Measuring Service Quality in Online Luxury Goods Retailing

ABSTRACT Service quality has been identified as a crucial factor to successfully and sustainably manage online shops. In this paper, we introduce an adaptation of the E-S-Qual instrument to measure service quality in online luxury goods retailing. Based on a literature review, we identify efficiency, design, fulfillment, information, contact and responsiveness as factors of service quality in online luxury goods retailing. We found empirical evidence that these factors should be considered as dimensions rather than antecedents. A survey conducted in cooperation with the HUGO BOSS AG indicates that our proposed instrument is valid and reliable. Implications for research and practice as well as limitations of our study are discussed. 1. Introduction Many luxury goods retailers fear that online retailing will diminish their brand's appeal by corroding their reputation for exclusivity. Think of expensively furnished shops on the high streets of fashionable cities not everybody dares enter, and exquisitely designed advertisements in high-fashion, high-price glossy magazines. Contrast this with a website accessible to everyone anytime, and blinking banner ads on Google Search. Could opening a web shop ultimately force a luxury good retailer to alter its business model and reposition its entire brand? On the other hand, online retailing will facilitate impulse buying for loyal customers and attract new customers. High-end customer groups are typically broadly distributed geographically, but align their tastes with international peer groups. They suffer from severe time constraints and happily use online shops [Dubois & Laurent 1995]. Some of the biggest luxury good retailers, Dolce & Gabbana, HUGO BOSS and Dior, have already identified online retailing as a chance, not a threat, and recently launched their online shops. Can their competitors afford to keep away from the internet now - or will they be marginalized, scrambling to regain market share and customers? We think that the key question here is whether the features that make luxury goods attractive to customers and that made retailers a success on the high street in the first place can be replicated online. Luxury goods buyers are typically looking for outstanding quality and image in the brands they favor, and are willing to pay the high price which signals the good's exclusivity [Vigneron & Johnson 2004]. Another feature eminently important to them is a high standard of service quality. Product quality and prices can be determined, to a great extent, independently of the sales channel. Services customers need in online shops, for example safe shipment, secure payment and fast response to customer emails or telephone calls differ from those they expect in high-street shops. This is why we decided to look into the key feature of service quality in luxury brands online shops first. There exists a multitude of instruments for measuring online service quality. [Parasuraman et al. 2005] proposed an adaptation of their ServQual instrument which has been widely applied for measuring offline service quality. Another instrument which is based on the original DeLone and McLean IS-success model has been developed by [Mc Kinney et al. 2002]. DeLone and McLean themselves recommended their updated IS-success model for measuring the satisfaction of customers with e-commerce web sites [DeLone & McLean 2004]. However, none of them have been specifically developed or tested for luxury goods retailing which is distinctly different from mainstream goods retailing. Luxury goods offer their buyers more than just functional value [Arghavan & Zaichkowsky 2000]. Compared to purchasing mainstream goods, consumers exhibit different attitudes towards [Dubois & Laurent 1994; Wong & Ahuvia 1998] and motivation for buying luxury goods [Kapferer 1998]. It seems likely that luxury goods consumers will consider other aspects when evaluating the service quality of a luxury retailer's online shop. …