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Brands as substitutes for the need for touch in online shopping
Journal of Retailing and Consumer Services 27 (2015) 121–125
Contents lists available at ScienceDirect
Journal of Retailing and Consumer Services journal homepage: www.elsevier.com/locate/jretconser
Brands as substitutes for the need for touch in online shopping Óscar González-Benito a, Mercedes Martos-Partal a,n, Sonia San Martín b a b
Universidad de Salamanca, Spain Universidad de Burgos, Spain
art ic l e i nf o
a b s t r a c t
Article history: Received 6 July 2015 Received in revised form 27 July 2015 Accepted 29 July 2015
This article addresses the potential of reputable brands to overcome the lack of tangibility that characterizes the process of e-commerce through an experiment-based analysis. In a sequential argument, the authors propose that (1) the brand becomes more important in online than in offline channels, as a consequence of the intangibility or lack of physical contact in online purchasing processes; (2) the limitations associated with the need for touch and the lack of access to the physical product during the buying process does not have equal importance across all product categories and (3) the role of the brand in online channels thus is more relevant if the product category is associated with a higher need for touch. The study based on the experimental design reveals that leading brands enjoy an advanta in consumers' quality assessments, regardless of the objective attributes that characterize the products. This advantage may be greater in online channels, though only for product categories for which the lack of physical contact with the product during the purchase process is an important limitation. In such cases, brand associations can compensate for intangibility during purchase. & 2015 Elsevier Ltd. All rights reserved.
Keywords: Brand reputation e-Commerce Need for touch Product category
1. Introduction The evaluation of alternatives is a key stage in the consumer purchase process. The intensity with which this evaluation gets performed depends on multiple factors, including consumer experience, perceived purchase risk, product type, the recommendations of other consumers, or the purchase context (Darley et al., 2010; Engel et al., 1978). Physical contact with products is an important source of information for consumers during the stages prior to the purchase decision, especially for evaluating different alternatives, establishing preferences, and making choices (Childers and Peck, 2010; Peck and Childers, 2003a, 2003b; Yazdanparast and Spears, 2012 and 2013). The need for physical interaction also is known as the need for touch (Peck and Childers, 2003a). However, any opportunity to interact physically with the product prior to purchase disappears in an electronic commerce context. Consumers have access to technical product descriptions and can view the products, sometimes with an extraordinary level of detail, but cannot touch or feel them physically. This lack of physical contact during the buying process is a key inhibitor of uses of electronic commerce (eMarketer, 2011; ONTSI, 2012). Moreover, electronic shopping sometimes is based on consumers' previous experiences in traditional outlets, which provide plenty n Correspondence to: Departamento de Administracióny Economía de la Empresa, Campus Miguel de Unamuno, 37007 Salamanca, Spain. Fax: þ 34 923294715x3124. E-mail address: [email protected] (M. Martos-Partal).
http://dx.doi.org/10.1016/j.jretconser.2015.07.015 0969-6989/& 2015 Elsevier Ltd. All rights reserved.
of opportunities to examine product alternatives (Balasubramanian et al., 2005; Cho and Workman 2011; Hsiao et al., 2012; Pauwels et al., 2011). The intangibility inherent to the online purchase process requires that consumers pay more attention to other indicators of quality and product performance. Therefore, the role of the brand should become more relevant, such that brand reputation even might compensate for the absence of physical contact with products. The brand invokes associations that build trust, reduce perceived risk, and simplify the buying process (Aaker, 1994; Erdem and Swait, 1998; Keller, 1993). Some studies indicate advantages enjoyed by the best known and most reputable brands in virtual environments (Ho-Dac et al., 2013). Evidence also suggests that these advantages are greater online than they would be in traditional channels (Andrews and Currim 2004; Degeratu et al., 2000). From a more general point of view, brand loyalty is higher in online channels (Arce-Urriza and Cebollada 2012; Chu et al., 2010; Danaher et al., 2003). However, intangibility does not have the same importance in all shopping situations and for all product categories. In some cases, products are highly standardized, and consumers have enough experience that they do not need to touch them. In other cases, physical product evaluations do not provide relevant information (Peck and Childers, 2003b). For example, physical inspection of the packaging of many food products does not provide much information beyond product pictures or an ingredient list. The feel and taste of these products are central to post-purchase
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evaluations, though physical interaction with products at the point of sale often does not provide precise information in this regard. In contrast, the physical analysis of garments can be critical to purchase decisions (Cho and Workman, 2011), because touching the product helps consumers appreciate the quality of fabric and seams, and trying on the garment allows them to assess whether it fulfills their intended purpose. The degree of uncertainty associated with the intangibility of the online purchase process thus likely differs from one product to another, as should the importance of branding in electronic channels. We expect that the brand’s contribution to the assessment of alternatives is lesser for products for which the physical examination of the product is less important, that is, for products with less need for touch, because touching does not add relevant information to support a decision. The brand’s legitimizing role thus should be more prominent in online purchasing decisions when physical access to the product enables a consumer to discriminate among purchase alternatives. We address the relationship among e-commerce, the intangibility of the buying process, and brand reputation by proposing a moderating role of the product category in comparisons of the effect of brand reputation across offline and online channels. At a theoretical level, this study develops a sequential argument: (1) The brand becomes more important in online environments as a consequence of the intangibility of the purchase process. (2) The intangibility of products in online shopping processes imposes varying limitations of differential importance across product categories. (3) The role of the brand in online environments is more relevant when the product category is more limited by a lack of physical contact. We provide evidence of this sequence through an empirical study based on an experiment.
2. Theoretical framework 2.1. The role of the brand: online vs. offline channels A brand is a name, term, symbol, or any other element that serves to distinguish the goods and services of one seller from other vendors (AMA, 2013). It influences both consumer decision making and purchasing behavior (Aaker, 1994; Erdem and Swait, 1998; Keller, 1993). Consumers use brands as signals to infer quality and other desired benefits when they lack previous experience or cannot conduct a thorough evaluation of products (Png and Reitman, 1995; Ubilava et al., 2011; Wernerfelt, 1988). This potential a brand has to influence consumer perceptions and improve performance entails its brand equity. Erdem and Swait (1998) propose a descriptive model of brand equity in an information economy, such that they account for the imperfect and asymmetric information the consumer has. In the buying process, consumers are uncertain about the attributes or benefits of the products they consider purchasing, because imperfect, asymmetric information characterizes most product markets. Firms thus can behave opportunistically because they are more informed about their own products than consumers are. Brands represent the signals the firm sends about the product’s position on the market, associated with certain levels of quality or other desirable benefits. Their signals also help reduce perceived risk and the costs associated with searching for information. In short, reputed brands are a credible signal to the market regarding the advantages and benefits of the product, so they affect consumers' evaluations (Erdem et al., 2004, 2006). In turn, we propose
an initial hypothesis that is not particularly original but offers a strong foundation for our subsequent predictions: H1. : Brands affect consumers' evaluations of products. The brand also remains a key competitive tool online (Brynjolfsson and Smith, 2000). Online channels differ from offline channels in their potential to provide information to help consumers make assessments (Alba et al., 1997). In online contexts, information is even more asymmetric and imperfect than in traditional channels, because they provide no opportunities to taste or touch the products or receive in-person advice from sellers. As it helps fill these information gaps, the brand becomes more important as an information signal, such that it enables consumers to make product evaluations. In other words, the brand acts as a signal that replaces the need for touch. Andrews and Currim (2004) also show that online consumers base their assessments on brands and consider fewer brands when they buy through that channel. Furthermore, Degeratu et al. (2000) propose that the brand has more impact online than in traditional channels, because of the greater uncertainty that characterizes purchasing in the former channel. Therefore, we propose: H2. : The influence of the brand on consumers' product evaluations is greater in online contexts than in offline contexts. 2.2. Difererences across product categories The problem of product intangibility during the buying process is a main differentiator between online and offline shopping. However, the incidence of this problem varies with the product type (Peck and Childers, 2003b). The consumer's need for touch depends on the prominence of tangible attributes in the product, such as when these attributes have the potential to discriminate the set of options available to the consumer. For example, most consumers perceive that clothes differ on tangible attributes such as texture, elasticity, or resistance, so they prefer to touch these products, to make an assessment and compare alternatives before buying. However, in product categories such as books, music, CDs, and packaged foods, consumers cannot discriminate among products using information obtained by touching the product, so this information becomes less necessary for decision making (McCabe and Nowlis, 2003; Childers and Peck, 2010). This reasoning leads to another hypothesis that is less original but still constitutes a starting point for a better understanding of our subsequent proposal: H3. : Product categories differ in terms of the importance of tangibility for their buying process. Because physical contact with the product prior to purchase is less relevant in some categories than in others, the disadvantage of the online channel also should differ across categories. The brand’s role as a substitute for the need for touch also varies from one product category to another. Its contribution as a signal of quality or other desirable benefits should be more important in online channels that increase the information asymmetry that consumers face; thus, the importance of the brand to a consumer buying a garment from an online store should be higher than it would be in a traditional store, because physical contact in the traditional store already provides the useful information for the purchase decision. In contrast, the importance of the brand to hygiene products is unlikely to be any higher in online contexts, because handling the product provides little information related to the buying process (unless consumers can test the product before buying). Degeratu et al. (2000) show the brand's role in online channels differs with the amount of information available to the consumer; Chu et al. (2010) indicate similar results in their analysis of consumers’
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brand loyalty. That is, consumers express greater loyalty in sensory categories, in which the consumer needs to touch or smell the product, than in non-sensory categories. Consumers use brand loyalty as a way to reduce their risk and uncertainty in the purchasing process, in that they lack information about sensory product purchases when they operate in an online context. H4. : The greater influence of the brand on consumers’ product evaluations in online contexts is enhanced in product categories for which tangibility is more important during the buying process.
3. Methodology 3.1. Research context and design To provide empirical evidence regarding the hypotheses, we performed a 2 2 2 experiment that combined three treatments: (1) leader versus non-leader brand, (2) online versus offline channel, and (3) product category with higher versus lower need for touch. A backpack represented the product with a higher need for touch, because the texture of the fabric, seam strength, and fit with personal anatomy are key attributes for this product that also are difficult to assess without physical contact. Sun lotion provides the product with a lower need for touch. Although clearly sensorial at the time of use, contact with it provides little information at the time of purchase. A total of 270 respondents participated in the study and tested both products. The other treatments were randomly assigned but controlled, to ensure similar sample sizes across treatments. In the offline treatment, the products were presented as they would be in a physical store, such that participants had the opportunity to interact physically with them. They also received the conventional technical information that accompanies each product. In the online treatment, the display mimicked a conventional online retailer, including images of the products and the same technical information. This design controls for the effect of physical contact with products (Peck and Childers, 2003b). For greater realism in the buying situation, we presented this purchase situation as part of a visit to a specialist sports retailer, Decathlon. Each product category also consisted of two brands. For the backpack, Nike was the reputable, leader brand, whereas Targus was the non-leading, less known brand (it is a private label of Decathlon). For sun lotion, Nivea was the leading brand and Aptonia was the less familiar brand (again, a private label of the retailer). To ensure the isolation of this treatment, we used the same product and technical information each time but manipulated the brand name. This procedure has proven validity for measuring brand equity and comparing national brands versus private labels (González-Benito et al., 2015; Richardson et al., 1994; Semeijn et al., 2004). In Table 1, we list the sample sizes for each treatment. Students in a Spanish university provided a suitable population for this research. The use of students is common in this type of research (Laroche et al., 2005; Yazdanparast and Spears, 2012 and 2013). Laroche et al. (2005) also cite three reasons for using student subjects in studies of online versus offline environments. Table 1 Sample size by treatment.
Backpack Sun lotion Total
Leader brand Follower brand Leader brand Follower brand
Online
Off-line
Total
69 69 69 69 276
66 66 66 66 264
135 135 135 135 540
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Table 2 Measure of the dependent variable: product evaluation. Factor
Item
Quality Quality is good It seems to be reliable nnn
Mean S.D.
Factor loading
3.56
0.88 0.92
3.56
0.89 0.92
Explained variance
Pearson's correlation
84.90%
0.70nnn
po 0.01.
First, students are familiar with the products studied. Second, it is likely that this population has experience with online shopping. Third, students are relatively homogeneous, particularly with regard to educational level and age, and controlling for these demographic variables provides a more robust test of our hypotheses. 3.2. Measures Product evaluations were measured with two items, focused on quality and reliability (Erdem et al., 2004, 2006). The responses used a five-point Likert scale (1 ¼“strongly disagree” to 5 ¼“strongly agree”). An exploratory factor analysis supported the unidimensionality of the scale, so we based our further analysis on the unique factor obtained. Table 2 contains the items, their descriptive statistics, and the outcome of the factor analysis. The experimental design assumes that the product types differ according to the importance of physical contact during the buying process (i.e., need for touch). To test this difference objectively, we asked participants to indicate their degree of agreement with a single item: “To buy this [backpack/sun lotion], I need to have the product in my hands.” These responses used a similar Likert-type scale. Finally, to control for the effect of consumers' profiles and previous experience, we collected information about the gender and age of each participant. The age category was fairly homogeneous, with an average of 21 years, and 65% of the sample were women. Because consumers also rely on their experience and prior knowledge during the search and evaluation process (Bettman et al., 1998; Lynch and Srull, 1982; Punj, 2012), we collected information about the respondents' familiarity with the retailer and products. For both variables, we used two-item scales and measured the responses using the same five-point Likert-type scale. The results from the respective factor analyses support unidimensionality, so we used these single factors, as we detail in Table 3.
4. Analysis and results In Table 4 we summarize the estimation results for the models we have proposed to test our hypotheses. As a contrast of the first two hypotheses, we estimated an initial regression model (Model 1) in which participants’ assessments depend solely on the control variables and the first two binary treatments, namely, leading versus unknown brand and online versus offline channel. We also included the interaction between the two treatments. The estimates for the control variables show that, though the variance in age is small, product evaluations tend to be worse as the age of participants increases. Those participants who are more familiar with the products also tend to provide more positive evaluations. Gender and familiarity with the retailer had no significant effects on perceived quality though. Turning to the effect of leading, reputable brands, we find that leading brands have a positive, significant effect (p o0.01) on
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Table 3 Measures of control variables. Factor
Item
Mean S.D.
Familiarity with retailer
I know the retailer's stores (Decathlon) I usually shop in the retailer’s stores (Decathlon) Familiarity with product I frequently use the product (backpack or sun lotion) I know the product options available in the market (backpack or sun lotion)
Variable Gender Age nnn
Description Dummy: 1 (male) 0 (female)
0.89 1.02 1.34 1.06
0.84 0.84 0.83 0.83
71.25
0.42nnn
69.31
0.38nnn
Mean S.D 0.35 0.48 20.93 3.64
p o0.01.
Table 4 Estimation results. Model 1
Constant Gender Age Familiarity with retailer Familiarity with product Online channel Leader brand Online channel leader brand F test R2 n
4.37 2.86 3.29 2.77
Factor loading Explained variance Pearson's correlation
Model 2 Backpack Sun lotion
Parameter difference
0.49nn 0.03 0.03nn 0.02 0.12nnn 0.31nnn 0.68nnn 0.04
0.77nnn 0.26 0.02 0.03nnn 0.01 0.11nnn 0.54nnn 0.08 0.38nn 0.96nnn 0.38n 0.29
nnn
nnn
nnn
0.16
0.18
types, along with tests for the differences of parameters between the two product types. The results show that the interaction between leading brand and online channel is positive and significant (p o0.10) in the backpack category, as well as significantly higher (p o0.05) than in the sun lotion category. These results support H4. Although we did not observe a greater advantage of leading brands in online channels in general (H2), this advantage clearly arises in specific categories that are characterized by a greater need for touch during the buying process.
nn nn
5. Conclusions
nn
po 0.10. p o0.05. p o0.01.
nn
nnn
evaluations of the products. Because our study featured the same product, just labeled with different brands, this result highlights the importance of branding. The brand reputation wrought by leading brands prompts a better assessment of their products, regardless their technical characteristics, in support of H1. This result also shows that evaluations of products in an online context are significantly worse than in an offline context. The possibility of physical contact with products improves product evaluation, whatever the brand. Regarding whether the brand effect differs between online and offline channels, we find that the interaction between the two treatments was not significant. The difference we predicted in H2 thus was not confirmed. Our data show that perceived quality and reliability derived from the brand does not increases in online channels, even when consumers have no physical contact with the product in these channels. To address the role of product category, we first must confirm whether the need for touch during the buying process differs between the two product categories. The importance that participants attribute to having the product on hand before making a decision varies significantly across products (mean comparison between dependent samples: t¼9.36, p o0.01). The average rating for the backpack was 3.99, compared with 3.23 for the lotion. These results confirm H3: The need for touch differs between product categories. In turn, we consider the interaction effect between the brand and the distribution channel. In H4 we proposed that brand has a more relevant role in online environments, at least for the backpack category, because tangibility is more important in this category. Therefore, we estimated a second model (Model 2) in which we considered the specific parameters for each of the product
This article has addressed the role of the brand as a signal of quality during the buying process, primarily by comparing online and offline channels. We argue that brands substitute for the lack of physical contact with products in online shopping settings, such that their role is more relevant. We also considered a comparison across different product categories, with the notion that product categories differ according to the need for physical contact they invoke during the buying process; therefore, the potential for brands to substitute for the need for touch should differ across product categories. Using an experimental design, we show that the most recognized brands exert a positive effect on product evaluations, regardless of the technical characteristics and other objective product attributes. This effect is not any stronger in the context of online shopping, though our findings show that it may be more intense in product categories in which there is a greater need for touch. We also confirm that the product categories differ in their level of need for touch and the extent to which consumers desire physical contact with the product during the buying process. These results demonstrate that building strong brands is a key competitive advantage for manufacturers. Strong brands are associated with quality and other desirable benefits, and therefore, they provoke better assessments by consumers. Brand reputation becomes even more crucial when selling products in electronic channels, at least if the product itself entails a greater need for touch prior to purchase. For such products, strong brands can make up for the intangibility of e-commerce, so this effort represents a key competitive strategy in such channels. Moreover, leading brands can leverage their competitive advantage to enhance their performance in the increasingly prominent realm of e-commerce. E-retailers need to make careful decisions regarding the configuration of the assortment, taking into account the nature of the product category. They should strengthen their focus on developing highly recognizable brands, because the lack of physical contact is an important purchase inhibitor in this shopping channel. However, the brand criterion may be less important if the
Ó. González-Benito et al. / Journal of Retailing and Consumer Services 27 (2015) 121–125
choice between online and offline shopping is not particularly affected by the opportunity to touch or feel the products. In any case, these results represent an initial response to an ongoing challenge. Our empirical study focuses exclusively on a particular segment of consumers in two product categories, and on two brands within each category. It would be helpful to consider other customer groups and new product categories, to provide greater validity to the findings. Our comparison of offline and online channels also focused exclusively on physical contact with the products. Research that considers experimental designs that provide greater realism in both offline and online shopping settings would also enhance the validity of our findings.
Acknowledgments This research was supported by Ministerio de Economía y Competitividad, Grant ECO2014-53060-R (Spain).
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Contents lists available at ScienceDirect
Journal of Retailing and Consumer Services journal homepage: www.elsevier.com/locate/jretconser
Brands as substitutes for the need for touch in online shopping Óscar González-Benito a, Mercedes Martos-Partal a,n, Sonia San Martín b a b
Universidad de Salamanca, Spain Universidad de Burgos, Spain
art ic l e i nf o
a b s t r a c t
Article history: Received 6 July 2015 Received in revised form 27 July 2015 Accepted 29 July 2015
This article addresses the potential of reputable brands to overcome the lack of tangibility that characterizes the process of e-commerce through an experiment-based analysis. In a sequential argument, the authors propose that (1) the brand becomes more important in online than in offline channels, as a consequence of the intangibility or lack of physical contact in online purchasing processes; (2) the limitations associated with the need for touch and the lack of access to the physical product during the buying process does not have equal importance across all product categories and (3) the role of the brand in online channels thus is more relevant if the product category is associated with a higher need for touch. The study based on the experimental design reveals that leading brands enjoy an advanta in consumers' quality assessments, regardless of the objective attributes that characterize the products. This advantage may be greater in online channels, though only for product categories for which the lack of physical contact with the product during the purchase process is an important limitation. In such cases, brand associations can compensate for intangibility during purchase. & 2015 Elsevier Ltd. All rights reserved.
Keywords: Brand reputation e-Commerce Need for touch Product category
1. Introduction The evaluation of alternatives is a key stage in the consumer purchase process. The intensity with which this evaluation gets performed depends on multiple factors, including consumer experience, perceived purchase risk, product type, the recommendations of other consumers, or the purchase context (Darley et al., 2010; Engel et al., 1978). Physical contact with products is an important source of information for consumers during the stages prior to the purchase decision, especially for evaluating different alternatives, establishing preferences, and making choices (Childers and Peck, 2010; Peck and Childers, 2003a, 2003b; Yazdanparast and Spears, 2012 and 2013). The need for physical interaction also is known as the need for touch (Peck and Childers, 2003a). However, any opportunity to interact physically with the product prior to purchase disappears in an electronic commerce context. Consumers have access to technical product descriptions and can view the products, sometimes with an extraordinary level of detail, but cannot touch or feel them physically. This lack of physical contact during the buying process is a key inhibitor of uses of electronic commerce (eMarketer, 2011; ONTSI, 2012). Moreover, electronic shopping sometimes is based on consumers' previous experiences in traditional outlets, which provide plenty n Correspondence to: Departamento de Administracióny Economía de la Empresa, Campus Miguel de Unamuno, 37007 Salamanca, Spain. Fax: þ 34 923294715x3124. E-mail address: [email protected] (M. Martos-Partal).
http://dx.doi.org/10.1016/j.jretconser.2015.07.015 0969-6989/& 2015 Elsevier Ltd. All rights reserved.
of opportunities to examine product alternatives (Balasubramanian et al., 2005; Cho and Workman 2011; Hsiao et al., 2012; Pauwels et al., 2011). The intangibility inherent to the online purchase process requires that consumers pay more attention to other indicators of quality and product performance. Therefore, the role of the brand should become more relevant, such that brand reputation even might compensate for the absence of physical contact with products. The brand invokes associations that build trust, reduce perceived risk, and simplify the buying process (Aaker, 1994; Erdem and Swait, 1998; Keller, 1993). Some studies indicate advantages enjoyed by the best known and most reputable brands in virtual environments (Ho-Dac et al., 2013). Evidence also suggests that these advantages are greater online than they would be in traditional channels (Andrews and Currim 2004; Degeratu et al., 2000). From a more general point of view, brand loyalty is higher in online channels (Arce-Urriza and Cebollada 2012; Chu et al., 2010; Danaher et al., 2003). However, intangibility does not have the same importance in all shopping situations and for all product categories. In some cases, products are highly standardized, and consumers have enough experience that they do not need to touch them. In other cases, physical product evaluations do not provide relevant information (Peck and Childers, 2003b). For example, physical inspection of the packaging of many food products does not provide much information beyond product pictures or an ingredient list. The feel and taste of these products are central to post-purchase
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evaluations, though physical interaction with products at the point of sale often does not provide precise information in this regard. In contrast, the physical analysis of garments can be critical to purchase decisions (Cho and Workman, 2011), because touching the product helps consumers appreciate the quality of fabric and seams, and trying on the garment allows them to assess whether it fulfills their intended purpose. The degree of uncertainty associated with the intangibility of the online purchase process thus likely differs from one product to another, as should the importance of branding in electronic channels. We expect that the brand’s contribution to the assessment of alternatives is lesser for products for which the physical examination of the product is less important, that is, for products with less need for touch, because touching does not add relevant information to support a decision. The brand’s legitimizing role thus should be more prominent in online purchasing decisions when physical access to the product enables a consumer to discriminate among purchase alternatives. We address the relationship among e-commerce, the intangibility of the buying process, and brand reputation by proposing a moderating role of the product category in comparisons of the effect of brand reputation across offline and online channels. At a theoretical level, this study develops a sequential argument: (1) The brand becomes more important in online environments as a consequence of the intangibility of the purchase process. (2) The intangibility of products in online shopping processes imposes varying limitations of differential importance across product categories. (3) The role of the brand in online environments is more relevant when the product category is more limited by a lack of physical contact. We provide evidence of this sequence through an empirical study based on an experiment.
2. Theoretical framework 2.1. The role of the brand: online vs. offline channels A brand is a name, term, symbol, or any other element that serves to distinguish the goods and services of one seller from other vendors (AMA, 2013). It influences both consumer decision making and purchasing behavior (Aaker, 1994; Erdem and Swait, 1998; Keller, 1993). Consumers use brands as signals to infer quality and other desired benefits when they lack previous experience or cannot conduct a thorough evaluation of products (Png and Reitman, 1995; Ubilava et al., 2011; Wernerfelt, 1988). This potential a brand has to influence consumer perceptions and improve performance entails its brand equity. Erdem and Swait (1998) propose a descriptive model of brand equity in an information economy, such that they account for the imperfect and asymmetric information the consumer has. In the buying process, consumers are uncertain about the attributes or benefits of the products they consider purchasing, because imperfect, asymmetric information characterizes most product markets. Firms thus can behave opportunistically because they are more informed about their own products than consumers are. Brands represent the signals the firm sends about the product’s position on the market, associated with certain levels of quality or other desirable benefits. Their signals also help reduce perceived risk and the costs associated with searching for information. In short, reputed brands are a credible signal to the market regarding the advantages and benefits of the product, so they affect consumers' evaluations (Erdem et al., 2004, 2006). In turn, we propose
an initial hypothesis that is not particularly original but offers a strong foundation for our subsequent predictions: H1. : Brands affect consumers' evaluations of products. The brand also remains a key competitive tool online (Brynjolfsson and Smith, 2000). Online channels differ from offline channels in their potential to provide information to help consumers make assessments (Alba et al., 1997). In online contexts, information is even more asymmetric and imperfect than in traditional channels, because they provide no opportunities to taste or touch the products or receive in-person advice from sellers. As it helps fill these information gaps, the brand becomes more important as an information signal, such that it enables consumers to make product evaluations. In other words, the brand acts as a signal that replaces the need for touch. Andrews and Currim (2004) also show that online consumers base their assessments on brands and consider fewer brands when they buy through that channel. Furthermore, Degeratu et al. (2000) propose that the brand has more impact online than in traditional channels, because of the greater uncertainty that characterizes purchasing in the former channel. Therefore, we propose: H2. : The influence of the brand on consumers' product evaluations is greater in online contexts than in offline contexts. 2.2. Difererences across product categories The problem of product intangibility during the buying process is a main differentiator between online and offline shopping. However, the incidence of this problem varies with the product type (Peck and Childers, 2003b). The consumer's need for touch depends on the prominence of tangible attributes in the product, such as when these attributes have the potential to discriminate the set of options available to the consumer. For example, most consumers perceive that clothes differ on tangible attributes such as texture, elasticity, or resistance, so they prefer to touch these products, to make an assessment and compare alternatives before buying. However, in product categories such as books, music, CDs, and packaged foods, consumers cannot discriminate among products using information obtained by touching the product, so this information becomes less necessary for decision making (McCabe and Nowlis, 2003; Childers and Peck, 2010). This reasoning leads to another hypothesis that is less original but still constitutes a starting point for a better understanding of our subsequent proposal: H3. : Product categories differ in terms of the importance of tangibility for their buying process. Because physical contact with the product prior to purchase is less relevant in some categories than in others, the disadvantage of the online channel also should differ across categories. The brand’s role as a substitute for the need for touch also varies from one product category to another. Its contribution as a signal of quality or other desirable benefits should be more important in online channels that increase the information asymmetry that consumers face; thus, the importance of the brand to a consumer buying a garment from an online store should be higher than it would be in a traditional store, because physical contact in the traditional store already provides the useful information for the purchase decision. In contrast, the importance of the brand to hygiene products is unlikely to be any higher in online contexts, because handling the product provides little information related to the buying process (unless consumers can test the product before buying). Degeratu et al. (2000) show the brand's role in online channels differs with the amount of information available to the consumer; Chu et al. (2010) indicate similar results in their analysis of consumers’
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brand loyalty. That is, consumers express greater loyalty in sensory categories, in which the consumer needs to touch or smell the product, than in non-sensory categories. Consumers use brand loyalty as a way to reduce their risk and uncertainty in the purchasing process, in that they lack information about sensory product purchases when they operate in an online context. H4. : The greater influence of the brand on consumers’ product evaluations in online contexts is enhanced in product categories for which tangibility is more important during the buying process.
3. Methodology 3.1. Research context and design To provide empirical evidence regarding the hypotheses, we performed a 2 2 2 experiment that combined three treatments: (1) leader versus non-leader brand, (2) online versus offline channel, and (3) product category with higher versus lower need for touch. A backpack represented the product with a higher need for touch, because the texture of the fabric, seam strength, and fit with personal anatomy are key attributes for this product that also are difficult to assess without physical contact. Sun lotion provides the product with a lower need for touch. Although clearly sensorial at the time of use, contact with it provides little information at the time of purchase. A total of 270 respondents participated in the study and tested both products. The other treatments were randomly assigned but controlled, to ensure similar sample sizes across treatments. In the offline treatment, the products were presented as they would be in a physical store, such that participants had the opportunity to interact physically with them. They also received the conventional technical information that accompanies each product. In the online treatment, the display mimicked a conventional online retailer, including images of the products and the same technical information. This design controls for the effect of physical contact with products (Peck and Childers, 2003b). For greater realism in the buying situation, we presented this purchase situation as part of a visit to a specialist sports retailer, Decathlon. Each product category also consisted of two brands. For the backpack, Nike was the reputable, leader brand, whereas Targus was the non-leading, less known brand (it is a private label of Decathlon). For sun lotion, Nivea was the leading brand and Aptonia was the less familiar brand (again, a private label of the retailer). To ensure the isolation of this treatment, we used the same product and technical information each time but manipulated the brand name. This procedure has proven validity for measuring brand equity and comparing national brands versus private labels (González-Benito et al., 2015; Richardson et al., 1994; Semeijn et al., 2004). In Table 1, we list the sample sizes for each treatment. Students in a Spanish university provided a suitable population for this research. The use of students is common in this type of research (Laroche et al., 2005; Yazdanparast and Spears, 2012 and 2013). Laroche et al. (2005) also cite three reasons for using student subjects in studies of online versus offline environments. Table 1 Sample size by treatment.
Backpack Sun lotion Total
Leader brand Follower brand Leader brand Follower brand
Online
Off-line
Total
69 69 69 69 276
66 66 66 66 264
135 135 135 135 540
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Table 2 Measure of the dependent variable: product evaluation. Factor
Item
Quality Quality is good It seems to be reliable nnn
Mean S.D.
Factor loading
3.56
0.88 0.92
3.56
0.89 0.92
Explained variance
Pearson's correlation
84.90%
0.70nnn
po 0.01.
First, students are familiar with the products studied. Second, it is likely that this population has experience with online shopping. Third, students are relatively homogeneous, particularly with regard to educational level and age, and controlling for these demographic variables provides a more robust test of our hypotheses. 3.2. Measures Product evaluations were measured with two items, focused on quality and reliability (Erdem et al., 2004, 2006). The responses used a five-point Likert scale (1 ¼“strongly disagree” to 5 ¼“strongly agree”). An exploratory factor analysis supported the unidimensionality of the scale, so we based our further analysis on the unique factor obtained. Table 2 contains the items, their descriptive statistics, and the outcome of the factor analysis. The experimental design assumes that the product types differ according to the importance of physical contact during the buying process (i.e., need for touch). To test this difference objectively, we asked participants to indicate their degree of agreement with a single item: “To buy this [backpack/sun lotion], I need to have the product in my hands.” These responses used a similar Likert-type scale. Finally, to control for the effect of consumers' profiles and previous experience, we collected information about the gender and age of each participant. The age category was fairly homogeneous, with an average of 21 years, and 65% of the sample were women. Because consumers also rely on their experience and prior knowledge during the search and evaluation process (Bettman et al., 1998; Lynch and Srull, 1982; Punj, 2012), we collected information about the respondents' familiarity with the retailer and products. For both variables, we used two-item scales and measured the responses using the same five-point Likert-type scale. The results from the respective factor analyses support unidimensionality, so we used these single factors, as we detail in Table 3.
4. Analysis and results In Table 4 we summarize the estimation results for the models we have proposed to test our hypotheses. As a contrast of the first two hypotheses, we estimated an initial regression model (Model 1) in which participants’ assessments depend solely on the control variables and the first two binary treatments, namely, leading versus unknown brand and online versus offline channel. We also included the interaction between the two treatments. The estimates for the control variables show that, though the variance in age is small, product evaluations tend to be worse as the age of participants increases. Those participants who are more familiar with the products also tend to provide more positive evaluations. Gender and familiarity with the retailer had no significant effects on perceived quality though. Turning to the effect of leading, reputable brands, we find that leading brands have a positive, significant effect (p o0.01) on
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Table 3 Measures of control variables. Factor
Item
Mean S.D.
Familiarity with retailer
I know the retailer's stores (Decathlon) I usually shop in the retailer’s stores (Decathlon) Familiarity with product I frequently use the product (backpack or sun lotion) I know the product options available in the market (backpack or sun lotion)
Variable Gender Age nnn
Description Dummy: 1 (male) 0 (female)
0.89 1.02 1.34 1.06
0.84 0.84 0.83 0.83
71.25
0.42nnn
69.31
0.38nnn
Mean S.D 0.35 0.48 20.93 3.64
p o0.01.
Table 4 Estimation results. Model 1
Constant Gender Age Familiarity with retailer Familiarity with product Online channel Leader brand Online channel leader brand F test R2 n
4.37 2.86 3.29 2.77
Factor loading Explained variance Pearson's correlation
Model 2 Backpack Sun lotion
Parameter difference
0.49nn 0.03 0.03nn 0.02 0.12nnn 0.31nnn 0.68nnn 0.04
0.77nnn 0.26 0.02 0.03nnn 0.01 0.11nnn 0.54nnn 0.08 0.38nn 0.96nnn 0.38n 0.29
nnn
nnn
nnn
0.16
0.18
types, along with tests for the differences of parameters between the two product types. The results show that the interaction between leading brand and online channel is positive and significant (p o0.10) in the backpack category, as well as significantly higher (p o0.05) than in the sun lotion category. These results support H4. Although we did not observe a greater advantage of leading brands in online channels in general (H2), this advantage clearly arises in specific categories that are characterized by a greater need for touch during the buying process.
nn nn
5. Conclusions
nn
po 0.10. p o0.05. p o0.01.
nn
nnn
evaluations of the products. Because our study featured the same product, just labeled with different brands, this result highlights the importance of branding. The brand reputation wrought by leading brands prompts a better assessment of their products, regardless their technical characteristics, in support of H1. This result also shows that evaluations of products in an online context are significantly worse than in an offline context. The possibility of physical contact with products improves product evaluation, whatever the brand. Regarding whether the brand effect differs between online and offline channels, we find that the interaction between the two treatments was not significant. The difference we predicted in H2 thus was not confirmed. Our data show that perceived quality and reliability derived from the brand does not increases in online channels, even when consumers have no physical contact with the product in these channels. To address the role of product category, we first must confirm whether the need for touch during the buying process differs between the two product categories. The importance that participants attribute to having the product on hand before making a decision varies significantly across products (mean comparison between dependent samples: t¼9.36, p o0.01). The average rating for the backpack was 3.99, compared with 3.23 for the lotion. These results confirm H3: The need for touch differs between product categories. In turn, we consider the interaction effect between the brand and the distribution channel. In H4 we proposed that brand has a more relevant role in online environments, at least for the backpack category, because tangibility is more important in this category. Therefore, we estimated a second model (Model 2) in which we considered the specific parameters for each of the product
This article has addressed the role of the brand as a signal of quality during the buying process, primarily by comparing online and offline channels. We argue that brands substitute for the lack of physical contact with products in online shopping settings, such that their role is more relevant. We also considered a comparison across different product categories, with the notion that product categories differ according to the need for physical contact they invoke during the buying process; therefore, the potential for brands to substitute for the need for touch should differ across product categories. Using an experimental design, we show that the most recognized brands exert a positive effect on product evaluations, regardless of the technical characteristics and other objective product attributes. This effect is not any stronger in the context of online shopping, though our findings show that it may be more intense in product categories in which there is a greater need for touch. We also confirm that the product categories differ in their level of need for touch and the extent to which consumers desire physical contact with the product during the buying process. These results demonstrate that building strong brands is a key competitive advantage for manufacturers. Strong brands are associated with quality and other desirable benefits, and therefore, they provoke better assessments by consumers. Brand reputation becomes even more crucial when selling products in electronic channels, at least if the product itself entails a greater need for touch prior to purchase. For such products, strong brands can make up for the intangibility of e-commerce, so this effort represents a key competitive strategy in such channels. Moreover, leading brands can leverage their competitive advantage to enhance their performance in the increasingly prominent realm of e-commerce. E-retailers need to make careful decisions regarding the configuration of the assortment, taking into account the nature of the product category. They should strengthen their focus on developing highly recognizable brands, because the lack of physical contact is an important purchase inhibitor in this shopping channel. However, the brand criterion may be less important if the
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choice between online and offline shopping is not particularly affected by the opportunity to touch or feel the products. In any case, these results represent an initial response to an ongoing challenge. Our empirical study focuses exclusively on a particular segment of consumers in two product categories, and on two brands within each category. It would be helpful to consider other customer groups and new product categories, to provide greater validity to the findings. Our comparison of offline and online channels also focused exclusively on physical contact with the products. Research that considers experimental designs that provide greater realism in both offline and online shopping settings would also enhance the validity of our findings.
Acknowledgments This research was supported by Ministerio de Economía y Competitividad, Grant ECO2014-53060-R (Spain).
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