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E-tailer׳s return policy, consumer׳s perception of return policy fairness and purchase intention
Abstract
While e-commerce is growing, returns are proving to be a major problem for e-tailers (i.e. internet retailers). We argue that e-tailers׳ return policies play a strategic influence on consumer behavior. Specifically, we focus on the effect of return depth - full return policy (FRP) vs. partial return policy (PRP) – on consumer׳s perceived fairness of return policy and purchase intention. Using a structural equation model (SEM), we empirically show that an e-tailer׳s return depth has a positive influence on the consumer׳s perceived fairness of the return policy and purchase intention. Further, e-tailer׳ competition and its reputation significantly moderate the relationships between the return policy depth and the perception of the return policy׳s fairness and purchase intention. Finally, we discuss the theoretical and managerial implications of our results.
... Companies are interested in finding new ways to craft return policies that improve their salvage capabilities and reduce the number of returns, while also increasing customer satisfaction through innovative 'try-then-buy' strategies (Nageswaran et al., 2020;Rokonuzzaman et al., 2021). Researchers have focused much of their efforts on understanding how return policies impact consumer purchasing and return behavior , consumer trust (Oghazi et al., 2018), consumer perception of return policy fairness (Pei et al., 2014), and customer satisfaction (Radhi & Zhang, 2019). Other studies have focused on how lenient return policies impact firm economic factors, such as profit (Chaleshtari et al., 2022) or sales (Radhi & Zhang, 2019). ...
... Furthermore, existing research primarily examines return leniency as an independent variable, assessing its impact on consumer purchase behavior and return behavior, and seller profit (Chaleshtari et al., 2022;Janakiraman et al., 2016;Pei et al., 2014). For example, research has shown that lenient return policies are effectively training customers to view purchases as temporary, with the final purchase decision occurring after the item has been purchased (Robertson et al., 2020). ...
... Return leniency was operationalized based on a store's willingness to accept returns and exchanges, as well as the time frame within which these acceptances occur. This is consistent with the measurement of return policy in the existing literature Pei et al., 2014). All aspects of leniency were verified by the authors by reading the raw text of shop return policies to identify text that specifically outlined the procedures, scope, and timelines of shop returns. ...
As eCommerce has become widespread, the challenge of successfully navigating the returns process has grown perilous. The product returns issue is even more difficult for microenterprises that sell unique or custom products with fewer resources. The authors examined the impact of the antecedents of return policy leniency, specifically economic and social success factors. Using a web crawler over a 24-week period, the authors collected and analyzed data for a sample of 781 shops from Etsy, an eCommerce platform. Results indicate that the well-studied factor of sales, in addition to a new social factor – community dialogue – impacts an Etsy shop’s return policy leniency.
... Janakiraman et al. [22] argued that retailers could increase the restrictiveness (refund, time, scope, etc.) of return management practices (RMPs) to reduce returns. In terms of restrictiveness on refunds, previous literature focuses on partial refunds (see [23][24][25][26][27][28][29]) or no refund [30], which may not be suitable for online returns. Online consumers cannot touch products before purchase, despite tactile information being crucial for consumers to evaluate products and make a right purchase decision [31]. ...
... Previous studies on the positive outcomes of restrictive RMPs focused on restocking fees and found that such fees can recoup the cost of handling returns for e-retailers [51] and increase the average value of orders and purchased items [23]. Researchers also pointed out that restrictive RMPs may cause side effects such as fewer sales [13,28] and consumer turnover [24]. Although the prior literature examined these positive and negative outcomes of restrictive RMPs, more research is still needed on how different levels of restrictiveness are associated with consumers' important responses. ...
... As the use of return credits essentially amounts to introducing a restrictive RMP, consumers may discontinue repurchasing from shopping sites applying return credits. Pei et al. [24] found that consumers show a stronger purchase intention in generous refund policy than in restrictive refund policy contexts. Röllecke et al. [13] suggested that restrictive RMPs may reduce returns as well as repurchases. ...
Massive ecommerce returns incur considerable costs for e-retailers, erode their competitiveness and make their product returns management complex and difficult. Reducing returns can help e-retailers mitigate these negative consequences. This article focuses on ecommerce returns due to satisfaction-related reasons, the most common reasons for ecommerce returns, and studied the use of return credits (a maximum free returns amount) to reduce these kinds of returns. This novel approach is different from full or partial return policy documented in existing literature. This article also studied the side effects of using return credits. A one-factor (credit amount: high vs. low) between-subject scenario experiment was conducted. ANOVA was used to test hypotheses. The results revealed that using return credits can significantly deter returns, while the high and low credit amount have a similar effect on deterring returns. Moreover, the high credit amount leads to weaker side effects than the low amount. These findings can help e-retailers decide whether to introduce return credits to manage returns, and help them design their return credits.
... Product returns and customer reviews Product returns in the online retailing industry received great attention in the literature, as they play a prominent role from both the economic and the reputation perspective [7]. Since the flow of returned products is strictly connected to the return policies in place, several authors analyzed how less or more lenient policies can influence customer satisfaction [26,27], sales [28], and profit [6,[29][30][31]. Other works, instead, investigated the mechanisms to decrease the uncertainty affecting the purchasing process, such as online forums [32] or the use of online product inspection technologies [33], given that a key driver to reduce the amount of returned products is the matching between the actual product features and the customer expectations [34]. ...
... Fourth, the table shows that a significant number of novel return reasons play indeed a relevant role, being included in the set of causes used by the company with third-party sellers. This achievement confirms the need of making use of a more Table 6 Return causes extracted with LDA-based topic modelling (rows , currently available to customers (rows [21][22][23][24][25][26][27][28][29][30][31][32], and used with third-party sellers for prepaid returns (checked rows in the last column) ...
Product return is a common phenomenon in the online retailing industry and entails several inconveniences for both the seller, who incurs in high costs for restocking the returned goods, and the customer, who has to deal with product re-shipping. In this paper, we outline a data-driven approach, based on Natural Language Processing, in which a broad corpus of customer reviews of an online retailer is exploited with the aim of shaping the main causes of product returns. In particular, a variety of topic modeling techniques represented both by classic methods, given by LDA and variants, and more recent algorithms, i.e., BERTopic, were applied to identify the main return reasons across multiple product categories, and their outcomes were compared to select the best approach. The category-dependent sets of return causes inferred through topic modeling largely enrich the product-agnostic list of return reasons currently used on the e-commerce platform, and provide valuable information to the retailer who can devise ad-hoc strategies to mitigate the returns and, hence, the costs of the related logistic network.
... This drift is evident in both developing and developed nations. To achieve competitive excellence and motivate existing shoppers, e-tailers use various interactive tools and policies, including shipping options, timely delivery, error-free orders, prizes and bonus-points (Pei et al., 2014), pay-on-delivery mode of payment, 3D virtual try-on (VTO), and liberal return policies (Zhang et al., 2019;Oghazi et al., 2018). These innovative strategies influence consumer behavior by positively inclining consumers towards an online purchase, thereby affecting their overall decisionmaking process (Gupta & Ramachandran, 2021). ...
... 34). In the B2C context, the extant literature on service quality has focused on website quality (Parasuraman et al., 1985), reverse logistics (Pei et al., 2014;Oghazi et al., 2018), and PDSQ (Xing et al., 2010). E-PDSQ dimensions such as liberal return policy, delivery speed, shipment tracking, and billing accuracy are indispensable for online purchases (Xing et al., 2010). ...
This research uses self-determination theory to examine gamification, virtual-try-on technology (VTO), and e-logistics service quality(e-LSQ) as antecedents of customer satisfaction in the domain of online shopping. This research further examines customer satisfaction as predictor of repurchase intentions while theorizing Pay-on-delivery (POD) as a moderator between customer satisfaction and repurchase intention. Data were gathered using a self-administered questionnaire from online shoppers. The sample comprised of 634 respondents who had purchased products using VTO. The results confirmed VTO and e-LSQ as strong antecedents of customer satisfaction, which further leads to repurchase intention. Interestingly, gamification had insignificant influence on customer satisfaction. Further, POD moderated the relationship between customer satisfaction and repurchase intentions. This study is a preliminary attempt in the online context to evaluate POD and VTO as substantial factors stimulating online purchase using the SDT as a theoretical underpinning. A theoretical relationship among e-LSQ, VTO, and customer satisfaction is further demonstrated by the study.
... They may also wonder if they made the right choice, if they really need the product, or if they should have bought it at some other time. Despite being tedious, the goods return policy can be viewed as a way of reducing both the emotional and product dissonance of certain customers (Powers & Jack, 2013), by enhancing the perceived value experienced (Pei et al., 2014). The return policy can result in the development of trust, which in turn, reduces perceived risk (Rokonuzzaman et al., 2020) and translates to future purchase intention (Oghazi et al., 2018;Janakiraman et al., 2016). ...
... Several interesting findings were found. First, in contradiction with Powers and Jack (2013) and Pei et al. (2014), this study did not find a significant influence of liberal return policies on both emotional and product dissonance. Powers and Jack (2013) argue that return policy could result in increased trust and reduced perceived risk, which would further translate into future purchase. ...
Manuscript type: Research paper Research aims: The cost and frequency of purchased product return are of considerable concern to marketers and retailers. This paper examines the post-purchase cognitive states that influence product return and the drivers that cause cognitive dissonance. Design/Methodology/Approach: A total of 208 valid responses were collected and analysed using SPSS v.22 and SmartPLS 3.2.8 software. Research findings: The findings indicate that emotional dissonance and product dissonance were the main contributing factors determining product return frequency. Switching barriers, customer opportunism and customer attitude significantly affected the level of dissonance; the consideration of liberal return policies and customer expectations of product did not. Findings support the mediating hypothesis of emotional dissonance, and show that product dissonance significantly affects emotional dissonance. Importantly, emotional dissonance has a larger impact on product return frequency than product dissonance. Theoretical implications: This study expands upon the existing literature by providing valuable insight into understanding the external and internal factors contributing to cognitive dissonance and product return frequency. Importantly, the study contributes to the conceptualisation of the mediating role of emotional dissonance in consumer behaviour, particularly in the retail context. Practitioner/Policy implications: The findings are useful in assisting grocery marketers in designing and implementing effective customer retention strategies and loyalty programmes. Pairing of right perceptions about product quality, quantity and volume with cost would be effective to reduce emotional dissonance, and retailers could highlight exclusive product offerings to reduce product dissonance. Research limitation/Implication: Future studies could take into account the influences of demographic variables and various communication platforms which might cause differences in consumers’ product return behaviours. This study only presents the findings of a cross-sectional study. A longitudinal study could be conducted to compare consumers’ product return patterns and cognitive dissonance over a longer time frame.
... So that consumer trusts in the purchase due to the return ease and discount rate of a purchased product. Pei et al. (2014) studied consumers' perceptions of online retailers' return policies. They found that a retailer who adopts open return policies instead of restrictive return policies faces more customer purchase intention, higher confidence, and fairness. ...
... Products return guarantee is a factor that can increase purchase perception value and decrease perceived functional and financial risk of purchase (Li et al., 2019). Therefore, open return policies ensure consumers predict vendors' behavior when facing product return demand, so consumer perception of retailers' fairness builds trust and increases their purchase intention (Pei et al., 2014). According to research findings, there was not any significant relationship between UAE that differs from Iran and Iraq's markets. ...
Purpose
This study aims to examine the relationship between the risk-aversion level of return policies and customer trust in online shopping in three countries in the Middle East.
Design/methodology/approach
In the first step, the different types of return policies of online shoppers and the risk-aversion level were determined by surveying 18 online shops and interviewing 21 customers. The risk-aversion level of these policies was found in the experts’ panel. In the second step, the experiences of 573 consumers when facing seller’s return messages, perceived risk and consumer trust in three countries (UAE, Iraq and Iran) were collected through a questionnaire. Finally, the gathered data were analyzed using structural equation modeling.
Findings
The results indicated that risk-averse return policies taken by online vendors led to lower consumer trust. Moreover, customer perceived risk mediated the relationship between return policies’ risk-aversion level and trust in Iraq and Iran. At the same time, there was no significant association between return policies and perceived risk in UAE. In addition, perceived risk wholly mediated the relationship between return policies’ risk aversion and trust in vendors in Iran, but this role was minor in Iraq.
Originality/value
Among the intercultural studies, especially in the Middle East, this is one of the first studies based on the marketing and sales management in an online shopper’s supply chain. Moreover, the investigation of return policies in online commerce is another innovative aspect of the present paper.
... For the market condition, the increased demand for fast and inexpensive product deliveries and returns has resulted in high operating costs for the company (Dablanc et al., 2017;Pei et al., 2014). Thus, companies are highly motivated to streamline their logistics operations. ...
... When the number of ODs doubles, the average operational cost drops from 749.9 to 743.8. Considering the high operating costs for handling product delivery and returns (Dablanc et al., 2017;Pei et al., 2014), the utilization of ODs implies a potential benefit of different magnitude for simultaneous pickups and deliveries; thus, companies who plan to involve ODs must carefully design a strategy that attracts ODs. ...
This research addresses the Vehicle Routing Problem with Simultaneous Pickup and Delivery and Occasional Drivers (VRPSPDOD), which is inspired from the importance of addressing product returns and the emerging notion of involving available crowds to perform pickup and delivery activities in exchange for some compensation. At the depot, a set of regular vehicles is available to deliver and/or pick up customers’ goods. A set of occasional drivers, each defined by their origin, destination, and flexibility, is also able to help serve the customers. The objective of VRPSPDOD is to minimize the total traveling cost of operating regular vehicles and total compensation paid to employed occasional drivers. We cast the problem into a mixed integer linear programming model and propose a simulated annealing (SA) heuristic with a mathematical programming-based construction heuristic to solve newly generated VRPSPDOD benchmark instances. The proposed SA incorporates a set of neighborhood operators specifically designed to address the existence of regular vehicles and occasional drivers. Extensive computational experiments show that the proposed SA obtains comparable results with the state-of-the-art algorithms for solving VRPSPD benchmark instances – i.e., the special case of VRPSPDOD – and outperforms the off-the-shelf exact solver – i.e., CPLEX – in terms of solution quality and computational time for solving VRPSPDOD benchmark instances. Lastly, sensitivity analyses are presented to understand the impact of various OD parameters on the objective value of VRPSPDOD and to derive insightful managerial insights.
... Finally, on the basis of inoculation theory, our research discovered a new insight into lenient post-sale services (lenient return and refund policy) that contributes to existing knowledge in return policy or money-back guarantee (MBG) research. Existing return policy research has highlighted the two major roles of return policy: Lenient return policies or MBGs can be a signal of product quality and can thus increase consumers' purchase intentions or behaviors (Chen & Chen, 2016;Lantz & Hjort, 2013;Moorthy & Srinivasan, 1995;Pei et al., 2014), and lenient return policies are a key recovery strategy that can solve the problem of dissatisfied consumers (Mollenkopf et al., 2007;Röllecke et al., 2018). However, from the perspective of inoculation theory, an emphasis on a lenient return and refund policy can also be viewed as a preemptive counterargument against product fit uncertainty during the post-sale stage. ...
Consumers’ worse-than-expected disconfirmation in ecommerce settings leads to several negative consequences, such as product returns and sales reductions. In contrast to common remedy strategies, a novel, proactive strategy, consumer inoculation, was employed in our study to alleviate consumers’ disconfirmation responses. A two-phase (prepurchase and postsale) longitudinal experiment was conducted to examine the effects of prepurchase inoculation and booster inoculation on consumers’ disconfirmation responses. A chi-square test and analysis of variance (ANOVA) were used to analyze the data. The research findings showed that consumers who received the booster inoculation exhibited significantly weaker disconfirmation responses (less dissatisfaction, fewer return intentions, and weaker negative word-of-mouth intentions). Our research can provide meaningful implications for inoculation research and practical value for ecommerce companies to reduce postsale costs.
... This topic covers the online or offline infrastructure of the apparel providers, which is not a key characteristic of the product but is still essential [34]. Finally, Topic 6 is named return policy as it comprises words that point out towards returns namely "return, back, ordered, usually, policy, easy, try" [51]. ...
Online reviews help customers make an informed purchasing decision, which is important for experience goods. The objective of this paper is to rank online retailers based on apparel quality evaluative criteria. For this, a multi-step methodology is adopted. Initially, topic modeling through Latent Dirichlet Allocation (LDA) is applied on the accessed women apparel dataset for extracting evaluative criteria. LDA resulted in criteria namely aesthetic, functionality, expressive, performance, extrinsic, and return policy. Moreover, a problem that online customers face while making a purchasing decision is to choose the best retailer from the abundant options. Thus, in this study, BWM (Best Worst Method) technique is utilized for calculating criteria weights and R-TOPSIS (Technique for Order Preference by Similarity to Ideal Solution) is utilized for obtaining ranks of online apparel retailers. Further, the validation of the ranking method is done through CODAS (Combinative Distance based Assessment) method. Some implications for researchers and practitioners are provided at the end.
... As shown in Appendix C, previous studies have empirically examined the underlying mechanism that may account for the differential effects of return policy leniency on customer patronage, but these studies are limited to fragmented evidence. For instance, Pei et al. (2014) conclude that return policy leniency increases customers' perceived fairness of online retailers and, subsequently, customer purchases. Oghazi et al. (2018) argue that return policy leniency fosters customer trust and thus increases customer purchases. ...
Global online retailers are struggling to handle product returns and increase customer patronage using return policy leniency, but research on how that happens and under what conditions remains unclear. This study examines the psychological process through which return policy leniency drives customer patronage across Western and Eastern cultures. Based on two surveys in the major Western (355 United States customers) and Eastern (258 Chinese customers) e-tail markets, results show that perceived control, perceived relatedness, and customer satisfaction fully mediate the effect of return policy leniency on customer patronage in Western culture. Perceived relatedness and customer satisfaction partially mediate the effect of return policy leniency on customer patronage in Eastern culture. Moreover, novelty seeking negatively moderates the effect of return policy leniency on perceived control in Western culture, while collectivism negatively moderates the effect of return policy leniency on perceived relatedness in Eastern culture. This study enriches our understanding of customer psychological processes in responding to return policy leniency across different cultures.
... It has strong impact on customer confidence when making online purchases, which directly affects the bottom line profits of the firms. To address this issue, numerous authors, including Nguyen et al. (2018) Pei et al. (2014), Wang et al. (2019), and Yu & Kim (2019) have researched the procedures of reverse logistics. These procedures include returns preparation, returns options, refunds, and returns handling. ...
... When consumers find that the products do not meet their expectations, they will consider returning them. Despite that Consumer returns impose a cost on the online retailer, online retailers' return policies have a strategic impact on consumer behavior [56]. So, the online retailers still offer return service to attract consumers. ...
With the development of the Internet, consumers tend to go online shopping, while online reviews have become an important reference for consumers to make purchase decisions, and they contain reliable and rich information about products and needs that influence consumers' and companies' decisions. However, consumers are sometimes unable to accurately judge product quality through online reviews, resulting in the quality of the product not meeting the expectation of consumer. Then, consumers sometimes choose to return products and make negative reviews about the product, which can harm can damage the retailer's interests. To reduce the damage to profits, online retailers have adopted a return compensation policy. In this paper, we establish a two-stage model based on the retailer's return compensation policy. Meanwhile, considering the effects of customer returns and online reviews, we construct two scenarios with and without return compensation policies to compare the equilibrium results of the game in different scenarios, and to analyze the effects of online reviews and product mismatches on retailers' profits. The results indicate that: (1) return compensation compensates consumers for the loss of utility due to product mismatch, promotes positive consumer reviews of that product, and leads to an increase in both product sales and total profits. (2) Product mismatch is negatively associated with the number of positive reviews and positively associated with the number of negative reviews in the case where an online retailer offers return compensation.
... This is because consumers are forced to see the policies and conditions that apply, not only before returning goods but also before buying so that consumers understand the consequences. In line with research conducted by Pei et al. (2014), the process of handling product returns with clear policies and rules will not cause ongoing complaints from consumers because, even though consumers may experience accidental service failures, at least the process of complaints and returns goods do not go through a convoluted process and help is received from business management. ...
In today's digital business world, service failures are inevitable. Customers who have experienced service failures react to recovery efforts, such as compensation, return policy leniency, or the accessibility of customer service representatives provided by the seller, by making judgments of the fairness of such efforts. Leaks in recovery efforts, on the other hand, may lead to unethical consumer conduct, such as opportunistic behavior or complaints. These nefarious intents may have an impact on brand reputation and consumer purchase behavior. We explore the impact of consumer perceptions of service recovery, as well as consumer complaints and opportunistic intentions toward a company by using a quasi-experimental approach. The results of the structural equation model test are particularly valuable to online sellers, as they show that all aspects of justice are major predictors of complaint and opportunistic intentions. A significant implication of our research is that the practical meaning of the notion of justice may affect consumers' future repurchase behavior.
... From the online retailer's perspective, a generous return policy and efficient return processing can positively influence customer willingness to buy and create demand. For example, a 100 % money-back return policy increases consumer perception of return policy fairness Stöcker et al., 2021) and, in turn, strengthens purchase intention (Pei et al., 2014). Janakiraman et al. (2016) showed that a lenient return policy increased the purchase volume more than the return rate. ...
While live streaming commerce enriches product presentation and expands the scope for interaction compared to traditional online shopping, this retailing approach often leads to spontaneous purchases. Hence, the hurdle for returns is comparatively low, and this is particularly the case with fashion items. We have identified eleven measures to avoid returns from the literature and an evaluation of fifty-seven experienced users. A sample of 509 Chinese participants was analysed, and their influence on customer satisfaction was evaluated using the Kano model. Truthful product description, detailed product information, live interaction, and personal customer service during the post-live streaming stage are viewed as valid performance measures, and the absence of a detailed description of the shipping and delivery times and return policy is a basic source of dissatisfaction. Our recommendations to platforms and streamers include presenting detailed product information during live streaming, refraining from deceptive advertising, and providing sufficient staff for after-sales service.
... This study is triggering the point that online e-tailers must carefully manage product returns and offer lenient product return policies which impact on young buyers' intention to make a repurchase significantly. With the continuous growth of e-commerce, it has become pivotal for e-tailers to offer a full product return policy, exchange the product without any additional charges at full amount or return the product at the physical store to reduce the risk associated, i.e. damaged or defective products with the purchase (Li et al., 2013;Pei et al., 2014;Bernon et al., 2016). It is essential to design young buyer-centric return policies such as customers do not need to wait longer during the product return process, and there should be service recovery responsiveness that provides a positive pre-and postsale customer experience, which creates the repurchase intention and drives ultimately business growth. ...
Purpose
With the growth in online purchasing, the return of distressed shipments also increased. The return experience of the online shopper has a huge impact on their next purchase decision-making. This explanatory research aims to identify and empirically explain factors related to the online buyer’s return experience that influence the repurchase intention of young buyers.
Design/methodology/approach
Primary data were collected from 235 active online young buyers who have experienced returning the goods through a structured questionnaire. Structural equation modeling is used for analyzing the data.
Findings
This study reveals that an online return policy leniency strongly supports service recovery quality, expected return convenience, buyer trust and satisfaction, which lead to repurchase intentions. Moreover, return satisfaction positively impacts repurchase intention while mediating young buyer trust.
Originality/value
This study is one of the few relevant pieces of research that would benefit e-tailers to improve their product return policy and compel young buyers’ intention to make a repeat purchase.
... Purchase intention I would be willing to purchase the product. Pei et al. (2014) I would consider buying the product. ...
In practice, many prominent electronic retailers (e-tailers) offer consumers both self-run (i.e., reselling mode) and third-party (i.e., agency selling mode) sales channels. However, previous research has not explained how consumers choose between these two channels and the potential moderating factors of that choice. To narrow this gap in the literature, we conducted a cognitive neuroscience-based experiment and a scenario-based experiment to investigate how the consumers' purchase intention is impacted by e-commerce sales channels (self-run vs. third-party) and review volume (low vs. high). As per the results of the experiments, the participants were more likely to buy from the self-run (vs. third-party) channel when the review volume was low; however, they did not differ in their purchase intention between the self-run and third-party channels when the review volume was high (Studies 1 and 2). The neuroscience data yielded similar findings: When the review volume was low, the self-run channel elicited more pronounced electroencephalography activity regarding the late positive potential (LPP) than the third-party channel; when the review volume was high, there was no difference in the LPP induced by the two sales channels (Study 1). In addition, the interaction effect between sales channel and review volume on purchase intention was mediated by perceived product quality (Study 2). Based on these findings, we discussed the theoretical and practical implications of the research.
... The research on return is mainly divided into original channel return and cross-channel return. Pei et al. [17] considered full return policy (FRP) and partial return policy (PRP), then used the structural equation model to verify that the return depth of the online retailer has a positive correlation with customers' perceived return policy fairness and purchase intention. Xu et al. [18] studied the impact of return cost, amount, and period on consumers' returns in the literature. ...
Advanced delivery and cross-channel return are new phenomena in Omni-channel marketing. This paper studies a dual-channel supply chain system composed of one online retailer, one physical store, and their ordinary manufacturer. It intends to explore the pricing decisions of retailers under four scenarios concerning the question whether deliver goods in advance and use cross-channel return. We analyze the impact of the operation costs of physical stores and the transportation costs of the online retailer on the above strategies, and with numerical examples, analyze the impact of consumers’ perceived value on the profits of each scenario. The results show that the default rate of consumers’ unpaid balance and the cross-channel return rate directly influences the online retailer’s strategy choice. The pricing of the physical store is related to the proportion of unpaid balance and return rate of the online retailer. Customers’ perceived value brought by advanced delivery leads to profit changes in supply chain members and is influenced by the online retailer’s cross-channel return strategy.
... Research suggests fairness "may be one of the most powerful sources of emotions in organizations" (Howard and Cordes 2010, p.411). Relatedly, organizational justice research has established an integrative approach across justice dimensions (i.e., distributive, procedural, and Thus, a focal variable of interest throughout our quantitative investigations is policy fairness, or employees' perceptions of the acceptability, reasonableness, or justness of an organization's policy (Pei, Paswan, and Yan 2014). Employment policies may aim to instill a sense of responsibility in employees to aid in CDB prevention, but these increased expectations of FLEs beyond their typical scope of work and without corresponding remuneration should decrease perceptions of policy fairness (Colquitt, Greenberg, and Zapata-Phelan 2005; Schepers and Van der Borgh 2020). ...
Recent disruptions, labor shortages, and fiscal pressures, especially in retail service environments, have necessitated and highlighted changes in the roles and responsibilities of frontline employees, often requiring them to enforce mask mandates and police customer deviant behavior (CDB). While extant work has investigated the impact of policing, or guardianship, for customers and firms, there has been limited examination regarding the policies themselves and the corresponding toll exacted upon frontline employees (FLEs) and their managers (FLMs). Thus, this phenomenon warranted an in-depth, multi-method investigation, including a full-scale qualitative exploration substantiated and extended via three experiments and a survey. The qualitative approach probes employees’ feelings about and identifies categories of CDB in retail service settings as well as develops a novel typology of guardianship policies (policy type x approach style). The subsequent studies empirically test the CDB guardianship typology in the context of a particularly detrimental type of CDB—shoplifting, while advancing understanding of firm-related (guardianship expectations), employee-related (trait anxiety) and job role-related (FLE vs FLM) contextual factors impacting perceptions of policy fairness and turnover intentions. The findings provide rich insights for practitioners and scholars by offering a novel guardianship typology and an extensive agenda for future research.
... Similarly, Nikbin et al.'s research (2011b) showed that the influence of distributive justice and interactional justice on repurchase intention are moderated by firm reputation. Moreover, a survey by Pei et al. (2014) demonstrated that the firm's reputation moderates the relationship between return policies and consumer purchase intention. ...
As technology develops, service users who utilize technology have increased along with the emergence of mobile phone application-based services such as social media, online games, and entertainment. However, technological developments are different from growth in the service sector. The RI service sector's productivity is relatively lower than other countries in ASEAN, where Indonesia is still struggling in the traditional service sector such as construction and trade. Digital marketing is one of the disruptive changes that significantly affect the image of a product. So the need for research on how effective strategies for the service sector are specifically for millennials. The purpose of this study was to determine the effect of social media and eWOM on millennial intentions to purchase online travel agent products and to analyze whether firm reputation moderates the influence of social media and eWOM on millennial intentions to purchase online travel agent products. Data collection was carried out using Google form on 270 millennials in Jabodetabek. Hierarchical regression analysis shows that social media and eWOM influence millennial intentions to purchase online travel agent products. Beside, firm reputation only moderates the influence of social media and eWOM on millennial intentions to purchase online travel agent products.
... Product returns and customer reviews Product returns in the online retailing industry received great attention in the literature, as they play a prominent role from both the economic and the reputation perspective [7]. Since the flow of returned products is strictly connected to the return policies in place, several authors analyzed how less or more lenient policies can influence customer satisfaction [26,27], sales [28], and profit [6,[29][30][31]. Other works, instead, investigated the mechanisms to decrease the uncertainty affecting the purchasing process, such as online forums [32] or the use of online product inspection technologies [33], given that a key driver to reduce the amount of returned products is the matching between the actual product features and the customer expectations [34]. ...
... ,Kim and Wansink (2012),Pei et al. (2014),Khouja et al. (2019), andCui et al. (2020).Suwelack and Krafft (2012) note there are significant differences in retailers' return policy terms.Davis et al. (1998), Heiman et al. (2001), and Janakiraman et al. (2016) each classify the return policies in terms of different restriction factors, such as time, money, and scope. Matthews and Persico ...
Many retailers offer full refunds in the matter of product returns, which further intensifies pervasive, increasing application of this option. While the return option stimulates the market demand via rectifying customers’ uncertainty regarding the value of products, it endures intense expenses to the retailer. Therefore, comparison of the full refund with the optimal refund strategy helps the retailers wisely decide whether to follow the commonly adhered strategy of full refund, or switch to the optimal refund strategy to alleviate the harms of the returns. To this end, we develop an analytical framework in this paper which can capture the impact of all major factors affecting the purchase and return behavior of customers. These factors, in addition to other commonly studied factors in the literature, include return leniency, and customers’ heterogeneity. Using this framework, we characterize the probability of a customer purchasing the product and the probabilities of keeping and returning it. These probabilities in turn characterize the retailer’s demand and return volume, which we use to address the optimal refund strategies of the retailers in various circumstances and specify the monetary outcomes of these strategies along with the outcomes of full refund. These results enable us the comparison between the two policies and decision making. Our analyses show under what circumstances the optimal return strategy has considerable benefit over the full refund policy. Plus, the analyses reveal the impact of various parameters on the benefit of refund strategy optimization.
... This dimension comprises consumer-initiated action triggered by needs, service or environment. In retail, a depiction of behavioral response can take the form of different behavioral patterns (Hjort et al., 2013), such as level of spending and shopping frequency (Xiao et al., 2018) or return behavior (Pei et al., 2014;Ahsan and Rahman, 2016). Consumer-initiated actions triggered by the unattended delivery service relate to word of mouth and willingness to pay (see Table 1). ...
Purpose
The success of last-mile delivery is dependent on consumer acceptance of such services, yet little is known about unattended delivery experience. This paper's purpose is to provide empirically based understanding of customer experience dimensions in unattended home delivery.
Design/methodology/approach
Using an engaged scholarship approach, this field study investigated nine households that actively used an unattended delivery service for a period of six to nine months. Empirical data were collected primarily from in-depth interviews.
Findings
The study demonstrates that unattended delivery experience is a multidimensional construct that comprises consumers' cognitive, emotional, behavioral, sensorial, physical and social responses to the service. The empirical evidence provides rich descriptions of each customer experience dimension, and the research offers a framework and propositions on unattended delivery experience.
Practical implications
The results guide and support managers in assessing and developing delivery services using a consumer-centric approach to enhance customer experience.
Originality/value
This research is one of the first to address unattended delivery experience by providing a comprehensive, empirically grounded framework. The results provide a foundation for future investigations of last-mile delivery experience dimensions.
... The theory of justice, which originated in social psychology, explains how individuals react to situations of conflict (Blodgett et al., 1997) and is particularly relevant to the study of customer behavior involving exchange relationships (Pei et al., 2014). Research in service recovery has used the theory of justice to understand what leads to customer satisfaction after the treatment of service failure (Ambrose et al., 2007;Tax et al., 1998). ...
Service failures are common, and the absence of an adequate response may increase switching intentions and customer exit. Thus, it is important to address the influence of customer satisfaction with complaint handling on switching intentions and customer exit. We tested hypotheses using data collected in two stages from a total of 821 customers who experienced service failure in 38 Brazilian gyms. The results indicate that perceptions of justice positively affect satisfaction with complaint handling, which reduces switching intention and customer exit. Moreover, failure severity is shown to increase switching intention and customer exit. Theoretical, method-=ological, and managerial implications are discussed.
... In addition to the above literature on returns, some studies explore the refund issue. A partial refund is optimal compared to a full refund [18] . An e-tailer's return depth (full return policy vs. partial return policy) positively influences consumers' perceived fairness of the return policy and purchase intention [19] . ...
In the direct sales model, the e-tailers sell fresh products to consumers in the online market and promise consumers a full-refund policy without return. Consumers are always concerned about the products’ freshness level before making the online fresh product purchase decision. Third-party logistics (3PL) providers will be motivated to exert a fresh-keeping effort to keep the fresh product at the optimum freshness level when offering consumers or e-tailers fresh-keeping services. Considering the fresh-keeping service provided by 3PL providers, to alleviate consumers’ concerns about the freshness level and encourage them to purchase fresh products, some e-tailers will purchase fresh-keeping services from 3PL providers and offer them to consumers for free. However, some e-tailers have stopped offering this service; they have offered consumers the opportunity to purchase fresh-keeping services. To explore an e-tailer’s optimal fresh-keeping strategy, we consider a market consisting of an e-tailer and a 3PL provider. Three alternative scenarios are discussed: scenario N: no fresh-keeping service; scenario C: some consumers voluntarily purchase fresh-keeping services, and scenario S: the e-tailer offers a complementary fresh-keeping service. We find that introducing a fresh-keeping service increases the retail price in scenario C when the coefficient of fresh-keeping cost is high and the unit fresh-keeping service fee is low, but that decreases in scenario S when the unit fresh-keeping service fee is low. Comparing the e-tailer’s equilibrium profits, we find that introducing a fresh-keeping service does not necessarily benefit the e-tailer. The coefficients of fresh-keeping costs and unit fresh-keeping service fees play a critical role in selecting the fresh-keeping strategy. Meanwhile, the 3PL provider is biased; specifically, the 3PL provider’s fresh-keeping effort is related to that of the policyholder.
... For retailers, of course, a full-refund policy can attract more customers to buy the product from the e-store. The cost of returning each unit of the product should be paid by either the retailer or the customer, which is very common in practice ( Pei, Paswan, & Yan, 2014 ). In order to encourage customers to place orders, some online retailers furnish free shipping. ...
This work considers an omnichannel retailer selling a product with market demand uncertainties to customers in different regions through an e-store and multiple brick-and-mortar stores. The retailer also manages online product returns by selecting appropriate return policies. A robust omnichannel pricing and ordering optimization model is proposed with two, i.e., a full-refund and a no-refund, return policies. The online demand and the offline demand depend on the prices of the e-store and the brick-and-mortar stores, where the online demand also depends on the refund of the e-store. A linearization technique is adopted to deal with nonlinearity of the model. A data-driven robust optimization approach is used to construct uncertainty sets based on available historical data using support vector clustering to handle demand uncertainties. Furthermore, the proposed model is transformed into an approximate mixed integer linear programming model which can be solved by using commercial software. An electronics retailer in China is used as a case study to illustrate the effectiveness and practicality of the proposed model and the solution method. A comparison with the box uncertainty set reveals that the data-driven uncertainty set is less conservative and performs better by obtaining higher profit for the retailer. Furthermore, sensitive analysis results indicate that return policies and the return rate of the product affect the optimal pricing and ordering decisions and the total profit.
Purpose
Researchers have examined the influence of the factors on reducing return rates in retailing over the years. However, the returns experience is often an overlooked way to drive customer engagement and repeat sales in the now ubiquitous omnichannel setting. The focus on returns prevention in existing research overshadows management’s need to understand better the comprehensive mechanics linking the customer in-store return experience with their repurchase actions. Recognizing the need to bridge different stages of the returns management process, this research aims to explore the facilitators and barriers of in-store return activities.
Design/methodology/approach
Analysis of customer corporate data from 5,339 returns at the retail level provides insights from the customer return experience. Expanding our theoretical understanding, a deductive research approach then examines how those factors impact customer repurchase intentions both online and at brick-and-mortar stores. Stage two of the study employs a scenario-based role-playing experiment with consumer respondents to test hypotheses derived from signaling theory and justice theory.
Findings
Results find that returns policy and loyalty program capabilities are essential in creating a positive customer in-store experience. Moreover, a return experience enhanced by frontline employee service can retain existing shoppers and drive additional store traffic, further stimulating retailer sales.
Originality/value
These findings refine our understanding of returns management in evolving omnichannel retailing and offer practical insights for retailers to manage customer relationships through in-store returns.
As an increasing number of people continue to shop on the internet, it's more important than ever to comprehend and investigate the service quality that customers demand from e-tailers. This research will contribute by analysing and synthesising findings from various strata of people in industrialised and developing countries, as well as bringing disparate research streams together to create a more consistent and integrated knowledge unit. The theoretical models and dimensions of e-service quality from selected papers in the literature are reviewed to incorporate the findings and identify the gaps and contradictions. Because the SERVQUAL model is a good way to measure service quality, this study will look at the impact of SERVQUAL dimensions such as reliability, assurance, tangibles, empathy, and responsiveness on consumers' online buying behaviour in the e-tailers segment. Moreover, it also intends to suggest solutions for service providers in the e-tailers segment to improve their service quality. Also, recommendations for future research are made.
Purpose
Compared to traditional (domestic) e-commerce consumers, cross-border electronic commerce (CBEC) consumers may face greater information asymmetry in the CBEC purchase process. Given this background, however, the literature has paid limited attention to the informational antecedents that influence consumers' perceptions of transaction costs and their CBEC purchase intentions. To fill this gap, this study integrates the elaboration likelihood model (ELM) and transaction cost theory (TCT) to develop a model for exploring how product (website informativeness, product diagnosticity and website interactivity as the central route) and external (country brand, website policy and vendor reputation as the peripheral route) informational antecedents affect consumers’ evaluations of transaction costs in terms of uncertainty and asset specificity and their CBEC purchase intentions.
Design/methodology/approach
This study employs a survey approach to validate the model with 766 Generation Z CBEC consumers based on judgment sampling. The partial least squares (PLS) technique is adopted for data analysis.
Findings
The results show that all the proposed central and peripheral informational antecedents reduce consumers’ perceptions of uncertainty and asset specificity, which in turn negatively influences their CBEC purchase intentions.
Originality/value
Through this investigation, this study increases our understanding of how product and external informational antecedents affect consumers’ evaluations of transaction costs, which subsequently determine their CBEC purchase decisions. This study offers theoretical contributions to existing CBEC research and has practical implications for CBEC organizations and managers.
Purpose
The purpose of this study is to identify individuals’ preferences for the information attributes of Airbnb, a representative peer-to-peer (P2P) accommodation platform. In the sharing economy, platforms are considered to be the principal intermediaries in supply and demand, and these platforms have distinctly different attributes from traditional accommodation reservation systems.
Design/methodology/approach
The present study used a choice experiment, which is a method for systematically identifying attributes’ preferences in the form of marginal willingness-to-pay (MWTP). Amazon Mechanical Turk, a crowdsourcing marketplace, was used for data collection, and 243 respondents ultimately participated in the survey.
Findings
Results showed that respondents’ choices were positively affected by the number of pictures of an accommodation, host experience, cancellation policy and local information but negatively affected by cost. Regarding MWTPs, host experience had the highest value (US40), photos (US10.92).
Originality/value
These study results could provide strategic guidance for guiding the development of P2P accommodation platforms by providing a prioritized list of preferred attributes for Airbnb.
The chapter aims at understanding the predictors of attitude and repurchase intention with online shopping in India by using signaling theory. This research validates shipment tracking, delivery speed, and product presentation as new predictors influencing attitude towards online purchase. It also validates trust as a mediator between attitude and repurchase intention. Data was collected through a self-administered and structured questionnaire targeting online shoppers in North Indian states. A sample of 519 online shoppers was considered in this research. Structural equation modelling (SEM) was used to evaluate the interrelationships among constructs. To examine the hypothesized relationships, path analysis was carried out. The findings of the chapter revealed that delivery speed and product presentation had a significant positive impact on attitude towards online shopping. In contrast, shipment tracking emerged as non-significant antecedent of attitude. The study further empirically provides the evidence that trust mediates the relationship between attitude and repurchase intention.
The rapid growth of Internet retail platforms (e.g., Shopify and Wix) and marketplaces (e.g., Amazon, eBay, and Etsy) has given rise to a new wave of entrepreneurship. These are platform entrepreneurs—individuals who establish micro‐retail businesses on third‐party platforms. While there are now millions of such entrepreneurs worldwide, there has been limited scholarly investigation regarding the role of Logistics and Supply Chain Management (LSCM) policies that they can adapt to benefit their small businesses. Because the success of such businesses is intricately driven by the reviews they receive, we deem it essential to investigate how such reviews may be related to their LSCM policies. We conduct an observational field study at one such small platform seller. By investigating items sold under varying merchandise return policies (MRPs), we seek to isolate the relationship between MRP, and the likelihood, positivity, and depth of the reviews left by shoppers. Based on the concept of contractuality , rooted in Sociometer Theory, our results reveal that a more lenient MRP may serve as a perk that may positively impact the customer's review writing. However, the relationship is not monotonic. Instead, there is evidence that the effect of extended MRP leniency on reviews tapers off beyond a certain point.
Purpose
Motivated by the real-world practice that the boom of the online selling induces a higher product return as well, selecting which online channel mode indicates who takes ownership over the product and thus bears the loss of the product return. This paper aims to seek the optimal online channel modes for the two members in a platform supply chain in the presence of product returns.
Design/methodology/approach
This study aims to develop a platform supply chain that consists of one platform company and one supplier. Along with an offline distribution channel, the supplier can choose two alternative online selling modes (i.e. the reselling and agency modes) to sell its product through the online marketplace. This paper applies Stackelberg game to derive the equilibrium with different business scenarios and selects the optimal online channel modes for two parties, respectively. Moreover, this paper extends to a different supply chain with a reverse channel leadership and a different product return policy for testing the robustness.
Findings
Several interesting and important results are derived in this paper. Firstly , it is found that the relative pricing are largely relied on the costs of two channels. Secondly , the platform supply chain may benefit from a pure channel rather than the dual-channel when this channel enjoys a relatively low cost and/or a sufficiently high consumer preference. Then , the platform and the supplier act contradictorily when selecting their optimal online channel modes. To be specific, the platform motivates to choose the online reselling mode when both the commission rate and the slotting fee are relatively low, whereas the supplier is likely to select the online agency mode under this circumstance. Finally , a win-win situation in regards to the optimal online channel mode for two parties is achievable with numerical experiments.
Practical implications
Based on the analytical studies, the results derived in the authors’ work can provide managerial insights to assist the supplier and the platform company in determining the operational decision and selecting the optimal online channel mode to deal with consumer returns. In addition, appropriate commission rate along with slotting fee will make both parties achieve a win-win situation in determining their optimal online channel mode.
Originality/value
To the authors’ best knowledge, this paper makes the first move to determine the optimal online channel mode in the content of consumer returns and study how it is affected by different product return policies.
As the courier service market becomes more competitive and the business environment changes, courier providers are being forced to become more customer-oriented and to establish long-term relationships with their clients. Courier companies presently place a strong emphasis on the quality of their services, as well as on customer satisfaction and loyalty. Customer satisfaction serves as a fundamental assessment of a company's service delivery system, whereas customer satisfaction is a “post-consumption” experience that evaluates perceived quality with expected quality. When a provider creates a benefit for consumers, it increases the likelihood that they will continue and even increase their use of the provider's courier services. Today's courier service providers are looking for ideas on how to increase customer loyalty and increase sales. Reduced marketing expenditures, more sales, and lower operating costs all contribute to the improved profit.
With the rapid development of low-carbon tourism and online travel agencies (OTAs), whether to enter OTAs has been a problem faced by tour operators in the context of low-carbon tourism. Besides, if tour operators enter OTAs, whether to provide online refund policies is also a challenge for them. To research whether tour operators should enter OTAs and provide online refund policies, three models are built. Main results reveal that when OTAs charge relatively high annual service fees, tour operators should not enter OTAs. When the annual service fees are relatively low and tourist’s satisfaction rate with tour package from online channel meets the constraint in our models, tour operators will enter OTAs and always provide online refund policies for tourists. Although entering OTAs and providing online refund policies will benefit tour operators and tourists, they will cause the worst impact on the environment. Moreover, when considering the impacts of online reviews, government subsidy and discounted value of the dissatisfied low-carbon tour package, operation strategies of tour operators are still held. When considering the different power structure, tour operators’ optimal channel choice strategies are not changed but optimal online refund policy strategies have changed a lot.
Many online returns are caused by mismatches between what consumers see online and what they actually receive. This paper discusses e-sellers’ use of purchase-risk notices (PRNs) for possible mismatches as a preemptive action to avoid returns. Two one-factor (purchase-risk notice: presence vs. absence) scenario experiments were conducted via two studies (Study 1 and Study 2). The pre-purchase effects and post-purchase effects of PRNs were examined in Study 1 and Study 2, respectively. One-way ANOVAs were used to test the hypotheses. It was found that returns can be avoided by using PRNs without negatively affecting consumers’ purchase intentions. Additionally, using PRNs can make consumers more tolerant of minor mismatches, attract more repurchases, and reduce consumers’ dissatisfaction and regret about purchase decisions.
As a solution to bring security for customers in the retail markets, product return policies are widely utilized. As a result, many retailers take various return leniency measures to ease the applicability of product returns for customers. This, in turn, increases the frequency of returns in the market, which has huge economic impacts on retailers. Therefore, it is necessary to accurately understand the impact of return policy social welfare. To enable this, we present a novel, inclusive analytical model capable of capturing the impacts of major factors affecting the customers’ behavior, including return leniency, customers’ heterogeneity, and the endowment effect, in addition to the other commonly studied factors in the literature (product expenses, hassle cost, salvage value). In this model, we mathematize the probability of purchasing, keeping, and returning products. Utilizing these probabilities, in turn, help us determine the optimal price and refund levels to optimize the social welfare. We use a set of numerical experiments over a wide range of parameters’ values that should cover almost all practical circumstances. Our analysis shows optimal return strategies under various circumstances to maximize the social welfare.
Buy‐online‐pickup‐instore (BOPIS) services have become an increasingly important part of a retailer's omnichannel strategy. When service failures (e.g., stock‐out) occur, consumers may resort to negative word‐ofmouth (NWOM) to share their evaluation of the retailer's BOPIS service. While a retailer's service recovery policies (e.g., cross‐channel substitution) may help to fulfill its service intent, the extent to which these two signals can improve consumer satisfaction and diminish their NWOM intent remains unknown. Drawing from both service recovery literature and signaling theory, we conducted a series of five experiments and find that the intradimensional congruity of the signal set communicated by the retailer during its BOPIS service process depends on both its operational capability and the consumer's own predilection regarding the product category. These insights collectively indicate that while a retailer's operations need to support service policies to provide a congruous BOPIS service process, substitution policies offered to consumers during the transaction need to consider the extent to which a consumer's purchase decision is hedonic or utilitarian. In turn, this finding suggests that a retailer's category management needs to consider BOPIS substitution in terms of both product assortment and inventory policies.
This study examines whether and how an online service marketplace can leverage refund options endorsed by different parties (i.e., the platform or sellers) to address the “lemons” problem that is due to the intangibility, variability, and unreturnable nature of the services sought. We show that both platform refund insurance and a seller-guaranteed refund increase service demand, with platform refund insurance as the more effective option and hence having a more effective signaling mechanism, and that sellers with a better reputation or less popularity might benefit less from refund options. An investigation on further use of the more effective refund option, a “having platform refund insurance or being cast out” policy (i.e., retaining platform refund-insured sellers but expelling uninsured ones), reveals the effectiveness of this policy in filtering out low-quality sellers, shown as an improved quality of sellers on the platform due to new sellers’ replacing those who were expelled, yet a cost (i.e., a loss in demand and consumer welfare) for the platform due to the changes in characteristics (e.g., price) of sellers. This cost, however, is lower than the benefit from the improved quality of the sellers, so that the platform’s overall performance improves.
Relationships with consumers are critical to the success of online sellers. Online returns can detrimentally influence buyer–seller relationships and, thus, online sellers should carefully approach online returns to restore their relationship with consumers. Returns due to consumer satisfaction-related reasons are a significant and inevitable part of e-commerce. This article focuses on how online sellers deal with the method and the fee aspects of their return shipping policy to improve buyer–seller relationships. We also studied the effects of return shipping policies on several pivotal consumer perceptions and repurchase intentions. A two-factor (integrated return shipping vs. separated return shipping; free return shipping vs. fee return shipping), between-subject experiment was conducted. This research revealed that both using an integrated return shipping method and offering free return shipping can lead to a better buyer–seller relationship and improve other consumer responses. No interaction effect was found between the two factors.
One of the profound impacts of digitalization on supply chains is manifested through e-commerce. The latter has significantly grown during the last two decades, with further amplifications during the COVID-19 pandemic. This has created operational and policy making challenges for firms when deciding about how best to manage the resulting growth in e-commerce. While the impact of e-commerce on supply chains has been widely recognized in the literature, there was no effort to systematically review the literature, conceptualize some of the challenges and propose future research directions. This paper fills this gap by reviewing 153 publications from 1999 to 2019. We classify the reviewed literature based on which supply chain drivers were investigated, as well as, the employed research methodology. In addition, we conduct network and content analysis to uncover the main research themes and potential research directions namely, developing analytical centred; modelling based ecosystem for environment; leveraging data mining to enhance sustainability; balance between growth and sustainability; consumer demand and uncertainty; coordination in e-commerce logistics; last mile alternatives and cost management of innovative technique implementations. Furthermore, based on our literature review, we propose a conceptual framework where we interlink supply chain stages with a firm’s business strategy, digital transformation strategy and performance.
In the online return context, offering the consumer a satisfactory return experience is critical to an online seller's success. However, little is known about how online sellers can improve consumers' online return experience. This research examines whether an instant refund service can improve the online return experience. To obtain a comprehensive view of the outcomes of using an instant refund service, this paper also examines how the use of an instant refund affects several pivotal consumer responses. Study 1 analyzed the effects of an instant refund service on consumer responses in a post-purchase pre-return scenario, and Study 2 analyzed the effects of instant refunds on a set of key variables in a post-purchase post-return scenario, including satisfaction with the online return experience. For each study, the hypotheses of the effects of an instant refund on consumer responses were discussed, and a one-factor (instant refund service, yes vs. no) between-subject scenario experiment (with an additional related experiment in study 1) was conducted, using online panel data from Wjx.cn. One-way ANOVA was used to test the hypotheses. It is concluded that an instant refund service increases consumer satisfaction with the experience and improves other consumer responses. In terms of potential side-effects, instant refunds are not significantly associated with stronger product return intentions. These findings can help online sellers decide whether to evolve their conventional refund mode to a new instant refund mode.
The purpose of this study was to develop a scale for measuring celebrity endorsers' perceived expertise, trustworthiness, and attractiveness. Accepted psychometric scale-development procedures were followed which rigorously tested a large pool of items for their reliability and validity. Using two exploratory and two confirmatory samples, the current research developed a 15-item semantic differential scale to measure perceived expertise, trustworthiness, and attractiveness. The scale was validated using respondents' self-reported measures of intention to purchase and perception of quality for the products being tested. The resulting scale demonstrated high reliability and validity.
The authors report a study of the effects of price, brand, and store information on buyers' perceptions of product quality and value, as well as their willingness to buy. Hypotheses are derived from a conceptual model positing the effects of extrinsic cues (price, brand name, and store name) on buyers' perceptions and purchase intentions. Moreover, the design of the experiment allows additional analyses on the relative differential effects of price, brand name, and store name on the three dependent variables. Results indicate that price had a positive effect on perceived quality, but a negative effect on perceived value and willingness to buy. Favorable brand and store information positively influenced perceptions of quality and value, and subjects' willingness to buy. The major findings are discussed and directions for future research are suggested.
This chapter focuses on one particular aspect of authoritativeness: voluntary compliance with the decisions of authorities. Social psychologists have long distinguished between obedience that is the result of coercion, and obedience that is the result of internal attitudes. Opinions describe “reward power” and “coercive power”, in which obedience is contingent on positive and negative outcomes, and distinguish both of these types of power from legitimate power, in which obedience flows from judgments about the legitimacy of the authority. Legitimate power depends on people taking the obligation on themselves to obey and voluntarily follow the decisions made by authorities. The chapter also focuses on legitimacy because it is important to recognize, that legitimacy is not the only attitudinal factor influencing effectiveness. It is also influenced by other cognitions about the authority, most notably judgments of his or her expertise with respect to the problem at hand. The willingness of group members to accept a leader's directives is only helpful when the leader knows what directives to issue.
The high cost of attracting new customers on the Internet and the relative difficulty in retaining them make customer loyalty an essential asset for many online vendors. In the non-Internet marketplace, customer loyalty is primarily the product of superior service quality and the trust that such service entails. This study examines whether the same applies with online vendors even though their service is provided by a website interface notably lacking a human service provider. As hypothesized, customer loyalty to a specific online vendor increased with perceived better service quality both directly and through increased trust. However, the data suggest that the five dimensions of service quality in SERVQUAL collapse to three with online service quality: (1) tangibles, (2) a combined dimension of responsiveness, reliability, and assurance, and (3) empathy. The first dimension is the most important one in increasing customer loyalty, and the second in increasing customer trust. Implications are discussed.
Purpose – The purpose of this paper is to provide a framework to help e-marketers to find an optimal returns policy and pricing strategy in order to maximize their profits. Design/methodology/approach – A profit-maximization model is developed to determine the optimal returns policy and pricing strategy for e-marketers. Findings – The author demonstrates that an optimal returns policy and pricing strategy exists when firms sell products through an e-market. When a firm uses an e-market to sell its product, its optimal returns policy and pricing strategy is to offer a more generous returns policy and to charge a higher price when the product web-fit is strong. Furthermore, the results also show that while the returns policy always is valuable for the e-marketer, the value of returns policy increases with the product web-fit. Research limitations/implications – The present study assumed that all consumers have perfect information. However, information to the consumers could be incomplete. It is recommended that future research explores returns policy and pricing strategy under an incomplete information setting. Practical implications – This paper provides a very useful model framework, returns policy and pricing strategy for business managers who are using or planning to use the e-market to sell their products. Originality/value – This paper fills a conceptual and practical gap for a structured analysis of the current state of knowledge about returns policy and pricing strategy in e-business. The paper provides practical, solid advice and examples that demonstrate the application of the optimal strategies for e-business managers.
The authors expand and integrate prior price-perceived value models within the context of price comparison advertising. More specifically, the conceptual model explicates the effects of advertised selling and reference prices on buyers' internal reference prices, perceptions of quality, acquisition value, transaction value, and purchase and search intentions. Two experimental studies test the conceptual model. The results across these two studies, both individually and combined, support the hypothesis that buyers' internal reference prices are influenced by both advertised selling and reference prices as well as the buyers' perception of the product's quality, The authors also find that the effect of advertised selling price on buyers' acquisition value was mediated by their perceptions of transaction value, In addition, the effects of perceived transaction value on buyers' behavioral intentions were mediated by their acquisition value perceptions. The authors suggest directions for further research and implications for managers.
Are trust and risk important in consumers' electronic commerce purchasing decisions? What are the antecedents of trust and risk in this context? How do trust and risk affect an Internet consumer's purchasing decision? To answer these questions, we i) develop a theoretical framework describing the trust-based decision-making process a consumer uses when making a purchase from a given site, ii) test the proposed model using a Structural Equation Modeling technique on Internet consumer purchasing behavior data collected via a Web survey, and iii) consider the implications of the model. The results of the study show that Internet consumers' trust and perceived risk have strong impacts on their purchasing decisions. Consumer disposition to trust, reputation, privacy concerns, security concerns, the information quality of the Website, and the company's reputation, have strong effects on Internet consumers' trust in the Website. Interestingly, the presence of a third-party seal did not strongly influence consumers' trust.
We use attribution theory to understand consumers' perceptions of fairness of price increases. Using the dual entitlement (DE) principle, researchers in the past have suggested that price increases will be perceived as fairer if they are cost-justified. In this study, we empirically demonstrate that this is not universally true. We conduct three experiments to examine the fairness perception on two attributional dimensions — locus of cause and controllability. We find empirical evidence to conclude that even cost-justified price increases can be perceived as less fair when the locus of causality is internal to the seller and/or when the price increase is within the volitional control of the seller. For example, when competitors' prices stay the same or when the cost increase is directly attributable to the seller's actions, even cost-justified price increases are seen as less fair. Implications of these findings for managers and policymakers are discussed.
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
This study developed and tested a trickle-down model of organizational justice that hypothesized that employees' perceptions of fairness should affect their attitudes toward the organization, subsequently influencing their behaviors toward customers. In turn, customers should interpret these behaviors as signals of fair treatment, causing them to react positively to both the employee and the organization. The model was tested on a sample of 187 instructors and their students. The results revealed that instructors who perceived high distributive and procedural justice reported higher organizational commitment. In turn, their students reported higher levels of instructor effort, prosocial behaviors, and fairness, as well as more positive reactions to the instructor. Overall, the results imply that fair treatment of employees has important organizational consequences because of customers' attitudes and future intentions toward key service employees.
In this article, we provide guidance for substantive researchers on the use of structural equation modeling in practice for theory testing and development. We present a comprehensive, two-step modeling approach that employs a series of nested models and sequential chi-square difference tests. We discuss the comparative advantages of this approach over a one-step approach. Considerations in specification, assessment of fit, and respecification of measurement models using confirmatory factor analysis are reviewed. As background to the two-step approach, the distinction between exploratory and confirmatory analysis, the distinction between complementary approaches for theory testing versus predictive application, and some developments in estimation methods also are discussed.
In this article, the authors examine the circumstances in which brand names convey information about unobservable quality. They argue that a brand name can convey unobservable quality credibly when false claims will result in intolerable economic losses, These losses can occur for two reasons: (1) losses of reputation or sunk investments and (2) losses of future profits that occur whether or not the brand has a reputation. The authors test this assertion in the context of the emerging practice of brand alliances. Results from several studies are supportive of the premise and suggest that, when evaluating a product that has an important unobservable attribute, consumers' quality perceptions are enhanced when a brand is allied with a second brand that is perceived to be vulnerable to consumer sanctions. The authors discuss the theoretical and substantive implications for the area of brand management.
This paper examines the relationship between a quantity discount strategy and a return policy by means of a three-stage game approach. In the first stage, the manufacturer considers how to employ a quantity discount strategy and/or a return policy. If he decides to employ a quantity discount strategy, in the second stage the manufacturer will ask the retailer to order the quantity which provides an optimal stocking level for joint profits. The buyback price is also determined by negotiation between the manufacturer and the retailer in the second stage. Finally, the manufacturer sets the wholesale price to keep his promise that the retailer’s profits before and after the strategy remain the same in the third stage. In order to keep the retailer’s profits unchanged, the buyback price is positively linked with the wholesale price. The quantity discount could be negative if the buyback price under the return policy is too high.
This study investigates factors that affect consumer continuous use intention toward online group buying and the degree that reciprocity and reputation of social exchange, trust, and vendor creativity affect consumer satisfaction and intention toward online purchasing. Data from 215 valid samples was obtained using an online survey. The research model is assessed using partial least squares (PLS) analysis. The results show that the intention to engage in online group buying is predicted collectively by consumer satisfaction, trust, and seller creativity. Consumer satisfaction with online group buying is predicted primarily by trust, followed by consumer reciprocity. The proposed research model explains 67.7% of variance for satisfaction and 39.7% of variance for intention to engage in online group buying. The results suggest that reciprocity, trust, satisfaction, and seller creativity provide considerable explanatory power for intention to engage in online group buying behavior.
The growth of catalog sales and the enormous potential of e-commerce elevates the importance of understanding remote purchase. Remote purchase environments differ from traditional bricks-and-mortar purchases in that the purchase decision is more likely to be framed as two separate decisions: consumers' decisions to order and, upon receipt, their decisions to keep or return the item. These two decisions are separated by a period of time, and crucial experiential information often is available only at the second decision point (i.e., after receipt). Consumers' initial lack of experiential information makes product choice more risky. Return policy leniency is one way to minimize the inherent consumer risk, but retailers may avoid instituting overtly lenient policies because they expect increased return rates. However, the endowment effect suggests some surprising benefits of return policy leniency to the retailer. Results from three experiments provide support for the idea that product ownership depends more on perception than possession.
This article develops an information economics perspective on the value (or equity) ascribed to brands by consumers. Unlike research based on cognitive psychology, the proposed signaling perspective explicitly considers the imperfect and asymmetrical information structure of the market. It motivates the role of credibility (determined endogenously by the dynamic interactions between firms and consumers) as the primary determinant of consumer-based brand equity. Thus, when consumers are uncertain about product attributes, firms may use brands to inform consumers about product positions and to ensure that their product claims are credible. Thus, brands may signal product positions credibly. Brands as market signals improve consumer perceptions about brand attribute levels and increase confidence in brands' claims. The reduced uncertainty lowers information costs and the risk perceived by consumers, thus increasing consumers' expected utility. This chain of relations that drives consumer-based brand equity is presented as a structural model and tested empirically in the linear structural relations framework using survey data on jeans and juice. The results are consistent with the proposed relations embodied in the signaling perspective on brand equity.
The essence of strategy formulation is coping with competition. Yet it is easy to view competition too narrowly and too pessimistically. While one sometimes hears executives complaining to the contrary, intense competition in an industry is neither coincidence nor bad luck.
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
This paper aims to predict consumer acceptance of e-commerce by proposing a set of key drivers for engaging consumers in on-line transactions. The primary constructs for capturing consumer acceptance of e-commerce are intention to transact and on-line transaction behavior. Following the theory of reasoned action (TRA) as applied to a technology-driven environment, technology acceptance model (TAM) variables (perceived usefulness and ease of use) are posited as key drivers of e-commerce acceptance. The practical utility of TAM stems from the fact that e-commerce is technology-driven. The proposed model integrates trust and perceived risk, which are incorporated given the implicit uncertainty of the e-commerce environment. The proposed integration of the hypothesized independent variables is justified by placing all the variables under the nomological TRA structure and proposing their interrelationships. The resulting research model is tested using data from two empirical studies. The first, exploratory study comprises three experiential scenarios with 103 students. The second, confirmatory study uses a sample of 155 on-line consumers. Both studies strongly support the e-commerce acceptance model by validating the proposed hypotheses. The paper discusses the implications for e-commerce theory, research, and practice, and makes several suggestions for future research.
Classic and contemporary methods for analyzing construct validity are compared and contrasted through reanalyses of data from the organizational research literature to establish a basis for assessing the validity of measures used in organizational research. Campbell and Fiske's (1959) criteria are found to be lacking, particularly in their assumptions, diagnostic information, and power. Confirmatory factor analysis (CFA) is shown to overcome most limitations inherent in Campbell and Fiske's procedures. Nevertheless, two potential shortcomings are identified with the CFA method: the confounding of random error with measure-specific variance and the inability to test for interactions between traits and methods. Three alternative methods are presented for addressing the former issue, and the direct product model is described as a solution to the latter. The techniques considered herein go farther than currently used procedures for enhancing our ability to ascertain the validity of variables commonly studied in organizational research.
This paper investigates the role of the returns policy in the co-ordination of supply chain: A manufacturer provides a return policy for unsold goods to two competing retailers who face uncertain demand. The problem is described with a game theory structure: The manufacturer, as the Stackelberg leader, first commits a returns price to the retailers under a given wholesale price. Upon receiving this information, two competing retailers, as followers, make decisions for their retail price and order size, in which the process of pricing and ordering is played as Nash equilibrium. Anticipated the retailers' responses, the manufacturer designs his returns policy. Adopting the classic newsboy problem model framework and using numerical study methods, the study finds that the provision of a returns policy is dependent on the market conditions faced by the retailers. The paper also analyses the impact of demand variability on the decisions of optimal retail price and order quantity and profit reallocation between the manufacturer and the retailers. Finally, it investigates how the competing factor influences the decision-making of supply chain members in response to uncertain demand and profit variability.
We study channel coordination policies for products subject to midlife price declines during their short product life cycles. Using a two-period supply chain model consisting of one supplier and one retailer, we identify policies and/or conditions under which the supply chain can be coordinated and a win-win situation can be guaranteed. We also provide algorithms to determine the win-win policy parameters. We show that if there are two purchase opportunities, then under linear or decreasing (the more you buy, the lower price you pay) pricing strategies, there may not exist a win-win policy. Our analysis shows that several findings in the single-period models prevalent in the supply chain research literature to date do not extend to the two-period model with two purchase opportunities. For example, returns policies and revenue sharing contracts are no longer equivalent. Also, quantity discounts may never lead to a win-win situation. In fact, the supplier may need to charge more for large orders in order to achieve a win-win outcome. Finally, the analytical framework of this paper can be applied to situations in which the price is constant but production costs change over time.
This paper examines the antecedents and consequences of perceived price-matching policy fairness. Among the antecedents, we study the effects of the refund depth if a lower competitive price is identified, the degree that the retail product assortment is available at competing retailers, and the consumers' inference as to the retailer's motive for the price-matching policy. Product assortment uniqueness is identified as a key driver of fairness perceptions, both directly and indirectly through inferred motive. The three experiments show that consumers' perceptions of the fairness of a store's pricing policy influence their price fairness perceptions, consequently influencing their retail shopping intentions.
Internet retailing has significantly changed the character of retail competition. More and more often, ordinary consumers, not just the technologically savvy ones, are making purchases over the Internet. The extent to which e-tailers can build trust will significantly influence the willingness of consumers to make purchases over the Internet. As a result, it is important to better understand the factors that influence consumers' trust in e-tailers. This research models the effects of store name, on-line security guarantee, and money-back guarantee on price expectations and willingness to buy. The results suggest that value-enhancing approaches, like assurances of security encryption and money-back guarantees, are more important for less well-known e-tailers than for their more famous competitors. © 2003 Wiley Periodicals, Inc.
A returns policy, which specifies a schedule of rebates from manufacturer to retailer for product left over at the end of the selling season, encourages larger order quantities and can increase manufacturer profit. One downside from a manufacturer's perspective is the possibility of very low profit due to high rebate expense when demand is lower than expected. We take the viewpoint of a manufacturer selling a short life-cycle product to a single risk-neutral retailer and describe returns policies that, when compared to no returns, satisfy two conditions: (1) the retailer's expected profit is increased and (2) the manufacturer's profit is at least as large as when no returns are allowed. We call such a returns policy risk-free.
Manufacturers often use returns policies to encourage retailers to stock and price items more aggressively. We focus on the effect that such policies have on both a retailer's and a manufacturer's profits when the retailer must commit prior to the selling season to both a stocking quantity and a price at which to sell an item. Such a commitment is often necessary for retailers who sell primarily through catalogues.
This paper considers the pricing decision faced by a producer of a commodity with a short shelf or demand life. A hierarchical model is developed, and the results of the single period inventory model are used to examine possible pricing and return policies. The paper shows that several such policies currently in effect are suboptimal. These include those where the manufacturer offers retailers full credit for all unsold goods or where no returns of unsold goods are permitted. The paper also demonstrates that a policy whereby a manufacturer offers retailers full credit for a partial return of goods may achieve channel coordination, but that the optimal return allowance will be a function of retailer demand. Therefore, such a policy cannot be optimal in a multi-retailer environment. It is proven, however, that a pricing and return policy in which a manufacturer offers retailers a partial credit for all unsold goods can achieve channel coordination in a multi-retailer environment.
This article was originally published in Marketing Science, Volume 4, Issue 2, pages 166–176, in 1985.
Direct marketing is witnessing explosive growth. As consumers increasingly purchase products from their homes, their ability to judge the quality of products they buy is significantly reduced. In this paper we study how money-back guarantees can signal product quality in such environments. We interpret product quality broadly to mean both the level of attributes promised as well as the firm's consistency in delivering on those promises. Key aspects of our formulation are the explicit consideration of transaction costs, and alternative signals of product quality. Transaction costs are the costs the seller or buyer faces when redeeming a money-back guarantee. We show that money-back guarantees signal quality by exploiting the higher probability of returns for a lower quality product, and the attendant higher transaction costs. However, if the seller's transaction costs are very large, then there are less costly ways to signal, namely charging a high price. We compare the signaling performance of (1) price, (2) price with uninformative advertising, and (3) price with a money-back guarantee. Whereas uninformative advertising does not work at all in our model, under certain conditions a money-back guarantee is necessary to signal, and under other conditions, a money-back guarantee is a useful supplement to price.
The paper offers a comparative analysis of different ways to sell products (selling formats) when buyers incur evaluation costs. Since these costs are sunk at the moment of trade, buyers may refrain from incurring them for fear of later opportunism on the part of sellers. It is found that the use of many common selling formats can be explained in terms of their ability to alleviate this problem. Specifically, I explain price advertising, seller colocation, and bargaining. The theory explains much of the divergence in retail trading institutions and leads to several testable predictions.
The results of a study of inter-organizational coordination effect in inventory control, return, and clearance sales policies for a distribution channel consisting of a supplier, a retailer, and a Discount Sales Outlet (DSO) are reported here. We first study the retailer–DSO coordination issues. The products are initially sold in a retail outlet. After the selling season, the leftovers are moved to a DSO for a permanent clearance sale. When the retailer and the DSO coordinate, they share information on the demand forecast and jointly decide the stocking, markdown sales, and return policies to maximize mutual profit. In the absence of coordination, the demand information is not shared by the two parties, and the decisions are decentralized to optimize the individual party’s objective function. For the supplier–retailer–DSO cooperation issue, two models are considered: namely, the Joint Optimal Model (JOM) and the Individual Optimal Model (IOM), respectively. In the IOM, the stocking, markdown sales, and return policies are individually designed by the retailer–DSO, while the supplier independently sets the terms of the return policy. We compare this approach with the JOM, in which the supplier–retailer–DSO jointly designs a mutually beneficial plan so as to maximize the supply chain joint profit. Optimal coordination policies are analyzed, and the factors that make coordination an effective approach are studied.
The authors review the literature on the roles and sources of company reputation and report the results of an empirical study. Using business insurance service data, the study tests the proposition that a company's reputation and its service offering information collectively determine a buyer's expectations. In turn, expectations, reputation, and information impact buying intention. The empirical evidence suggests that (1) a buyer's response to a service is consistent with his/her attitude toward the vendor's reputation, (2) the common factor underlying a company's reputation is primarily uni-dimensional, and (3) the effectiveness of a specific communications program can be enhanced by utilizing the company's reputation.
In two studies, we investigate the interrelationship between return policy leniency and retailer quality. In the first study, we content analyze the return policies of e-tailers randomly selected from those listed at BizRate.com. Then we relate the return policy characteristics to these quality ratings. Consistent with signaling theory, we find that as the ratings of e-tailer quality increase, return policy leniency increases in non-consumable product categories. However, the positive quality/return policy leniency relationship does not hold in consumable product categories. In a follow-up experiment, we investigate how consumers interpret the return policy signal. Specifically, we find that consumers' ability to control their shopping experience and their general trust of e-tailers moderate their reactions to return policies that differ in leniency. Finally, we discuss the theoretical and managerial implications of this research.
This article discusses a research tool for marketing strategies—Consumer Preference Structure Analysis—as an illustration of how direct marketers can benefit from an understanding of the patterns in consumer choice behavior. From purchasing histories and product attribute ratings, this innovative strategic marketing tool defines a hierarchy of buyer preferences and market competition. An analysis of findings from a mail survey of 565 women apparel buyers indicates that switching patterns between catalogs and catalog attribute ratings define a hierarchy of directly and indirectly competitive apparel catalogs. This leads to an explanation for consumer priorities in the women's apparel catalog market and, more generally, to an appreciation of how buyer behavior patterns and attribute ratings can be analyzed.
There is a paucity of empirical research that systematically examines the meaning of contact employee dress cues in commercial service settings. We conduct an experiment to test the effects of the appropriateness of service personnel dress on customer expectations of a firm's service quality and intent to purchase banking services. We also explore the moderating effects of involvement and customer gender on the aforementioned relationships. Results show that appropriate (vs. inappropriate) dress resulted in higher service quality expectations and purchase intent. These effects were stronger in low involvement situations and for female customers. The implications of the findings are discussed and future research directions proposed.
This paper studies the coordination issue of a three level supply chain selling short life cycle products in a single period model. The manufacturer first negotiates the trade contract with the retailer, then with the supplier. We construct the so-called flexible return policy by setting the rules of pricing while postponing the determination of the final contract prices. With return policies between each pair of adjacent firms, unsold products or used modules dissembled from the unsold products are returned level by level from the retailer to the upstream firms and each firm shares in the loss due to the overstock. We show that the three level supply chain can be fully coordinated with appropriate contracts and the total profit of the channel can be allocated with any specified ratios among the firms.
This study examines the antecedents and consequences of consumer trust in the United States, Singapore and China. The results show that reputation and system assurance of an Internet vendor and consumers’ propensity to trust are positively related to consumer trust. Consumers’ trust has a positive relationship with attitude and a negative relationship with perceived risk. Implications of the results are discussed.
We study in this paper a supply chain which is integrated by a returns policy. In the past, owing to a lack of sales channels, the returned products would worth very little. Now, with the advance of the e-commerce, the returned products can be sold with a higher price on the e-marketplace. In light of this, we first investigate the optimal returns policy under the existence of the e-marketplace. Through a mean–variance analysis, we further study the risk issue associated with the optimal policy. Extensive simulations are then carried out and the managerial insights are discussed.
P> To a large extent, trust determines expected utility derived from business transactions where the trusting party is dependent upon others, but lacks control over them. In many instances, this typifies the relationship between clients and an enterprise resource planning (ERP) customization vendor. This exploratory study examines how trust is built during an ERP implementation, and the relative weight of this trust compared with the perceived qualities of the implemented ERP itself in determining clients' assessment that the business relationship with the vendor is worthwhile.
The data, collected from companies that were involved in the process of implementing a new ERP with the on-site assistance of a certain customization vendor, show that all three trust antecedents suggested by Zucker's seminal study of trust-- process-based, characteristic-based, and institution-based mechanisms--contribute significantly to client trust. The data also show that client trust in this customization vendor and the perceived usefulness of the ERP both contribute to client assessment that their business relationship with the vendor is worthwhile, showing that both getting the job done and creating a trust-based relationship contribute to this assessment. The implications of the importance of creating trust in ERP implementation and the means of doing how to do so are discussed.</P