Service failures in offline and online retail settings

Creating a positive customer experience and providing a high service quality is crucial for service providers. Therefore, a lot of time and effort is spent on avoiding service failures along the customer journey. However, due to limited resources (e.g. personal, goods, etc.) and unforeseen events (e.g. staff sickness, crises, etc.), the service delivery process is destined to fail. Hence, service providers increasingly rely on service recovery measures. Since there are situations where recovery measures are not feasible either (e.g. time consuming, cost-intensive), we need to examine specific service failure situations more closely. Thus, this thesis explores outcome and moderating factors in the context of offline and online service failures in retail environments.
Within this thesis, three scenario-based experiments, conducted among German (nproject1=3,353) and UK (nproject2=758; nproject3=3,544) consumers, are described. Therein, the focus was on store-based grocery (Project 1), online fashion (Project 2) and do-it-yourself (DIY) (Project 3) retailing.
The findings suggest that service failures lead not only to short-term (word-of-mouth) but also to long-term (patronage intention) consequences. There are types of service failures which are perceived to be more severe than others. When a service failure is caused by the retailer, the perception of it is more severe and customers’ expectations towards recovery are higher. Service failures of high importance products (promoted or preferred products) and high involvement products (expensive, not every day buys) are perceived as more severe in comparison to those of low importance and low involvement ones. The results reveal that the effect of service failures is fuelled by previous expectations and previous (shopping) experiences. Finally, the analysis shows that the provision of recovery measures decreases the effect of service failures. In not every situation is the most elaborate measure (apology and justification from staff) the most effective; sometimes, a simple measure (note with apology) is sufficient.
This thesis also investigates managerial recommendations for practitioners. When a service failure occurs, one should pay immediate attention to avoid long-term consequences. It is even better to manage customers' expectations before a service failure occurs, by pre-informing the customer beforehand. Not all service failures should receive the same attention. High importance products and high involvement buying processes should attract particular attention. Also, inexperienced shoppers should receive a faultless customer experience, as failures are particularly serious in this case. Moreover, one should concentrate on simple recovery measures, and only take enhanced ones if they provide an improvement.