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The Nature of Customer Experience and its Determinants in the Retail Context: Literature Review

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15th International Conference on Wirtschaftsinformatik,
March 08-11, 2020, Potsdam, Germany
The Nature of Customer Experience and its
Determinants in the Retail Context: Literature
Review
Anna Hermes1, René Riedl1,2
1Johannes Kepler University, Department of Business InformaticsInformation Engineering,
Linz, Austria; 2 University of Applied Sciences Upper Austria, School of Business and
Management, Steyr, Austria
anna.hermes@jku.at, rene.riedl@fh-steyr.at
Abstract. The purpose of this study is to investigate the nature of customer
experience (CX) in the context of retail, as well as its determinants in a
psychological context. Based on a comprehensive literature review we
identified 45 relevant articles. Major results are: First, we identified 41 factors
operationalizing CX. Bearing the vast amount of conceptualizations in mind, it
follows that today we observe significant diversity in how CX is
operationalized. Second, we identified 27 determinants of CX. A customers
psychology always plays a role during consumers interaction with companies.
Hence, we classified the identified factors into two categories. First,
predominating psychological CX determinants which can hardly be, or not at
all, influenced by companies. Second, interactive CX psychological
determinants which can only be measured during or after an interaction with a
company; moreover, these determinants can, at least partly, be influenced by a
company.
Keywords: customer experience, customer psychology, systematic literature
review, retail environment
1 Introduction
The Internet has changed the retail landscape. E-Commerce and technologies such as
augmented reality challenge the traditional business model of brick-and-mortar
retailers by providing new online shopping experiences [1, 2]. Considering this trend,
retailers have started to provide compelling customer experiences (CX) by seamlessly
integrating online and physical channels [35]. To better manage this integration
process, it is critical for retailers to develop an in-depth understanding of the
customers behavior to increase satisfaction and to optimize retail efforts [6].
In the early 1980s, Holbrook and Hirschman [7] introduced the perspective of
customer behavior and were among the first to point out that buying decisions are not
only based on logical thinking. It follows that CX, while not having that explicit label
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during that time, has been considered as an important phenomenon for decades.
Recently, Lemon and Verhoef [4] defined CX as a multidimensional construct
focusing on a customers cognitive, emotional, behavioral, sensorial, and social
responses to a firms offerings during the customers entire purchase journey (p. 71).
Examining how customers go through the buying process in retail, Puccinelli et al.
[6] argue that psychological factors such as goals, information processing, affect,
memory, or involvement significantly affect consumers decisions. Unfortunately, our
current understanding of these psychological factors is limited. Thus, they made an
explicit call for further research in this area. It follows that more research on the
psychological drivers of CX, the rise of omnichannel, and how touchpoints can be
seamlessly integrated is needed [8, 9]. This would not only contribute to a better
theoretical understanding of CX in the retail context, but would also provide an
important foundation for retail managers in practice. Today, most management
decisions are hardly evidence-based. This is an undesirable state, as it counteracts one
major goal of academic research, namely to contribute to the development of the
human society and economy.
Against this background, the purpose of the present study is to explore the nature
of CX in the retail context, as well as its psychological determinants. The findings of
this research can help retailers optimizing their sales and interaction channels while
taking customer psychology into consideration. To this end, a systematic literature
review was undertaken based on the following main research questions: How is retail
CX operationalized and what are the psychological determinants of CX in a retail
context?
2 Methodology of the Literature Review
Vom Brocke, Simons, Niehaves, Niehaves and Reimer [10] call for a thorough
documentation of the literature review in the IS domain. Based on their framework,
we will first consider the scope and conceptualization of this literature review. The
scope of the present study focuses on research outcomes and methodologies. The
conceptualization is characterized by a neutral summary of relevant studies. To
further define the scope of this literature review, it is necessary to examine the
different research streams of CX. According to Kranzbühler, Kleijnen, Morgan and
Teerling [11], CX research has followed two different approaches: the organizational
view and the consumer view. Studies in the organizational research stream focus on
how to implement consumer-centric business processes within the company, for
example through CX management. In contrast, research in the consumer research
stream develops an understanding of how consumers perceive a firms offered
experience. The focus of this review is to identify and analyze previous studies that
examine the nature of CX and its psychological determinants in the context of retail.
Thus, this study focuses on the consumer perspective of CX, and not on
organizational CX processes.
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2.1 Search Process
Based on vom Brocke et al. [10], the search process includes journal search, database
search, as well as cross-reference evaluation. To identify relevant literature, the
review process had two phases. Phase I included the search of journals, databases, and
cross-references for articles related to CX in retail. Phase II identified which papers
from Phase I include consumer psychology.
First, in Phase I we reviewed 66 high-ranked information systems, business
informatics, and marketing journals (A+, A, B) from the VHB-JOURQUAL3 ranking
published by the German Academic Association for Business Research (a list of the
reviewed journals is available upon request from the authors).
The search query "customer experience*" was used to search within title and
abstract. Second, the databases Web of Science and EBSCOhost were consulted. To
make the search more specific, the following terms were used: "customer
experience*" AND retail, as well as "customer experience*" AND psych*. After
removing duplicates, this initial search yielded 142 articles from the journal search
and 167 articles from the database search. To ensure quality and relevance, the search
included only articles that were published in a peer-reviewed outlet. We only
analyzed papers written in English.
Third, following an initial screening of the titles of all 309 articles, 222 were
eliminated because they were not related to retail, or because CX was not the core of
the investigation. Specifically, we excluded articles focusing on the company side of
managing CX through technology (e.g. check-out systems), strategic management and
business processes in the context of CX (e.g. supplier and quality management). In
those cases, in which title and abstract were not enough to make the inclusion
decision, the two authors of this paper reviewed the introduction, theoretical model
and corresponding constructs, and the conclusion to identify information for the
decision.
Fourth, after a thorough review of the remaining 87 papers, 23 relevant articles
were added through cross-reference. The Top 400 ranked journals in the fields of
Business, Computer Science, and Psychology (Scimago Institutions Rankings of
2018, sorted by Journal Rank Indicator) were included. A total of 27 articles did not
meet this quality criterion and were eliminated.
Fifth, at this stage a total of 83 articles remained and were assessed for full-text
eligibility. Within Phase II of this study, the articles were reviewed for psychological
content. To do so, another keyword search within the papers was conducted
(specifically, we analyzed the following sections: title, abstract, keywords,
hypothesis, and research questions).
To develop a set of keywords the chapter headlines of important books in the
psychology domain were reviewed. The books were selected by searching for (i)
consumer AND psychology, (ii) marketing AND psychology, (iii)
ecommerce AND psychology and (iv) e-commerce AND psychology in the
book titles on Google Books as well as the EBSCOhost database (filtered by books).
Books were included if they were written in English and the index page(s) were
available either within Google Books or Amazon.com. A total of 20 books were
identified. The keywords were drawn from the chapter and capital titles of the two
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most cited books in the study domain on Google Scholar, namely Foxall, Goldsmith
and Brown [12] with 957 citations on Google Scholar, as well as Foxall [13] with 463
citations (July 11, 2019).
The following search terms were identified: Psychology/Psychological, Consumer
Research, Personal, Cognition/Cognitive, Personality, Perception, Motivation,
Choice/Choices, Learn/Learning, Attitude/Attitudes, Behavior/Behavioral,
Behaviour/Behavioural, Lifestyle, Environment/Environmental, Society. The journal
name, titles, abstracts, research propositions, research questions, hypotheses, and
keywords of the 83 remaining articles were searched based on these terms. Through
this process, 25 papers were eliminated and 58 remained in our basket.
Sixth, after an in-depth screening, 13 articles were discarded because they looked
at the organizational side of CX or only dealt superficially with the consumers
psychology in CX. For example, a study by Krishna, Cian and Aydınoğlu [14] was
eliminated because it focused purely on package design. This yielded a final set of 45
articles, which constitute the basis of our review (a list of the reviewed papers is
available upon request from the authors). The 45 papers included ten conceptual
papers, three literature reviews, ten scale developments, as well as 22 empirical
studies.
3 Results
3.1 Methodologies and Research Designs
Our literature review identified 22 studies about psychological determinants of CX in
brick-and-mortar, virtual reality, mobile, and online retail stores. Sixteen studies used
a quantitative approach (14 studies used structured questionnaires; one experiment
with survey; one content analysis with survey), five studies used a mixed-method
approach (one Delphi study, survey, and experiment; one in-store survey and focus
group; one study with semi-structured interviews, focus groups, and survey; one
survey, interviews, and experiment; one semi-structured in-depth interviews and
content analysis) and one used a qualitative approach (in-depth interviews). This
dominance of survey is consistent with the results of a meta-analysis on IS research
methodology as reported in Riedl and Rueckel [15].
3.2 CX is a Multidimensional Construct
The next chapter provides the review results on how CX has been conceptualized in
the scientific literature (i.e., nature of the construct). We found a total of 41
conceptualizations of CX (a list of the revealed factors is available upon request from
the authors). Most studies include the customers feelings when dealing with CX.
Specifically, researchers highlight a hedonic [16] and affective [1720] experience, an
emotional experience [21], positive in-shop emotions [22, 23], feelings [24], and
dominance, pleasure, and arousal [25, 26]. Enjoyment is the most researched emotion
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[25, 2729], and Foroudi et al. [16] add the viewpoint of customers recognition (e.g.
a feeling of importance).
Moreover, researchers also refer to a cognitive and intellectual component of CX
[1719, 21, 24]. In this context, flowan immersive state of mind that occurs while
navigating a website [30]is conceptualized as a cognitive element of CX [25, 31].
The flow-related dimensions of temporal disassociation, focused immersion, and
perceived control have also been investigated [26, 28, 29].
The literature also acknowledges that the CX-construct can include the service CX
[3235], the product and sensorial CX [21, 22, 24, 34, 35], CX in the context of price
or promotions [34], as well as a compelling or involving experience [26]. The
literature further reflects on an aesthetic perspective [32, 33], the in-shop
environment, the atmosphere, the product presentation [22, 34], and the retailers
reputation [34].
Several researchers also approach CX with a social or relational component such as
the consumers interaction with staff members [21, 22, 24, 31]. Further, considering
online CX in clothing e-retail context, Pandey and Chawla [27] additionally identify a
psychological CX dimension which is positively influenced by e-logistic ease, and e-
convenience and negatively influenced by e-distrust, e-negative believes, and e-self
inefficacy. They also find a functional dimension based on interactivity which is also
identified by Roy et al. [28], informativeness, visual engagement, as well as
navigation and search ease. An easy and comfortable use is also identified by Gentile
et al. [21].
Researchers further argue that CX contains the customers hedonic (e.g. fun,
pleasure) and utilitarian (e.g. task-oriented) motivations [36, 37], outcome focus [35],
relative advantage [28], return on investment or value for money [3234], lifestyle
[21], customer experience level and satisfaction [23, 38], situational involvement
[31], piece of mind [35], entertainment [20, 25], as well as customers level of
curiosity [29]. Additionally, personalization and playfulness play a role when
conceptualizing CX [28, 32, 33].
While some of the factors such as emotions seem to be of great significance
regardless of the channel, others such as interactivity and enjoyment seem to be more
important online than offline. Factors such as the product or the social experience are
of particular relevance in the store. Based on our analyses, we conclude that many
different approaches exist in the scientific literature to conceptualize, and hence
operationalize, CX in various environments. This finding is important to understand
the results concerning the psychological determinants of CX.
3.3 Psychological Determinants of CX
Despite the large body of literature examining CX, there is a need to further define the
scope and psychological influences on CX [39]. The objective of the following
analysis is a precise description of psychological determinants within retail CX. A
total of 15 studies researched exogenous and endogenous determinants of CX (note
that the terms determinant and antecedent are used interchangeably in this
literature review).
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Several researchers like Grewal et al. [40] and Verhoef et al. [8] created conceptual
frameworks to analyze the impact of exogenous and endogenous determinants of
CX. The framework by Verhoef et al. [8], for example, includes the determinants
social, service, retail atmospheric, assortment, price, and retail brand factors, as well
as the past CX as antecedents. It further considers situational and customer-related
factors like goals as moderators of CX.
To learn more about the psychological factors moderating or determining CX, we
reviewed the literature and found 27 determinants of CX. Figure 1 shows a
morphological box of CX determinants, including the examination counts. The
concept of using a morphological box to visualize determinants was adapted from
Hummel et al. [41]. The following two chapters summarize the results of our
literature review.
We developed two categories from the literature: The Predominating Psychological
CX Determinants (PPCXD) are highly related to the individual, and hence can hardly
be, or not at all, altered by companies. These determinants are anchored very deeply
in the customers psychology and lifestyle. Further, they can be measured
independently from the CX process. The determinants in the second category, we call
them Interactive Psychological CX Determinants (IPCXD), develop during the
customer-company interaction and hence can, at least partly, be influenced by the
company. Having defined these two categories, we assigned the identified 27
determinants accordingly. The following two chapters present the identified PPCXD
and IPCXD thematically structured into six categories.
Figure 1. Morphological box of PPCXD and IPCXD influencing CX
3.3.1. Predominating Psychological CX Determinants
Individual determinants. Lucia-Palacios et al. [19] conducted 41 semi-structured,
in-depth interviews on the determinants of affective and cognitive CX of mall visits.
They conclude that personal determinants like motivations, moods, time
consciousness and mall familiarity moderated the relationship between determinants
like accessibility and physical design. Foroudi et al. [16] surveyed 330 participants to
examine the CX (hedonic and recognitional) in smart retail and during smart retail
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technology adoption. As an independent variable, the researchers identified
commitment to learning and behavioral intention (e.g. social influence, perceived
value). Customer participation mediates the influence on CX, and customer dynamics
(awareness, interest, desire, action) have a direct influence on the CX.
Sociodemographic. Developing a m-commerce mobile application customer
experience model (MACE), McLean et al. [23] collected a total of 1024
questionnaires and found that gender moderated the relationship between (1)
utilitarian factors of technology (ease of use, convenience, customization) and
enjoyment, (2) utilitarian factors of technology and CX (level of satisfaction and
positive emotions), and (3) enjoyment and CX. For example, females CX seemed to
be driven by utilitarian factors while males CX was significantly influenced by the
level of enjoyment. Foroudi et al. [18] explored the influence of the
sociodemographic factor age, gender, education, and occupation on loyalty. While
sociodemographic factors are found to influence loyalty, this relationship was
moderated by the intellectual and affective CX. Deshwal [35] surveyed 346 in-store
customers and found that gender, age, income, and education level at least partly
determined CX quality (defined as peace of mind, moments-of-truth, outcome focus,
and product experience).
Culture. Evanschitzky et al. [37] compare individualistic and collectivistic consumer
cultures and find that shopping motivations and CX vary depending on cultural
backgrounds. This is in line with a study by Shobeiri et al. [32] who report that
culture moderates how Chinese and North Americans experience a retailers website.
3.3.2. Interactive CX Psychological Determinants
Design of channel, interface, and product. Various studies consider the effect of
different online store layouts on CX. Visinescu et al. [29], for example, find that 2D
and 3D layouts affect CX. Krasonikolakis et al. [25] tested different 3D store layouts.
They conclude that store layouts show an influence on shopping enjoyment and
entertainment, but not on the CX (here defined as pleasure, arousal, dominance, flow).
Martin et al. [17] compare the CX of frequent and infrequent online shoppers. In their
survey with 550 participants, they find evidence that aesthetics influence the affective
experiential state, but only for frequent shoppers. Lucia-Palacios et al. [19] define
determinants of cognitive and affective CX in malls as accessibility, atmosphere,
physical design, tenant mix, and crowding perception (these factors are combined as
store layout and atmosphere). In their survey, Gentile et al. [21] find that it is
important to balance utilitarian (or functional) and hedonic (or experiential) product
value to successfully sustain CX. Hence, store layout and product value are
determinants of CX.
Dacko [33] and Blázquez [36] argue that different channels like mobile augmented
reality (MAR) shopping apps and online vs. offline channels can influence customers
CX. Each channel has its potential and features [33] and successful CX needs to
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seamlessly integrate different channels online and offline to best comply with the
customers shopping motivations [36]. Thus, the channel type can influence CX.
Technological benefits. McLean et al. [23] report that utilitarian factors (ease of use,
convenience, customization) influence CX, however, the screen-size moderated the
experience. Moreover, McLean et al. [23] find that m-commerce users report a
negative CX if the completion of a task takes too long (timeliness/telepresence).
Further, Martin et al. [17] compare determinants of CX (defined as a cognitive and
affective experiential state) for frequent and infrequent shoppers. The researchers find
that telepresence (defined as timeless immersion) has a moderate but inverse
relationship with the cognitive experiential state for both groups. For both groups,
perceived benefits seemed important for the affective experiential state, but to a
higher degree for frequent shoppers. For infrequent shoppers, perceived control shows
a positive effect. Perceived control was determined by the ease of use and
customization. The level of enjoyment dictated customers emotions and satisfaction.
Krasonikolakis et al. [25] find that telepresence, defined as a customers sensory
experience and being present, moderated the relationship between different online
store layouts and CX (shopping enjoyment, ease of navigation, and overall online
CX).
Moreover, gamification has been found to influence CX. Poncin et al. [26]
concluded that gamification through a playful interface in smart stores, create a
compelling CX. Gamified challenge mechanics were able to induce arousal, but the
data only partly support that the overall experience was more compelling. Also, Insley
and Nunan [20] examine the link between gamification elements and customer
engagement in retail CX. They conducted 19 in-depth interviews and concluded that
gamification enhances customer engagement, and retailers can gamify their CX to use
this effect. Yet, Martin et al. [17] did not find a positive relationship between
challenge and a customers cognitive state.
Retail unrelated factors. Lucia-Palacios et al. [19] define further situational
moderators of CX as companionship and season of the year.
4 Discussion
Building on a systematic literature review and in-depth analysis, the purpose of this
paper was to identify the psychological determinants of CX. Due to the scattered
literature on CX, we first analyzed how CX is conceptualized and operationalized.
We found 41 factors in the literature. Next, we identified the antecedents and
moderators of CX. The literature review revealed 27 factors.
In their CX framework, Verhoef et al. [8] position the social experience, retail
atmospheric, products, and assortments, for example, as determinants of CX.
However, various researchers [22, 34] use those factors to operationalize CX. While
the majority of researchers, for example Pandey and Chawla [27], used enjoyment to
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measure CX, other researchers used this factor as an antecedent [17]. It follows that
there is little agreement on how to measure CX in retail and what drives it.
CX is always a customers reaction to a customer-company interaction. CX is
highly perceptive and based on the customers psychology. However, the degree of
this effect may vary. Thus, we propose to categorize CX determinants in two
categories. The PPCXD, which can hardly be influenced by companies and can be
measured independently from actual interaction. The literature review revealed
PPCXD like sociodemographic factors (e.g. age, gender, education, income), but also
culture, mood, time consciousness, and customer dynamics like awareness or
commitment to learning. The second category of factors, the IPCXD, can only be
measured based on actual interaction with a company. These factors can, at least
partly, be influenced by companies. This category is based on customer perception,
for example the perception of the channel (e.g. website or store layout), or product, as
well as gamification features, and benefits from technology use (e.g. perceived
telepresence or control). These findings are in line with Verhoef et al. [8] who argued
that CX can only be partly controlled by the company.
5 Conclusion and Outlook
With an increasing number of channels available to customers and the influence on
factors like satisfaction and loyalty, CX has become increasingly important in the past
decade. First, we revealed 41 factors that researchers used to operationalize CX as
well as 27 psychological determinants of CX. The vast majority of factors suggest
that there is no clear understanding of how CX is to be conceptualized and hence
operationalized. Thus, there is a need for a clearer understanding of what an
experience is and how to measure it. This finding is in line with calls for a robust
measurement of CX, for example, by Lemon and Verhoef [4].
Second, CX is always an interaction between a company and its customers. It is
clear that it is impossible for customers to just switch off individual internal
processing when evaluating CX. Hence, customer psychology always plays a role
during the company-customer interaction. Yet, there is a difference in how significant
this influence is. Accordingly, we argue that there are two categories of psychological
factors influencing CX, namely IPCXD (can hardly or not at all be influenced by a
company) and IPCXD (even if not fully, can be better influenced by the company). In
line with this finding, more research is needed to fully understand the relationships
between those two categories and how these relationships can be used to optimize
CX. Also, future research could additionally include psychological determinants of
retail CX focusing on multi-channel behavior in the shopping context (e.g.
personality). Since most of the studies used surveys to examine CX, we propose to
widen the approach by using methods like facial and eye-tracking, or other
physiological measurements including heart rate, skin conductance and other
measures related to autonomic nervous system [4247].
Although we believe that the findings of this paper are comprehensive, it is
possible that there are more papers on psychological determinants of CX in the
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context of retail. Additionally, we note that we purposely only looked for papers with
CX context. Papers focusing, for example, on brand experience were not considered.
Also, we focused on retail context, hence, we eliminated papers from, for example,
the finance and banking sector.
Acknowledgments
This study has been conducted within the training network project PERFORM funded
by the European Unions Horizon 2020 research and innovation program under the
Marie Skłodowska-Curie grant agreement No. 765395. Note: This research reflects
only the authors view. The Agency is not responsible for any use that may be made
of the information it contains.
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