Service failures and customer defection: a closer look at online shopping experiences

Abstract

This study attempts to understand certain aspects of the online shopping experience from a consumer’s perspective. In particular, this study investigates the interaction between service failure and online shops’ readiness for service recovery and the resulting impact on customer defection. The findings of the present study suggest that some online shops have severely breached a few fundamental business principles, resulting in lost customers. Specifically, this study finds that failure to institute adequate complaint management and service recovery systems contributed to customer defection. Hence, service recovery and customer retention need to be given due importance during the service design phase, and appropriate management decisions have to be made upfront rather than after service failures occur when it may be too late.