An Empirical Study on the Customer Channel Choice Behavior in the Overall Process of Shopping Under O2O Mode

Introduction

O2O is a business mode combining online with offline physical channels, in this mode, customers can transfer freely from one channel to another channel at different stages of a transaction, or trade in both channels. It has been highly regarded by customers because it combines the ability to save time and money through the online channels, with the service advantages in the offline channels. Overall, O2O mode is able to bring more conveniences to the customers. According to statistics from iResearch (http://report.iresearch.cn/report/201509/2443.shtml) in 2015, the penetration of O2O to customers in china is close to 40%. Many retailers also have wholly adopted the transformation from a traditional mode to O2O mode. Taking China’s top one hundred chain enterprises as an example, 82% of the physical retail enterprises have developed e-commerce business, while e-commerce giants like Alibaba and Jingdong have made the layout of offline resources to promote the integration of online and offline resources. iResearch estimated that the O2O market size of the retail industry in 2015 reached 465.54 billion Yuan. Although O2O mode has been widely used and praised upon, there are actually a lot conflicts between the two channels, which jeopardize the possibilities to smoothly integrate. Two of the channel conflicts are: the quality of products provided by the channel fail to meet customers’ demand, the loss of customers during the transfer from one channel to another. Issues as such make many O2O retailers that rose in the boom suffer hardships today. This paper argues that the main reason for these problems is that retailers failed to take notes of their customers’ preferences to accurately launch products on both online and offline channel accordingly. In order to achieve maximum success and efficiency, it is important to the retailers to use the appropriate channel for their products. Therefore, to further this research, it is necessary to take a closer look at customers’ channel choice in relationship to the following three: customers’ characteristics, product quality, and channel attributes.

Many scholars have been conducting theoretical research on the customers’ channel choice behavior. Schoenbachler & Gordon (2002) analyzed the driving forces of customer multi-channel shopping, and concluded that customers’ perceived risks, shopping experiences and motivations, and the design of the website may have influences on customers’ multi-channel shopping behavior. Verhoef, Neslin, & Vroomen (2007) took the approach to study the characteristics and channel attributes on customers’ channel choice behavior at the searching and purchasing stages. Blattberg, Kim, & Neslin (2008) and Neslin et al (2006) came to conclusion that the factors influencing customer channel choice behavior includes channel attributes, customer characteristics, marketing strategies, and shopping traditions. Frasquet, Mollá, & Ruiz (2015) analyzed the reasons for customers to choose multiple channels at the three different stages of shopping: pre-purchasing, purchasing, and post-purchasing. These studies provided the underpinning theories for the research on the factors of multi-channel shopping and customer channel choice behavior. However, none of these studies considered product quality as a possible factor that affects customers’ channel choice behavior. Additionally, most of the studies do not systematically analyze customer channel choice throughout the continuous process of shopping. Although the analysis made by Frasquet, Mollá, & Ruiz (2015) touches upon the factors affecting customer channel choice at the three stages of shopping, it is limited to correlation analysis among the three. Besides, it does not empirically verify its findings, and fails to involve product quality in the factors affecting customer channel choice.

Based on the above analysis of the previous researches, this study attempts to analyze how product quality, channel attributes, and customer characteristics affect customer channel choice behavior in the whole process of shopping.