terms and conditions.
The fourth factor, attentiveness, explained 9.3 percent of the variance and consisted
of three items, including the provision of personalized attention to customers and the
availability of message areas on the Web sites to handle customers’ individual
questions and comments. The fifth factor, security, accounted for 7.7 percent of the
variance and comprises two scale items, such as customers’ secure feelings in
providing personal information and customers’ perceptions of low risks associated
with online purchases. The last sixth factor, credibility, represented 6.6 percent of the
variance and was defined by two items, for example, introducing an online retailer’s
business history on the Web site.
Regression analysis
The second and third research questions were concerned with assessing the impacts of
the six online retailing service quality dimensions on customers’ perceived overall
service quality and their satisfaction, respectively. Separate regression analyses were
performed for each of the two dependent variables, “customers’ overall service quality”
and “customers’ satisfaction”. The six factors previously identified by factor analysis
were entered as independent variables. In order to control the effects of three
demographic variables, such as age, gender, and educational background, these
variables were also included as independent variables in the two regression equations.
The overall model fit for each regression equation was assessed by F statistics. The
regression models for overall service quality and satisfaction were both statistically
significant at p , 0:001 (see Tables III and IV).
Correlation analysis
The final research question addressed the issue of whether there is a positive
relationship between customers’ perceived overall service quality and their
satisfaction. To answer this question, the correlation analysis was performed
between overall service quality and satisfaction and the analysis result indicated that
there was a statistically significant and positive association between the two variables
(the correlation coefficient was 0.77, p , 0:01).
Discussion
Service quality dimensions
The first issue addressed in this study was what online customers perceive as the key
dimensions of service quality in online retailing. The analysis identified a total of six
key service quality dimensions: reliable/prompt responses; access; ease of use;
attentiveness; security; and credibility. These dimensions, except the ease of use
dimension, share in their meanings many common aspects with those service quality
determinants derived within the context of traditional, offline service industries by
prior research (e.g. Parasuraman et al., 1985, 1988). On the other hand, all six
833
Traditional vs online service quality dimensions
The comparisons between SERVQUAL’s traditional service quality dimensions with
those of online service quality uncovered by the present study are presented in Table V.
Four of the five traditional service quality dimensions, such as reliability,
responsiveness, assurance, and empathy, were also considered important by online
customers, as indicated on Table V. First, the two traditional service quality
dimensions, responsiveness and reliability, were combined into one of the online
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