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The Influence of Price Comparison Websites on Online Switching Behavior: A Consumer Empowerment Perspective

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Part of the Lecture Notes in Computer Science book series (LNCS, volume 12066)

Abstract

While online price comparison websites have burgeoned, there is scant understanding of how they influence online consumer behavior. This study addresses this gap in the literature by investigating the influence of price comparison websites on online switching behavior, and also suggests some additional factors that may be considered when looking at this relationship. We argue that shopper innovativeness, their perceived usefulness of the ad, and their customer service experience consciousness are important factors to consider when evaluating the impact of price comparison websites on eSwitching behavior. We also argue that the most appropriate theoretical lens through which to investigate this relationship is that of the consumer empowerment paradigm. A conceptual model is proposed and tested. Our analysis of 345 sample respondents finds that perceived usefulness of ads and customer service experience expectations are important enablers to price comparison websites use. Similarly, we find that shopper innovativeness and customer service expectations, in addition to price comparison websites use, are significant enablers to eSwitching behaviour. However, contrary to prediction, we find that shopper innovativeness has little to no influence on shoppers’ use of price comparison websites; we also observed similar patterns concerning the link between the perceived usefulness of online ads and eSwitching behaviour. In conclusion, our research contributes to better understanding the influence of price comparison websites on online switching behavior, and the factors that might influence this relationship.

Keywords

Consumer empowerment Customer service experience consciousness eSwitching Online ads Price comparison websites Shopper innovativeness 

1 Introduction

While online price comparison websites have burgeoned, there is scant understanding of how they influence online consumer (eSwitching) behavior. This study addresses this gap in the literature by investigating the influence of price comparison websites on online switching behavior. While Osakwe and Chovancová (2015) examined female shoppers’ perceptions towards the use of price comparison websites, Jung et al. (2014) examined work shoppers’ response to price comparison websites, and Pourabedin et al. (2016) investigated the role of customer value and attitudes in online channel switching behavior, there are no studies to the authors’ knowledge that investigates the relationship between eSwitching behavior and price comparison websites. The emerging question, therefore, is whether the use of price comparison websites can lead to eSwitching behavior. This study by addressing this question seeks to close the void in our understanding concerning the relationship between price comparison websites and eSwitching behavior. This study also suggests some additional factors that may be considered when looking at this relationship.

Accordingly, and based on a survey of existing research (Broniarczyk and Griffin 2014; Hudders et al. 2019; Osakwe and Chovancova 2015; Xu et al. 2013; Zhang et al. 2012), it is argued that shoppers’ innovativeness, their perceived usefulness of online ads, and their customer service experience consciousness are important factors to consider when evaluating the impact of price comparison websites on eSwitching behavior and this forms the overarching objective of our paper. We also argue that the most appropriate theoretical lens through which to investigate this relationship is that of the consumer empowerment paradigm (e.g. Broniarczyk and Griffin 2014; Camacho et al. 2014; Kucuk 2009). In other words, by employing the consumer empowerment paradigm, this paper’s objective is to investigate the relationship between (the use of) price comparison websites and eSwitching behavior in addition to the investigation of the determinants behind these phenomena, which we have identified above.

Altogether, this allows us to contribute to the literature on online shopping in at least two important ways. First, is that we contribute to the online shopping literature particularly concerning the presentation of evidence that the use of price comparison websites, especially with regard to young and existing online shoppers, significantly empowers shoppers to engage in eSwitching behavior. The second contribution pertains to the investigation of the determinants behind the perceived use of price comparison websites in addition to the investigation of the empirical question on the determinants of eSwitching behavior. In particular, we find that shoppers’ traits primarily customer experience consciousness and innovativeness are enablers to eSwitching behavior, while positive perceptions towards the use of online ads as well as customer experience consciousness engender the use of price comparison websites.

Because it is commonly known that young adults, especially student population, are usually heavy users of online services and in general more receptive to emerging technologies (see also Yoo and Donthu 2001), we chose to test the study hypotheses using a (university) student sample; which is also consistent with studies on consumer switching in the technology context (e.g. Bhattacherjee et al. 2012). At the same time, it is worth noting that our sample is primarily made up of experienced internet users and who are familiar with online shopping. Taken together, this empirical context is appropriate for our investigation.

The following literature review addresses each of these constructs in turn, before suggesting the theoretical model that was tested. This is followed by a brief overview of the methodology, and findings of an exploratory study to test the model. We conclude with a short discussion of these findings.

2 Literature Informing Hypotheses Development

2.1 Consumer Empowerment Paradigm

The consumer empowerment paradigm in marketing is an important extension of the psychological empowerment construct, long studied, in the psychology literature (cf. Zimmerman 1995; Cattaneo and Chapman 2010). Camacho et al. (2014:294), while citing previous research, describe empowerment as “strategies or mechanisms that equip people with sufficient knowledge and autonomy to allow them to exert control over a certain decision”. Similarly, it has been noted in the marketing literature that “empowerment requires mechanisms for individuals to gain control over issues that concern them, including opportunities to develop and practice skills necessary to exert control over their decision making” (Pires et al. 2006, p. 938). In light of previous discussions and among them Broniarczyk and Griffin (2014), Kucuk (2009), and Pires et al. (2006), the current investigation argues that this paradigm can help us gain understanding into the perceived use of price comparison websites and eSwitching behaviour in particular among existing shoppers. In general, the internet equips users with the tool to gain access to credible and quality information and this by implication confers more power and freedom of choice to users and in this case online shoppers. Moreover, since it is known that customers often rely on expert advice (in this instance, price comparison websites) when making purchase decisions (Camacho et al. 2014), such advice - well-intentioned – can dramatically reduce switching cost. One of the benefits of comparison tools and in this case price comparison websites is that they offer shoppers a range of choices (Broniarczyk and Griffin 2014), thus allowing shoppers to shop across stores. Online switching behaviour (or eSwitching) is considered to be a possible outcome of this process. Similarly, since it is has been suggested in the literature that digital ads may be an important source of consumer empowerment today (Hudders et al. 2019), it is considered therefore to play an influential role in shoppers’ behavioural tendencies to use price comparison websites and to consequently eSwitch. Consequently, the following hypothesis is proposed:
  • H1: Price comparison websites’ perceptions positively influence eSwitching behaviour.

At the same time, it is known that intrapersonal factors, described as “how people think about themselves and includes domain-specific perceived control and self-efficacy, motivation to control, perceived competence, and mastery” (Zimmerman 1995, p. 588), is a key aspect of empowerment. Accordingly, we consider intrinsic factors, or more precisely traits, like the customer service experience and consumer/shopper innovativeness, to be strong propelling force for price comparison websites use and eSwitching behaviour. Before discussing each of these in turn, we turn to eSwitching behaviour.

2.2 eSwitching Behaviour

The reasons why customers engage in switching intentions and/or behaviour remains an important topic in the literature to this day (Bhattacherjee et al. 2012; Fan and Suh 2014; Gopta et al. 2004; Malhotra and Malhotra 2013; Mosavi et al. 2018; Pourabedin et al. 2016). Multiple reasons exist for this kind of behaviour (Chuang and Tai 2016; Keaveney 1995; Malhotra and Malhotra 2013; Mosavi et al. 2018; Zhang et al. 2012) but a factor often identified as a key determinant is the attractiveness of alternatives (Chuang and Tai 2016; Xu et al. 2013; Zhang et al. 2012). In the context of this study, consumers might easily switch between online stores when it is believed they can get better price deals elsewhere. Price comparison websites lower the barriers to switching by offering such alternatives in one central place, with links that could easily navigate to said alternatives. Because price comparison websites are price aggregators, it offers the opportunity for shoppers to easily know the prices of each competing online stores and this consequently reduces switching cost. This study hypothesized (see H1) that these price comparison websites directly influence eSwitching behavior. The following section describes the former.

2.3 Price Comparison Websites

Comparison shopping can be defined as “the practice of comparing the prices of items from different sources to find the best deal” (Hajaj et al. 2015: 563). Price comparison websites provide the online alternative to this and we, therefore, define online price comparisons as the online tool that allows for the comparison of item prices from different sources to find the best deal. The use of price comparison websites has been acknowledged as an important search information tool, which has strong potential to alter shopping behaviour both in the online and offline environment (Bodur et al. 2015; Broeckelmann and Groeppel-Klein 2008, Osakwe and Chovancová 2015; Passyn et al. 2013). Osakwe and Chovancová (2015:597) describe price comparison websites as “a near-frictionless marketing intermediary that can drive down online shoppers’ search costs”.

Because shoppers can easily compare prices of similar firms and/or brands in a matter of seconds, the active use of price comparison websites not only reduces search costs but also empowers shoppers to buy from firms offering the best deal. This study argues that the greater the perceived usefulness of price comparison websites, the more it is expected that shoppers will use the information available on these sites in their pre- and post-purchase decisions. It, therefore, acts as a key mediator in the relationship between key influencing factors and online switching behavior. From a consumer empowerment perspective, it is pertinent to consider how these websites influence the relationship between eSwitching and shopper innovativeness, perceived usefulness of an ad and the consumers’ service experience consciousness. Each of these now discussed in turn.

2.4 Shopper Innovativeness

Consumer/shopper innovativeness, or what some scholars may well refer to as variety seeking propensity, is a well-researched concept in the literature (e.g. Agarwal and Prasad 1998; Bhattacherjee et al. 2012; Xu et al. 2013; Mishra 2015). In this instance and following prior literature (Agarwal and Prasad 1998; Bhattacherjee et al. 2012), we define shopper innovativeness as a trait reflecting the willingness on the part of the shopper to experiment and/or try out any new products or range of services. Moreover, because consumer innovativeness has been implied in the internet browser context to positively relate to switching intentions among a similar sample of respondents like this study (Bhattacherjee et al. 2012), it stands to reason, that both the relationship between shopper innovativeness and eSwitching behavior, and its relationship to price comparison website perceptions begs investigation. Hence, we proposed that:
  • H2: Shopper innovativeness positively influences eSwitching behavior.

  • H3: Shopper innovativeness is positively related to price comparison website perceptions.

2.5 Customer Service Experience Consciousness

The role of customer service experience is well researched in academic and business literature (Berry et al. 2002; Khan et al. 2015; Meyer and Schwager 2007; Osakwe and Chovancová 2015). However, its relationship to online switching behavior and price comparison websites remains underdeveloped in empirical research. Service experience consciousness reflects a trait among shoppers who are highly demanding in service encounters, and thus tend to exhibit a higher dissatisfaction threshold. This trait, for example, has been reported to be an important enabler to customer-perceived use of price comparison websites (Osakwe and Chovancová 2015), and is therefore included in the proposed conceptual model:
  • H4: Customer service experience consciousness is positively related to price comparison website perceptions.

We extend this research by arguing that since this set of shoppers invests a significant amount of cognitive, emotional and even intellectual resources into service interactions/encounters with the firm, they are therefore more demanding, difficult to please and more likely to move from one store to another in search for better services at all times. Customer service experience consciousness has already been identified as a trait reflecting the likelihood of a customer to become highly dissatisfied with service encounters and since customer dissatisfaction has been linked to switching intentions in prior research (e.g. Fan and Suh 2014), it can be posited therefore that customer service experience consciousness and eSwitching behavior are related. Moreover, following previous research (Keaveney 1995; Liang et al. 2013), we argue that service inconvenience, impolite behavior on the part of service personnel, and occurrence of core service and service encounter failures will be less tolerated by those scoring high in customer service experience consciousness and thus in this case impacting eSwitching behavior. Consequently, the following hypothesis has been developed:
  • H5: Customer service experience consciousness is positively related to eSwitching behavior.

The final construct, from an empowered customer perspective, we felt pertinent to include in the study is that of the perceived usefulness of online ads.

2.6 Perceived Usefulness of Online Ads

Consumers’ attitudinal response to advertisements in general and online ads, in particular, is mixed (Le and Vo 2017; Shavitt et al. 1998; Schlosser et al. 1999), yet it is considered an important contributing factor when investigating online consumer behavior (Ducoffe and Carlo 2000; Mehta 2000; Osakwe and Chovanocva 2015; Paliwoda et al. 2007). Some consumers have ill-feelings about online ads, others may be indifferent to online ads, while some have positive perceptions about online ads. In theory, however, ads are often meant to inform consumers and offer choices which they can easily choose from. Online ads, therefore, empower consumers concerning his/her buying decisions (cf. Ducoffe and Curlo 2000). Therefore, in this instance, online ads can confer significant power to consumers (Hudders et al. 2019), especially when it is perceived to be informative and valuable. In an online services context, strong perceptions towards online ads provide fertile ground for shoppers to become increasingly price-sensitive (Osakwe and Chovancová 2015). This may be particularly true with regard to the use of price comparison websites. This study, therefore, extends this line of the suggestion by including eSwitching behaviour as an alternative outcome of online ads’ perceived usefulness. Consequently, the following hypotheses were developed:
  • H6: Customers’ perceived usefulness of ads positively influences their perception of price comparison websites.

  • H7: Customers’ perceived usefulness of ads positively influences their eSwitching behavior.

The above literature review and proposed hypotheses can be summarized in the theoretical model proposed in Fig. 1. This model extends prior research (e.g. Osakwe and Chovancová 2015) by our assessment of enablers to the perceived use of price comparison websites and eSwitching behavior, especially concerning young and existing online shoppers.
Fig. 1.

Empirical model

The methodology used to test the proposed model is outlined in the following section.

3 Empirical Study

3.1 Survey Data and Method

More specifically, student sample was used in the study because this is an important consumer segment for studying online behaviour and has also been extensively employed in the literature (Fan and Suh 2014; Hong 2015; Ozok and Wei 2010; Wu et al. 2011). This study recruited participants from one of the state universities in the Czech Republic using a convenience-based sampling approach which we consider to be most practical in this case. This study uses both online and self-administered surveys, nevertheless, most of the completed responses were from the self-administered questionnaire. Because we wanted to ensure that those who participated in the study have fairly good internet experience with online purchases, in the end – particularly after deleting responses from six non-online shoppers - we had in total 345 valid responses. Therefore, the empirical focus is on existing online shoppers.

The majority of sample respondents were female (59%), aged between 17–24 (80%), and undergraduates (66%). In this study, statistical analyses were performed using both IBM SPSS and WarpPLS (Kock 2017). Finally, the research constructs - except for demographics - were measured using a five-point scale (ranging from completely disagree to completely agree).

3.2 Construct Measurement Validation

In order to improve the face and construct validity of the research constructs, constructs were adapted constructs from the literature. In particular, the measures for customer service experience consciousness, perceptions regarding the use of online ads and price comparison websites were based on Osakwe and Chovancová (2015), while the measure for consumer innovativeness was based on Daghfous et al. (1999) and finally the measure for eSwitching was modified from Kim et al. (2006) in addition to reading from the broader literature.

The research hypotheses were tested by using the PLS-path modeling technique and precisely using mode A algorithm. The inspected composite reliability scores were as follows: 0.85 (online ads perceptions/OAD), 0.84 (price comparison websites use/PCWs), 0.80 (shopper innovativeness/INNOV), 0.71 (customer service experience consciousness/CSEC), and 0.74 (eSwitching behavior/eSWITCH). At the same time, all indicator loadings and weights were statistically significant at p < 0.01, besides all the indicator loadings but two exceeded the 0.6 scores required for this kind of exploratory work. In terms of convergent validity, average variance extracted (AVE) scores range from 0.59 (OAD), 0.58 (PCW), 0.58 (INNOV), 0.46(CSEC), to 0.49 (eSWITCH). Although not reported here, following Fornell and Larcker (1981) discriminant validity was established for the constructs.

4 Structural Model

Model fit and quality criteria were inspected based on SRMR and R-squared contribution ratio (RSCR). We obtained 0.09 (SRMR value and thus acceptable since it is less than 0.1) and RSCR scores of 0.99 (which approximates to the ideal cut-off value of 1) (Kock 2017).

Regarding the hypothesized relationships, there is evidence for all but two (see Table 1 for details). Notably, the control variable i.e. gender neither statistically impacted price comparison websites use nor eSwitching. Finally, model predictive power concerning shoppers’ use of PCW was 14%, whereas for eSwitching it was 30%; meaning that the empirical model explains about 14% and 30% variations in the use of price comparison websites and eSwitching respectively.
Table 1.

Structural Model statistics

Hypothesis

β (t-ratios)

p-values

Significant/Not

H1

.19 (3.26)

<.01

Yes

H2

.36 (6.31)

<.01

Yes

H3

.04 (.51)

.30

Not

H4

.29 (4.58)

<.01

Yes

H5

.26 (4.88)

<.01

Yes

H6

.20 (4.36)

<.01

Yes

H7

.03 (.49)

.31

Not

5 Short Discussion and Conclusion

This study has been able to identify antecedent factors leading to switching behaviour in the context of service and in particular in online stores beyond the usual suspects in the literature, for instance, attitudes towards switching (cf. Pourabedin et al. 2016). Through the consumer empowerment paradigm, we find, not surprisingly, the perceived use of price comparison websites relates strongly with eSwitching. This novel finding in some ways mirrors the conclusion in past research about the role that search-intentions play in customers’ channel switching (Gopta et al. 2004). The point is that shoppers who use price comparison websites mainly use it for bargain hunting. This suggests that to reduce this positive effect on online switching behaviour, online retail merchants, particularly with a focus on young shoppers, will need to do more in the area of sales promotion and loyalty coupons as this might be one of the most effective ways to reduce the incidence of eSwitching and even customer churn.

Also, we find that a higher possession of the following traits in shoppers namely innovativeness and their perception of the customer service experience empowers these shoppers to engage substantively in online switching behavior. Shopper innovativeness had the greatest impact on eSwitching. Since it has been suggested that individuals who are more likely to experiment with new ideas and/or products are more prone to switching (Bhattacherjee et al. 2012; Xu et al. 2013) and perceived innovativeness of the services provider inhibits customer switching intentions (Malhotra and Malhotra 2013), the study’s finding, therefore, is a reinforcement to extant research.

Because shoppers who possess a higher level of service experience conscientiousness than others may be more prone to service dissatisfaction, the finding, therefore, mirrors previous discussions about the role of customer dissatisfaction in customer switching behaviour (cf. Chuang and Tai 2016; Fan and Suh 2014). Moreover, as predicted and consistent with previous research (Osakwe and Chovancová 2015), this study finds that positive perceptions concerning online ad usefulness, in addition to service expectations, increasingly empower shoppers to use price comparison websites.

Although this study initially proposed that consumer innovativeness and perceived use of price comparison websites are strongly related, evidence, however, shows it to be marginal, at best. Therefore, further research is needed to explore not only this insignificant finding but even further the supported research evidence reported in this paper. In other words, there is a need for more analysis on the research issues discussed in this work because until they are reassessed our findings are at best preliminary and limited to a specific sample. Furthermore, since the strength of relationships was never hypothesized, it is important therefore for future analysis to validate the assumption that shopper innovativeness, compared to others, has the strongest impact on online switching behaviour. Meanwhile, an important limitation of this analysis is that it was conducted using a student population and so makes it difficult to generalize beyond the target population. This consequently reinforces our call for further research on this topic. Finally, this study despite its limitations has added to the customer switching behaviour literature in addition to the heavily under-researched research stream of price comparison websites through the demonstration of the antecedents for eSwitching and shoppers use of price comparison websites based on the consumer empowerment paradigm.

Notes

Acknowledgement

This work was supported by the Internal Grant Agency of FaME through TBU in Zlín No. IGA/FaME/2020/002; and further by the financial support of research project NPU I no. MSMT-7778/2020 RVO - Digital Transformation and its Impact on Customer Behaviour and Business Processes in Traditional and Online markets.

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Copyright information

© IFIP International Federation for Information Processing 2020

Authors and Affiliations

  1. 1.Faculty of Management and EconomicsTomas Bata University in ZlinZlinCzech Republic
  2. 2.University of Stellenbosch Business SchoolStellenboschSouth Africa

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