What Does Regulatory Fit Have to do with the Online Customer’s Decision-Making Process? An Abstract

Abstract

Despite the strong growth of Internet and e-commerce sales, this distribution channel has not been as successful as initially expected. Low shopper retention (i.e., retaining visitors for longer periods of time) and low conversion rates (i.e., the percentage of the visitors who actually make a purchase) are viewed as significant impediments to online sales growth (Campbell et al. 2013). A closer look at the literature offers some insight into what may account for the lack of a theoretical and practical understanding of this issue. First, to date, decision-making research in general (Khan and Dhar 2006, 2007) and e-retailing research in particular have mainly focused on individual consumer choices and decisions (Campbell et al. 2013; Deng and Poole 2010) and have evaluated shopping trips on the merit of goods acquired (Babin et al. 1994; Holbrook 1986). Second, e-retailers have paid little attention to how the specific type of online shopping experience, which precedes the selection of tangible products, affects consumer purchasing decisions. Recent self-regulation and goal congruence research has shown that consumers’ decisions can be affected by their previous experiences, actions, and/or by activating certain goals that guide their subsequent choices (Dewitt et al. 2009; Muraven and Baumeister 2000; Khan and Dhar 2006; Labroo and Lee 2006). Taken together, these findings suggest that consumers’ prior experiences/decisions can influence their subsequent decisions. Hence, relevant questions that arise are: (1) How do online customers evaluate their shopping experiences on hedonic versus utilitarian websites, and how do they subsequently make product decisions in an environment where the experience offered and the product options vary in terms of their mix of hedonic and utilitarian attributes? And (2) would e-retailers benefit more from offering a combined hedonic and utilitarian experience (i.e., high hedonic/high utilitarian experience) or investing more in one of the two options (i.e., high hedonic/low utilitarian experience or low hedonic/high utilitarian experience)?

Building on the goal compatibility principle (Chernev 2004), this study examines how a match (i.e., regulatory fit) between online consumers’ goal pursuit strategies—hedonic versus utilitarian website—and their regulatory orientation affects their decisions for websites and subsequent product purchase decisions. Moreover, despite a rapidly growing body of empirical work and evidence supporting regulatory fit theory, the specific mechanisms underlying the regulatory fit effect are still relatively unknown (Yao and Chen 2014). In this study, we extend and validate the role of engagement as a mediator in the online shopping context. From a practical perspective, the results of this study can assist e-retailers in their decisions to customize their web designs based on the regulatory orientation of their online visitors, thereby enabling them to lower their bounce rates—in which visitors abandon a web page without exploring further.