A Study of Antecedents of Switching Cost and Customer Retention in Social Commerce

A Study of Antecedents of Switching Cost and Customer Retention in Social Commerce

Youngkeun Choi
Copyright: © 2020 |Pages: 14
DOI: 10.4018/IJEBR.2020100104
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Abstract

The focus of this study is on how switching costs engages the customer to stay. By proposing the concepts of switching costs as different ways to provide psychological experience, this study develops a model that explores the antecedents of switching cost and its role in explaining customer retention in social commerce. For this, this study surveys 352 consumers using social commerce in Korea and analyzes the data using PLS-SEM. In the results, first, interactivity, sociability, social tie, and social identity among all of the sub-factors of switching cost increase switching cost. Second, switching costs increases customer retention. Finally, interactivity and social identity among the antecedents of switching costs increase customer retention through switching costs. The findings contribute to research on social commerce by paying scholarly attention to the psychological perspective characterized by switching costs.
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1. Introduction

With the emergence of social media concepts and tools, new developments have been made that affect e-commerce (Ikumoro, & Jawad, 2019). Consumers must be actively involved in buying and selling products and services in online markets and communities (Huang & Benyoucef, 2015). This new phenomenon is also referred to as social commerce (Hajli, 2014; 2019), where e-commerce uses social media tools and Web 2.0 technologies. Social commerce has a significant impact on social interaction between business processes and consumers (Spaulding, 2010; Faraoni et al., 2019). In fact, in this environment, consumers may be exposed to more social and collaborative online shopping experiences to gather aggregated information to understand their purchases better and to support more accurate shopping decisions (Dennison et al., 2009). Online merchants can better serve their customers by identifying consumer behavior, preferences, and expectations (Constantinides et al., 2008). Unlike traditional e-commerce, which focuses on improving the efficiency of online shopping, social commerce offers a rich social, interactive, and collaborative online shopping experience (Yang et al., 2015). In this way, e-commerce can be used to create new business opportunities (Yang et al., 2015), increase consumer participation (Guo & Barnes, 2011; Sadovykh et al., 2015), support product, and brand development (Huang, 2012).

Social media, Web 2.0 (Hajli, 2014) and consumer impacts related to the context of e-commerce such as consumer attitudes (Hassanein & Head, 2007; Seyyedamiri, & Tajrobehkar, 2019), and satisfaction (Bai et al., 2005) emphasizes the importance of designing quality social commerce websites (Hernández et al., 2009). Website design has a significant impact on consumer interaction with social commerce (Cebi, 2013). Consumer intentions are particularly influenced by the quality of the social commerce website design (Curty & Zhang, 2013).

The quality of the social commerce website design that creates a memorable and lasting consumer experience has been emphasized (Pine & Gilmore, 1998). Recently, social commerce, combined with information and communication technology (IT), has strengthened its function. Today's new and advanced IT generally provides a more immersive experience that promotes the consumer experience and increases the demand for goods and services (Pine & Gilmore, 1998). In this situation, social commerce companies around the world actively developed and provided a variety of information services (IS) that provide consumers with information and enjoyment and ultimately enhanced their own experience.

Some scholars believe that switching costs include not only objectively measurable monetary costs but also time and psychological efforts to confront uncertainty with new service providers (Dick & Basu, 1994). Therefore, the conversion cost is partly customer-specific. Also, switching costs would be created by suppliers using personalization pages, e-communities, recommendation systems, and one-click technology, etc. (Xue et al., 2006). Hence, switching costs could be supplier-made. Otherwise, the sources of switching costs to customers in e-commerce would be different in the telecommunication sectors (Park & Kim, 2003). For example, if your customers have been using Gmail for a long time, they will be using their best efforts to notify their friends/relatives and will not change their mail.

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