Would compensation be necessary? The importance of service recovery strategy in e-retail delivery problems
International Journal of Productivity and Performance Management
; 72(5):1286-1303, 2023.
Article
in English
| ProQuest Central | ID: covidwho-2320748
ABSTRACT
PurposeThis study examines the different effects of service recovery strategies on customers' future intentions when online shoppers were experiencing delivery failures. Two types of problem severity are evaluated wrong-product delivery (issues with the product quality or quantity) and late delivery. This study also investigates the impact of service criticality on the relationship between service recovery strategies and customers' future intentions.Design/methodology/approachThis study employs experimental research with 123 online shoppers as participants. Following the results, a subsequent test is conducted to examine the effect of participants' demographics on future intentions. Finally, the current study elaborates the findings using qualitative research, interviewing both sides impacted by the service failures online shoppers and e-retail managers.FindingsThe findings show that complementing product replacement with monetary compensation is the most effective strategy to improve repurchase intention after a dissatisfaction moment. This effect is indifferent to service criticality and severity. Age influences the participants' repurchase intentions, in which younger people are less tolerant of service failures. In contrast, gender and education level do not provide any differences. To prevent delivery failures, managers participating in this study suggest several best practices regarding systems and infrastructure, people and coordination and collaboration with logistics partners.Research limitations/implicationsThe study mainly examines a limited type of service and service failures. Further studies are encouraged to expand the variables and scenarios, as well as to employ more distinctive methods, to enrich the findings related to recovery strategy in the e-commerce industry.Practical implicationsGiven proper compensation, service failure could create momentum for online retailers to boost customer loyalty. This study suggests that managers design the most effective service recovery to win customers back to the business.Originality/valueThis paper enriches the literature related to a service recovery strategy, particularly within the online shopping context.
Business And Economics--Management; Service failure; Delivery problems; Service recovery; Future intentions; Online retail; Supply chain management; Customer services; Customer satisfaction; Internet; Failure; Demographics; Product returns; Recovery; Operations management; Shopping; Electronic commerce; Order processing; COVID-19; Customers; Brand loyalty; Compensation; Managers; Consumers; Order picking; Hypotheses; Pandemics; Emerging markets; Retail stores; Best practice; Quality of service; Logistics; Coronaviruses; Southeast Asia; Indonesia; 45411:Electronic Shopping and Mail-Order Houses
Full text:
Available
Collection:
Databases of international organizations
Database:
ProQuest Central
Language:
English
Journal:
International Journal of Productivity and Performance Management
Year:
2023
Document Type:
Article
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