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IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 52, NO. 4, NOVEMBER 2005 461 A Consumer Perspective of E-Service Quality Xiaoni Zhang and Victor R. Prybutok, Member, IEEE Abstract—E-service is an emerging and rapidly evolving area doing business, improve customer satisfaction, and attract new as d...

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A Consumer Perspective of E-Service Quality Victor Prybutok IEEE Transactions on Engineering Management

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IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 52, NO. 4, NOVEMBER 2005

461

A Consumer Perspective of E-Service Quality Xiaoni Zhang and Victor R. Prybutok, Member, IEEE

Abstract—E-service is an emerging and rapidly evolving area as demonstrated by new technological innovations introduced to improve e-service. Motivated by the growing interest in online commerce, we focus our research questions on examining the factors that contribute to e-service, the relationships among these factors and the consumers’ attitude toward e-service. To explore answers to our research questions, we developed an e-service model. Specifically, our proposed model consists of such constructs as individual differences, e-service convenience, Web site service quality, risk, e-satisfaction, and intention. We develop an e-service quality survey instrument and use empirical data to validate the instrument. The results of our empirical study validate our eight hypotheses. We confirm seven of the eight hypotheses. One hypothesis that tested individual differences and service convenience was not confirmed. However, we found that service convenience, Web site service quality, and risk are significant factors affecting consumers’ satisfaction level, which in turn affects intention. The findings suggest that managers need to understand e-convenience from the consumers’ perspective. In order to provide better services for users, companies need to invest in Web site service quality design and evaluation, and at the same time, control the perceived risk associated with using it. Index Terms—E-satisfaction, e-service, e-service quality, individual differences, intention.

I. INTRODUCTION S e-commerce proliferates, companies are increasingly turning to the Internet to market products and services. However, the effectiveness of such online commerce systems depends on the degree of comfort that customers feel with the technology-based interactions between the customers and companies. Service in e-commerce is a function of how the online store facilitates efficient and effective shopping, purchasing and delivery of products and services. Because of the proliferation and increasing reliance on corporate Web sites, researchers and practitioners are equally concerned with the issue of understanding and managing e-service. E-service and its providers represent the evolution of e-commerce [103]. As e-services continue their growth, technology executives and their budgets are under strain. Current customers and the livelihood of the organization require 24 7 access, reliability, and attention. Some organizations have successfully leveraged technology to create new revenue streams, lower the cost of

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Manuscript received November 1, 2004; revised February 1, 2005 and March 1, 2005. Review of this manuscript was arranged by Department Editor A. Chakrabarti. X. Zhang is with the Department of Information Systems, Northern Kentucky University, Highland Heights, KY 41099 USA (e-mail: [email protected]). V. R. Prybutok is with the Information Technology and Decision Sciences Department, College of Business Administration, University of North Texas, Denton, TX 76203 USA. Digital Object Identifier 10.1109/TEM.2005.856568

doing business, improve customer satisfaction, and attract new customers [26]. Some of these organizations work with consulting companies that specialize in building e-commerce sites that allow companies to expand their capabilities and interact more effectively with their online customers. Although there is a considerable body of research about consumer service attitudes relevant to physical stores, it remains unknown how those same consumer attitudes transfer to online stores. Also, missing from the literature is an assessment of how individual differences impact e-service. Examining the emerging issues in e-service provides insights and practical considerations for e-service providers. Motivated by the growing interest in online commerce, we intend to focus our research questions on examining the factors that contribute to e-service, the relationships among these factors, and consumers’ attitudes toward e-service. Different terms for e-service exist to denote differences in the type or application of service. Some authors use net-based customer service systems, while others use e-service. According to Brohman et al. [19], “a net-based customer service system delivers service to customers either directly or indirectly.” Direct delivery of service is through a browser, PDA, or cell phone; indirect delivery of service is via a customer service representative or agent [19]. Gartner defined “e-service” as including the processes, policies, procedures, people, tools, and technologies that enable enterprises to provide assisted and unassisted customer service using the Internet as its platform. The definitions of net-based customer system and e-service both state that service is delivered via browser interface or human agents. However, Brohman et al. definition includes only tools (browser, PDA, cell phone), whereas Gartner’s definition contains a more complete description of e-service including processes, policies, procedures, people, tools, and technologies. In this work we adopted Gartner’s definition of e-service. The organization of this paper is described below. Section II contains the background and theoretical support for our research model and testable hypotheses. Section III proposes the research methodology and measures. Section IV describes the data collection, analysis, and model testing. Section V discusses the results and Section VI contains the conclusion and includes managerial implications of the findings and possible future research areas. II. BACKGROUND AND RESEARCH MODEL A. e-Service The Berry et al. [13], service convenience model Web site characteristics, firm related factors, and individual differences

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IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 52, NO. 4, NOVEMBER 2005

are antecedents of service convenience. Berry et al. also conceptualize service convenience as the consumers’ perception of the time and effort in buying or using a service. Berry et al. model posits that perceptions of service convenience affect consumers’ overall evaluation of the service, including satisfaction with the service and perceived service quality and fairness. Consumers’ perceptions of service convenience directly affect their perceptions of a firm’s service quality and their satisfaction with a specific encounter or experience. The theoretical rationale for this research builds upon two major areas, the Berry et al. [13] conceptual model and prior information systems research about e-service evaluation methods, because e-service encompasses marketing and management information systems (ISs) [114]. This reasoning is supported by Hoffman’s [63] recent paper—“ .” In essence, the goal of e-service is to deliver consumers an extraordinary experience from online vendors via real-time or two-way interactive information [100]. Exploratory and fragmented studies on e-service issues exist. Some of this e-service research is applied and examines issues such as profiling e-service customers to improve retention [18]. Other areas of e-service research include e-service dimensions and measures [76], [110], e-service adoption issues [114], e-service quality, and classification schemes for technology management [87]. In summary, there is a scattered group of prior studies on e-service and the body of work is difficult to generalize relative to e-service outcomes. In an effort to better explain e-service and further explore the interrelationships it involves, we propose a new model. B. Research Model To better understand e-services on the Internet, we utilize concepts from the marketing literature relevant to services research, and modify these as suggested by studies in the IS area [63], [114]. Because e-service lacks the wealth of research found on the traditional brick-and-mortar stores, we explore the ability to transfer this more traditional research into the e-service arena. Berry et al. [13] developed a conceptual model for service convenience. In Berry et al. [13], work service convenience is posited to affect satisfaction and service quality. Our model is different than Berry et al. because we modified the model to obtain a more focused e-services approach and to make empirical results easier to interpret. However, we did use several of their constructs. Several published works in IS are consistent with Berry et al.’s emphasis on service convenience and show that consumers go online because of the convenience [67], [81]. Because the Berry et al. conceptual model is broad, we wanted to narrow our study’s focus and at the same time integrate an under researched concept—consumer convenience online service—and selected Web site characteristics, service convenience, and satisfaction from the Berry et al. model. In our proposed model, we integrated constructs from both IS and marketing. The online environment brings unique characteristics that present important considerations relevant to

investigating the transference of the available research from traditional stores. C. Individual Differences—PC Application Skills Individual differences are believed to influence consumer behavior and attitudes [32], [56], [70]. In the marketing literature, demographic variables are shown to explain consumers’ attitude toward inconvenience [67], [77]. However, understanding the individual and their role as a consumer is a potential key issue in the study of consumer behavior [10]. Some researchers attribute individual differences to shopping style [12], [54]. In IS, empirical research shows a statistically significant relationship between individual differences and IT acceptance, as suggested in the technology acceptance model (TAM) [1], [59]. However, individual differences were operationalized differently in prior studies [54], [61]. Some researchers use self efficacy [65], but others use demographic variables [49]. Hong et al. [65] show that demographic variables are important determinants of perceived ease of use. Ford et al. [49] show that there is a relationship between Internet searching behavior and individual differences. In today’s networked economy, ideas that challenge existing business models and paradigms are becoming increasingly important. Garfield et al. [54] show that individual differences, groupware-based creativity techniques, and ideas from others influenced the ideas that individuals generated. Alford and Biswas [3] explore the role of individual difference variables with search intention and purchase intention. In their work, individual difference variables are operationalized with price consciousness and sale proneness. Their results suggest that consumers’ level of sale proneness influences search intention and purchase intention, while price consciousness influences only search intention. Ratner and Kahn [108] used individual differences as a moderating variable in predicting consumption decisions. We define individual differences as the confidence in using PC applications. We use PC application skills as the relevant measure of individual difference because in an e-service environment, computing skills are essential to effectively use e-services. It is assumed that experienced computer users can easily teach themselves about using e-services and quickly get around on the e-service Web site. However, novice users or first time users may struggle in finding the needed information to move around or can even become lost on e-service sites. Recently, Berry et al. [13] conceptualized the link between individual difference and service convenience. We anticipate that individual differences are correlated with e-convenience. Building upon these works that address individual differences within the study of consumer behavior, we extend the work and direct it to the Internet in an e-service context. As a result of this extension, we propose the following hypothesis. H1: Individual PC skill differences are positively associated with e-service convenience. D. Service Convenience Businesses make efforts to satisfy customers by providing convenience. Convenience adds value [8] and increases market

ZHANG AND PRYBUTOK: A CONSUMER PERSPECTIVE OF E-SERVICE QUALITY

efficacy [27]. But convenience is a multidimensional construct that is not clearly defined and operationalized [20]. Seiders et al. [115] propose four forms of convenience: access convenience, search convenience, possession convenience, and transaction convenience. Access convenience concerns the speed and ease with which consumers can contact a retailer in person, or via some communication media such as phones, faxes, or computers. Search convenience is the speed and ease with which consumers find what they want to buy. Possession convenience concerns the speed and ease with which consumers can obtain desired products. Transaction convenience concerns the speed and ease with which consumers can effect or amend transactions. Of these four forms of convenience, access convenience is the prerequisite to the other three forms of convenience. Location convenience is touted as an important competitive factor in retailing and services [74]. In the online environment, consumers can use online services anytime from any place. While traditional location convenience is not relevant to the online environment, convenience still relates within the context of the availability of a Web site. As long as the Web site is available and accessible, location convenience is provided to consumers. Convenience related concepts include decision convenience, access convenience, transaction convenience, benefit convenience, and post benefit convenience[13]. Kim et al. [75] define functional convenience as how convenient it is to process a transaction on the Internet. Kim et al. also show that convenience positively affects customer satisfaction. Customer convenience drives innovation as retailers seek approaches to streamline, consolidate, and simplify their shopping experiences. By saving the customer’s time and energy, retailers increase the value of their market offerings. Researchers link convenience to various aspects of business performance measures, such as satisfaction and customer retention [20], [109]. Service convenience and service quality were connected in the auto [5] and apparel industries [52]. Torkzadeh and Dhillon [123] identified convenience as one of the success factors in e-commerce. Burke [21] found that consumers are generally satisfied with the convenience, quality, selection, and value provided by retailers today. Burke also shows that consumers are less satisfied with the level of service provided, the availability of product information, and the speed of the shopping process. These findings suggest that new technologies can enhance the shopping experience, but applications must be tailored to the unique requirements of consumer segments and product categories to create the desired level of satisfaction. Additionally, Srinivasan [120] shows that convenience is a factor that potentially impacts satisfaction and that, in turn, affects intention. Building upon this prior work, we propose hypothesis H2. H2: E-service convenience is positively associated with e-satisfaction. Consumers demand convenience and providing convenience requires service improvement [20]. Consumers’ experience of e-service is through browsers—the GUI interface. Thus, consumers’ evaluation of e-service quality is based on their

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experience with the interface. If the interface is designed for convenient and easy use, consumers will appreciate e-service quality provided by the browsers. Convenience is one reason consumers shop online [81] and consumers take convenience into consideration when they assess service quality [134], [135]. Furthermore, Berry et al. [13] suggest that convenience is the antecedent of service quality. Based on this prior support, we propose the following. H3: E-service convenience is positively associated with Web site service quality. E. Satisfaction and Intention Customer satisfaction is conceptualized as an outcome of exceeding expectations [97], [98]. It is defined as “ a judgment that a product or service feature, or the product or service itself, provided (or is providing) a pleasurable level of consumption-related fulfillment, including levels of under or over fulfillment” [97, p. 13]. Research suggests that satisfaction with the purchase decision relates to customer attitudes and behavior. Satisfaction is a function of expectations and disconfirmation. Some studies use one item to measure overall satisfaction [116], while others use multiple items to measure satisfaction [75], [98]. Behavioral intentions “can be viewed as indicators that signal whether customers will remain with or defect from the company” [138, p. 33]. Zeithaml et al. suggest that loyalty is part of intention [138]. Loyalty is defined as the consumer’s commitment to a company [37] or the intention to maintain an ongoing relationship with a service provider [117], [120]. Marketing studies also address the loyalty building process [53], [90], [96]. Heskett [60] shows that different forms of loyalty exist: loyalty (repeat purchase), commitment (willingness to refer others to a product or service), apostle-like behavior (willingness to convince others to use a product or service), and ownership (willingness to recommend product or service improvements). Satisfaction with a product promotes repeat purchase, acceptance of the product(s) in the same product line, and favorable word-of-mouth [27]. This relationship between satisfaction and intention applies to both online and offline businesses [109], [110]. Kim and Lee [75] found causal relationships between user satisfaction and the customer’s intention to be loyal in virtual malls, online stock brokerages, search portals and online network games. Namasivayam [92] showed that the customers’ satisfaction with service exchanges relates to the intention to use a service. Chiou [33] confirmed that satisfaction with an Internet service provider (ISP) relates to loyalty to that provider. The relationship between satisfaction and intention is well established and similarly it is established that e-satisfaction has an impact on intention [6], [109]. In the online service environment, the nature of the exchange with customers is related to maintaining long-term relationships with them [116]. Building on this prior research that establishes the relationship between satisfaction and intention in e-services setting, we test the hypothesis that e-satisfaction is related to the likelihood to purchase and the associated consumer intention.

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H4: E-satisfaction is positively associated with intention. F. Perceived Risk Perceived risk is defined as the likelihood of experiencing loss from engaging in an activity. This definition is consistent with Bauer’s [9] definition that perceived risk is a consumer’s subjective belief in the potential to suffer a loss in pursuit of a desired outcome. Perceived risk affects the consumers’ adoption of new retail innovations [41]. In this context, Internet risk has several different meanings. Because the Internet is an area of innovation, the potential for failure exists [61]. Jar...