Online Service Failure: Understanding the Building Blocks of Effective Recovery Strategy

Introduction

The online environment has revealed the advantages of mass marketing, permitting extended customer targeting (Poddar et al., 2009; Azemi & Ozuem, 2016). While a growing number of businesses are adopting e-tailing to expand beyond isolated markets, luxury businesses are still debating over a brick-and-mortar versus online approach (Gu & Ye, 2014; Felix et al., 2016; Ozuem & Azemi, 2018). Quach and Thaichon (2018) describe luxury brands across four resources (love, status, information, services), highlighting customers’ affection (i.e., love) for the product and the prestige (i.e., status) they gain from luxury product ownership as two main resources to evaluate customers’ satisfaction. They define information and services as means to support the customers’ buying process. Online provider-customer collaboration acknowledges a human-free interaction, recognizing customers’ structured online purchasing behavior (Weitzl & Hutzinger, 2017). This conveys skepticism that e-tailing could serve an environment that reaches affection and love. It implies an increased risk of dissatisfaction among online luxury customers, defined by services marketing scholars as the service failure phenomenon (Choi & Mattila, 2008; Chuang et al., 2012). While there is an established conceptual clarification of the recovery strategy types applicable to service failures, a favorable application of recovery strategies seems yet to be recognized (Hess et al., 2003; Ringberg et al., 2007). As Hazée et al. (2017) argue, ‘the literature seems to have taken for granted that organizations could apply the same recovery options’ (pp. 101-102). This leads to the double deviation scenario, which represents customers’ extended dissatisfaction with the company after the recovery strategy is experienced (Casado-Diaz & Nicolau-Gonzalbez, 2009). Luxury companies’ efforts to alter customer dissatisfaction into the service recovery paradox (i.e.,customers’ increased satisfaction with the company after the recovery rather than prior to the failure) seem evident (Matos et al., 2007). However, driven by the high product quality and impulsive purchasing novelties, the detriments of online service failure in online luxury businesses seem to foster the awakening of a double deviation scenario over the service recovery paradox. That being said, online luxury customers have higher recovery expectations, calling for providers to maximize the recovery effort.