Daniel Ray

The Effects of Apologies for Service Failures in the Global Online Retail

ABSTRACT Virtually all sources on service recovery stress the importance of offering an apology to complaining customers. To date, however, our understanding of who should offer the apology and how to offer the apology is still limited. Taking a cross-cultural perspective, Study 1 shows that Eastern customers attach more value to a manager (vis-à-vis a frontline employee) offering an apology than Western customers in an offline retailing context, but not in an online retailing context. In an online setting, Study 2 further extends these insights by showing that the status of service personnel matters for Eastern customers, but only if the apology is provided publicly on social media and not if the apology is provided online privately. Global e-commerce managers can benefit from these findings when developing their service recovery strategies. By demonstrating that recovery strategies that are proposed and tested in offline settings are non transferrable to online settings, this article provides a clearer understanding of service recovery across online and offline channels. Based on face theory, this research highlights the public versus private nature of an apology in a global online retailing context, thus contributing to the emerging research in online service recovery.

(Abstract) Service Recovery in Online Medium: A Cost-Effective Answer in Cross-Cultural Settings

Past research has shown that the status of the apologizing service personnel in offline medium impacts fairness perceptions of service recovery differently in cross-cultural settings. The tremendous growth in the global online retailing industry with their ever-increasing consumer base belonging to Eastern cultures makes it imperative to find a cost-effective way to manage service recovery from this cultural group about which there is very little literature. This paper addresses this issue by first showing that what works for Eastern consumers in offline service recovery may not necessarily work in online without suitable modifications. We then further reveal a novel cost-effective way using social media to increase fairness perceptions even in the impersonal online medium. Two experimental studies were conducted using nonstudent samples from a Western country (Germany) and two Eastern countries (India and the Philippines). Our empirical findings indicate that a public apology from a high-status service provider in the online medium that is conveyed through social media would result in higher justice perceptions for consumers in Eastern cultures as compared to Western cultures. For managers of global online retailers, we thus show a powerful yet cost-effective way to deal with consumer complaints.

Multilevel Modeling for Marketing: A Primer

Recent marketing literature relies more and more on multilevel models. Yet, this method, which applies to data structured in levels (e.g., consumers, nested within stores, themselves nested within retailers), is not straightforward to understand and to implement. Through a marketing example, the present text introduces the reader to the objectives, interest and limits of multilevel modeling.