Type of online sales channel as a determinant of consumers' perception of its e-service quality
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Type of online sales
channel as a determinant
of consumers’ perception
of its e-service quality
An experimental study of Generation Y on the e-commerce market
MASTER THESIS WITHIN: Business Administration
NUMBER OF CREDITS: 15 credits
PROGRAMME OF STUDY: International Marketing
AUTHOR: Agnieszka Maria Kozakiewicz & Lisa Lienstromberg
JÖNKÖPING MAY 2022Acknowledgements
The authors would like to express their sincere gratitude to everyone who provided support
during the entire Master’s Thesis writing process. A special thank you is given to the supervisor
AFM Jalal Ahamed, who provided constructive feedback and guided the authors in the right
direction. Also, the authors would like to thank all the respondents who took part in the study,
as it was thanks to them that the research could be realised.
______________________________ ______________________________
Agnieszka Maria Kozakiewicz Lisa Lienstromberg
iMaster Thesis in Business Administration
Title: Type of online sales channel as a determinant of consumers’ perception of its
e-service quality: An experimental study of Generation Y on the e-commerce
market
Authors: Agnieszka Maria Kozakiewicz and Lisa Lienstromberg
Tutor: AFM Jalal Ahamed
Date: 2022-05-18
Key terms: e-commerce, e-service quality, online sales channels, consumer behaviour
Abstract
With the growing popularity of e-commerce, this market has become highly competitive,
prompting companies to develop an appropriate strategy. As it turned out, focusing on e-service
quality is the key and most competitive strategy in this market. However, as there are three
predominant online sales channels, companies first need to understand how these are perceived
regarding e-service quality and take further steps on this basis. Therefore, the primary purpose
of this thesis was to investigate the impact of the type of online sales channel on e-service
quality perception among Generation Y. Accordingly, an online between-subjects experiment
was carried out in which 369 valid responses were retained. Respondents assessed the e-service
quality of one presented online shop (marketplace, reseller or web-store channel) based on five
dimensions identified by Lee and Lin (2005). The findings showed that the channel type
impacts e-service quality perception. However, it determines only two of the five dimensions,
responsiveness and trust, which further suggests that these are the most powerful predictors of
e-service quality. The study contributes to pushing the research on e-service quality and
e-channels forward by identifying e-service quality dimensions affected by the type of online
sales channel. Subsequently, it provides evidence that even if the channel type influences just
two dimensions, it still affects the overall e-service quality. Therefore, it further demonstrates
the validity of using a higher-order construct instead of first-order constructs regarding
e-service quality. Furthermore, it also extends the Technology Acceptance Model research by
questioning today’s importance of website design. Moreover, this paper enables companies that
already sell online and those who want to start selling online to make more accurate decisions
when choosing an online sales channel. Finally, it gives the owners/managers of online sales
channels an indication of which areas need improvement to enhance the perception of e-service
quality in the channel they operate.
iiTable of Contents
1 Introduction..................................................................................... 1
1.1 Background ......................................................................................................... 1
1.2 Problem Discussion............................................................................................. 4
1.3 Purpose and Research Questions ........................................................................ 6
1.4 Delimitations ....................................................................................................... 6
1.5 Definitions ........................................................................................................... 7
2 Literature Review ........................................................................... 9
2.1 E-service Quality ................................................................................................. 9
2.2 Online Sales Channels....................................................................................... 10
2.2.1 Marketplace ....................................................................................................... 11
2.2.2 Reseller Channel ............................................................................................... 12
2.2.3 Web-store Channel ............................................................................................ 14
2.3 Hypotheses Development ................................................................................. 16
2.3.1 Website Design ................................................................................................. 16
2.3.2 Reliability .......................................................................................................... 17
2.3.3 Responsiveness ................................................................................................. 18
2.3.4 Trust .................................................................................................................. 19
2.3.5 Personalisation .................................................................................................. 20
2.4 Conceptual Model ............................................................................................. 21
3 Methodology and Method ............................................................ 23
3.1 Research Philosophy ......................................................................................... 23
3.2 Research Approach ........................................................................................... 24
3.3 Research Design ................................................................................................ 25
3.4 Research Method ............................................................................................... 26
3.5 Secondary Data Collection................................................................................ 28
3.6 Primary Data Collection .................................................................................... 28
3.6.1 Population ......................................................................................................... 29
3.6.2 Sampling ........................................................................................................... 29
3.6.3 Procedure and Questionnaire ............................................................................ 30
3.6.4 Pretest ................................................................................................................ 34
3.7 Analysis Techniques ......................................................................................... 34
3.7.1 Descriptive Statistics ......................................................................................... 34
3.7.2 Analysis of Variance ......................................................................................... 35
3.8 Screening and Cleaning the Data ...................................................................... 35
3.9 Credibility of Research Findings ...................................................................... 36
3.9.1 Reliability .......................................................................................................... 36
3.9.2 Validity.............................................................................................................. 36
3.9.3 Generalisability and Trustworthiness ................................................................ 37
3.9.4 Ethical Considerations ...................................................................................... 38
4 Analysis and Empirical Findings ................................................ 39
4.1 Response Rate ................................................................................................... 39
4.2 Data Quality ...................................................................................................... 39
4.2.1 Normality and Outliers ...................................................................................... 39
4.2.2 Reliability Analysis ........................................................................................... 40
4.2.3 Validity Analysis............................................................................................... 40
4.3 Descriptive Statistics ......................................................................................... 42
4.3.1 Respondents’ Profile ......................................................................................... 43
iii4.3.2 Website Design ................................................................................................. 45
4.3.3 Reliability .......................................................................................................... 46
4.3.4 Responsiveness ................................................................................................. 46
4.3.5 Trust .................................................................................................................. 47
4.3.6 Personalisation .................................................................................................. 48
4.3.7 E-service Quality ............................................................................................... 49
4.4 Hypotheses Testing ........................................................................................... 50
4.4.1 Website Design ................................................................................................. 50
4.4.2 Reliability .......................................................................................................... 50
4.4.3 Responsiveness ................................................................................................. 51
4.4.4 Trust .................................................................................................................. 52
4.4.5 Personalisation .................................................................................................. 53
4.4.6 E-service quality................................................................................................ 54
5 Discussion ...................................................................................... 57
5.1 Website Design ................................................................................................. 57
5.2 Reliability .......................................................................................................... 58
5.3 Responsiveness ................................................................................................. 58
5.4 Trust .................................................................................................................. 59
5.5 Personalisation .................................................................................................. 60
5.6 E-service Quality ............................................................................................... 60
5.7 Consideration of Research Questions ............................................................... 62
6 Conclusions .................................................................................... 63
6.1 Key Findings ..................................................................................................... 63
6.2 Implications for Theory..................................................................................... 64
6.3 Implications for Practitioners ............................................................................ 65
6.4 Limitations ........................................................................................................ 66
6.5 Future Research ................................................................................................. 67
Reference List ............................................................................................ 69
ivFigures
Figure 1 Conceptual model ......................................................................................... 22
Figure 2 Graphic presented in the study ..................................................................... 31
Figure 3 Effect of the type of online sales channel on the responsiveness perception of
an online shop ............................................................................................... 52
Figure 4 Effect of the type of online sales channel on the trust perception of an online
shop .............................................................................................................. 53
Figure 5 Effect of the type of online sales channel on the e-service quality perception
of an online shop .......................................................................................... 55
Figure 6 Conceptual model with results ..................................................................... 55
Tables
Table 1 Manipulation treatments used in the study ................................................... 30
Table 2 Measurement items ....................................................................................... 33
Table 3 Excluded responses ...................................................................................... 39
Table 4 Internal reliability after the deleted item ...................................................... 40
Table 5 KMO and Bartlett’s Test .............................................................................. 41
Table 6 Rotated component matrix ........................................................................... 42
Table 7 Demographic profile of respondents ............................................................ 43
Table 8 Respondents’ shopping habits ...................................................................... 44
Table 9 Important factors when choosing an online shop ......................................... 45
Table 10 Descriptive statistics of website design ........................................................ 45
Table 11 Descriptive statistics of reliability ................................................................ 46
Table 12 Descriptive statistics of responsiveness ....................................................... 47
Table 13 Descriptive statistics of trust ........................................................................ 48
Table 14 Descriptive statistics of personalisation ....................................................... 49
Table 15 Descriptive statistics of the overall e-service quality and its dimensions .... 49
Table 16 One-way ANOVA – website design ............................................................ 50
Table 17 One-way ANOVA – reliability .................................................................... 51
Table 18 One-way ANOVA – responsiveness ............................................................ 51
Table 19 Gabriel’s Post Hoc Tests – responsiveness .................................................. 51
Table 20 One-way ANOVA – trust ............................................................................. 52
Table 21 Gabriel’s Post Hoc Tests – trust ................................................................... 53
Table 22 One-way ANOVA – personalisation ............................................................ 54
Table 23 One-way ANOVA – e-service quality ......................................................... 54
Table 24 Gabriel’s Post Hoc Tests – e-service quality ................................................ 54
Table 25 Summary of results for all hypotheses ......................................................... 56
Appendix
Appendix 1 ...................................................................................................................... 81
Appendix 2 ...................................................................................................................... 82
Appendix 3 ...................................................................................................................... 82
v1 Introduction
The first chapter of this thesis provides a general introductory background to the topic.
Moreover, the problem that the thesis intends to solve has been discussed. Furthermore,
the precise purpose of the thesis, together with the research questions, have been
formulated. Finally, the delimitations of the study are also defined, and key terms are
explained.
1.1 Background
Since the beginning of human existence, the exchange of goods, now known as trade or
commerce, has been an integral part of survival (Mourya & Gupta, 2014). However, with
the development of the global network, which is the internet, and the increase in the
number of devices that can access it, trade has moved into the virtual space. As a result,
electronic commerce has become incredibly popular and meaningful (Kumar, 2019).
In general terms, electronic commerce (e-commerce) is the process of buying and selling
goods through electronic devices (Mourya & Gupta, 2014). According to Kollmann
(2019), e-commerce refers to the use of stationary computer terminals as information
technology to offer and sell real or electronic goods and services via information,
communication and transaction processes between network participants, with the focus
on actual sales.
Currently, the e-commerce market is thriving year after year (Gemius & Izba Gospodarki
Elektronicznej, 2019), undoubtedly influenced by the increase in the number of internet
users (Ohene-Djan, 2008). According to statistics, the number of internet users increased
significantly between 2005 and 2021. While in 2005, the number was 1.0 billion, in 2021,
the number increased to as many as 4.9 billion internauts (ITU, 2021). Regarding the
dominant country in terms of the number of internet users, China was the undisputed
leader in 2019, followed by India and the United States of America (Internet World Stats,
2021). In addition, an upward trend can also be observed in terms of daily time spent
online worldwide, which averaged 75 minutes in 2011, while in 2021, it reached 192
minutes (Zenith, 2019).
As internet usage rises, online transactions rise as well, and consumers are getting more
used to buying products online. This led to global retail e-commerce sales of 4.9 trillion
1U.S. dollars in 2021, compared to just 1.3 trillion U.S. dollars in 2014 (eMarketer, 2022).
Further, in 2020, it was reported that, on average, around 85% of consumers worldwide
shopped online. Asia and South America proved to be the leaders, where up to 86% of
consumers made online purchases. In Europe, the value was slightly lower, reaching 83%
(Sponsorpulse, 2020). The most popular online sales marketplace globally is Amazon,
followed by eBay with 5.2 and 1.7 billion visitors per month, respectively. By
comparison, companies that operate both online and offline (omnichannel merchants;
bricks-and-clicks) achieve significantly lower visitor figures. Examples include
Walmart.com and Target.com, which have only 410.3 and 182.2 million monthly visitors,
respectively (Web Retailer, 2021).
Since internet usage has increased drastically over the last few years, electronic commerce
became a significant role in many companies to fulfil the expectations of today’s
consumers, which has led to growth in the online transaction market (Mourya & Gupta,
2014). As a result, the e-commerce market has become highly competitive. Therefore, the
prevailing situation prompts entrepreneurs to develop a strategy that will be most
competitive in this market (Vásquez & Vera-Martínez, 2020). As it turns out,
concentrating on services is crucial in a highly competitive environment (Griffith &
Krampf, 1998; Rita et al., 2019; Santos, 2003). Even if it was initially thought that the
presence of a website and a low price were enough to achieve success, this was soon no
longer to be believed (Parasuraman et al., 2005). Increasingly, electronic service quality
(e-service quality, online service quality), understood as “the extent to which a Web site
facilitates efficient and effective shopping, purchasing, and delivery” (Parasuraman et al.,
2005, p. 217), is considered an essential aspect for success in the e-commerce market
(Fassnacht & Köse, 2007; Santos, 2003; Zeithaml, 2002).
A widely known model for measuring the quality of a company’s services is SERVQUAL
(Yarimoglu, 2014), initially consisting of ten dimensions of service quality, which have
been sharply reduced to the following five dimensions: tangibles, reliability,
responsiveness, assurance and empathy (Parasuraman et al., 1988). However, in an online
environment, e-service quality can vary significantly due to unique features of e-services
that services in bricks-and-mortar environments do not possess. Thus, measuring service
quality in the online setting requires an adjusted model (Blut et al., 2015; Collier &
Bienstock, 2006). Several attempts have been made in the literature to develop a model
2of e-service quality in the online world (Lee & Lin, 2005; Li et al., 2002; Parasuraman et
al., 2005; Santos, 2003; Wolfinbarger & Gilly, 2002; Yoo & Donthu, 2001; Zeithaml et
al., 2002). One of the authors who adapted the SERVQUAL model to the online shopping
context was Lee and Lin (2005). They distinguished the following dimensions of e-
service quality: website design, reliability, responsiveness, trust and personalisation.
Applying online service quality measurement models, researchers have proven that
e-service quality is a key performance factor in online retailing (Parasuraman et al., 2005;
Zeithaml, 2002), affecting many aspects of e-commerce, such as trust in the e-retailer
(e-tailer) (Hsu, 2008; Hwang & Kim, 2007), customer satisfaction (Cristobal et al., 2007;
Fassnacht & Köse, 2007; Lee & Lin, 2005; Swaid & Wigand, 2007), and loyalty (Swaid
& Wigand, 2007).
Research in e-service quality can help businesses operating in the e-commerce market
develop a competitive strategy based on improving the quality of e-services offered.
However, for businesses that want to expand their presence to new e-sales sites or start
distributing their products over the internet, they first need to face the challenge of
choosing the best online sales channel. Currently, three main types of e-channels can be
distinguished, that manufacturers can use to reach consumers. These are the marketplace,
a reseller and web-store channel (Alaei et al., 2022). An electronic marketplace is a
multisided platform (Boris, 2018; Parker et al., 2016) that allows many sellers (both
brands and individuals) to offer their products to customers in return for fee to the online
retailer (Fan et al., 2013; Kawa & Wałęsiak, 2019). On the contrary, in the reseller
channel, online retailers purchase products from manufacturers for wholesale prices and
sell them to end consumers at retail prices (Oh, 2021; Tian et al., 2018). In contrast, a
web-store channel is a brands’ online shop, through which manufacturers sell their
products directly to the end customers (Alaei et al., 2022).
As can be seen, each online sales channel has a different way of doing business and,
therefore, may also be perceived differently by consumers in terms of e-service quality
(Herhausen et al., 2015; Kawa & Wałęsiak, 2019; Oh, 2021; Oracle, 2018; Steinfield,
2004). Consequently, the decision to choose a particular channel to sell products should
be driven by the perceived e-service quality in that channel, as this is a key success factor
in the e-commerce market (Fassnacht & Köse, 2007; Santos, 2003; Zeithaml, 2002).
3However, the question left is what impact does the type of online sales channel has on the
perceived quality of its services?
1.2 Problem Discussion
The emergence of the internet, which has become an essential part of modern life, and
the development and growth of e-commerce have made this market highly competitive
(Akram et al., 2018; Khalifa & Liu, 2004; Rita et al., 2019; Swaid & Wigand, 2007). For
companies selling online, this can mean difficulty attracting and retaining customers and
satisfying them (Devaraj et al., 2002; Khalifa & Liu, 2004; Swaid & Wigand, 2007).
Moreover, the growth of e-commerce and the new emerging sales channels have made it
challenging for manufacturers to choose the best channel to sell their products (Alaei et
al., 2022). Nevertheless, this does not deter entrepreneurs; on the contrary, the internet is
increasingly attracting their attention (Vásquez & Vera-Martínez, 2020).
However, to have a chance of success in the e-commerce market, a competitive strategy
needs to be developed, and, as it turns out, the quality of e-services plays a key role in
this process (Fassnacht & Köse, 2007; Santos, 2003; Zeithaml, 2002). Therefore, striving
for superior e-services should be the primary strategy of e-tailers who want to differentiate
themselves from the competition, keep customers satisfied and increase their chances of
succeeding in the market (Hsu, 2008; Rita et al., 2019). Similarly, for manufacturers who
choose an online sales channel for their products, the perceived quality of the channel’s
e-services should determine the choice. However, many companies do not fully
understand what consumers expect in each sales channel, causing them to be characterised
by the delivery of poor-quality e-services (Zeithaml, 2002). Therefore, to deliver the
highest quality e-services and choose the best e-channel for selling goods, companies
must first understand how consumers across different online channels perceive it
(Parasuraman et al., 2005).
Zeithaml (2002) suggests that comparing a company’s perceived service quality across
offline and online channels would be valuable to a company’s managers. However, as
traditional sales channels are increasingly being replaced by e-channels (Blut et al., 2015),
comparing consumer perceptions of the e-service quality provided across different online
sales channels is becoming increasingly important for both researchers and practitioners.
4Consumers tend to exhibit an enhanced trust in shops operated directly by manufacturers,
i.e., the web-store channel. This is because manufacturers are especially concerned with
protecting the brand’s value and reputation in customers’ eyes, so they will also be more
motivated to complete orders faster than other types of shops (Oracle, 2018). Therefore,
it can also be said that the web-store channel will be perceived as more reliable (Janda et
al., 2002). Moreover, consumers may trust the manufacturer’s online shops more than
other online sales channels, as they are convinced that they can only buy original products
there. Thus, consumers believe that buying in the web-store channel avoids the risks of
buying fake products or fake e-sellers (Oh, 2021). Furthermore, consumers buying
through the manufacturer’s own websites may receive a higher degree of individual
treatment and personalisation than, for example, in the marketplace channel, where
contact with the seller is often difficult, and a personalised approach from the owner of
the marketplace platform is relatively uncommon (Kawa & Wałęsiak, 2019). Besides that,
Wolfinbarger and Gilly (2003) identified that the design of a website of internet retailers
has an impact on customer quality judgments, satisfaction, and loyalty. Finally, research
shows that integrating online and offline channels positively impacts the perceived
quality of an online shop’s services and increases trust towards it but negatively affects
the responsiveness of the channel. Additionally, given that only the reseller and web-store
channels are capable of offline sales, one can speculate that the perceived quality and
responsiveness in the marketplace channel will differ from the others (Gummerus et al.,
2004; Herhausen et al., 2015; Steinfield, 2004). Based on the above and considering that
trust, reliability, individual approach, otherwise called personalisation, website design
and responsiveness are among the dimensions of e-service quality, the authors of this
paper believe that there may be differences in the perceived quality of e-services between
types of online sales channels.
Knowledge of the impact of the type of online sales channel on the perceived quality of
their e-services would help manufacturers make a more accurate decision on the choice
of e-channel for selling their products. Furthermore, identifying the e-service areas that
customers perceive to be of poor quality would allow e-commerce companies to improve
the e-service quality, thereby increasing their efficiency and attractiveness, ultimately
contributing to increased customer satisfaction (Grönroos et al., 2000).
5Nevertheless, the literature review did not find any empirical support for investigating
differences in perceived e-service quality across different online sales channels, thus
establishing the influence of online sales channel type on perceived e-service quality.
Therefore, this paper will attempt to fill this gap.
1.3 Purpose and Research Questions
The main objective of this thesis is to determine whether there are differences in
consumers’ perceptions of e-service quality, as a composition of five dimensions,
depending on the type of sales channel in the e-commerce market. In other words, the
thesis seeks to discover whether the type of online sales channel affects consumers’
perceived e-service quality of the channel. Ultimately, the work intends to allow the
authors to identify consumers’ best perceived online sales channel regarding e-service
quality. On this basis, the following research questions were formulated:
RQ1: (a) Does e-service quality perception differ significantly across different online
sales channels? (b) If so, then which dimensions of e-service quality are perceived
differently?
RQ2: Which online sales channel is perceived to provide the highest e-service quality?
This thesis examines the problem from a both managerial and theoretical perspective.
Regarding the managerial perspective, it focuses on the viewpoint of manufacturers,
managers and/or owners of online sales channels and entrepreneurs who are just planning
to launch their own sales channel in the e-commerce market. In the case of theoretical
perspective, the research conducted for this thesis contributes to pushing the research on
e-service quality and e-channels forward. Following the above, this paper seeks to explain
perceived e-service quality in the context of different online sales channels since there is
limited empirical support in this area.
1.4 Delimitations
For this research study, some delimitations need to be considered. In terms of a
geographical focus, the research does not concentrate on a purely national market but
limits its market to the European Union. However, it is worth emphasising that this paper
does not intend to examine differences in e-service quality perception depending on
nationality. Furthermore, this research is narrowed down to one age group, namely
Generation Y. Thus, the obtained findings can only be applied to this target group.
6Moreover, although different types of transactions such as business-to-business (B2B),
business-to-consumer (B2C), business-to-government (B2G) or consumer-to-consumer
(C2C) are carried out in the e-commerce market (Zorayda, 2012), this paper will only
focus on the B2C market. This means it will only address companies that offer online
sales of their products to consumers and, therefore, will examine e-service quality
perception from the consumers’ point of view. Finally, the study is not intended to
generalise the results to all industries. It will focus more on online sales channels that
offer higher-priced products such as electronic devices, including smartwatches.
1.5 Definitions
E-service quality – E-service quality is defined as the overall subjective evaluation of
the quality and excellence of a virtual marketplace by customers (Santos, 2003). In other
words, it describes the assessment of whether the receiving service meets and exceeds the
customers’ expectations (Parasuraman et al., 1988).
SERVQUAL model – This model is a multi-item scale model used to evaluate service
quality. The original model involves five dimensions, namely tangibles, reliability,
responsiveness, assurance, and empathy (Parasuraman et al., 1988). A reformulation was
suggested to implement this model for e-service quality (Santos, 2003; van Riel et al.,
2001). The resulting dimensions are website design, reliability, responsiveness, trust and
personalisation (Lee & Lin, 2005).
Website design – The design of a website is defined as the appeal and usability that user
interface design provides to customers (J. Kim & Lee, 2002). Website design factors are
predictors of customer quality judgments, satisfaction, and loyalty for internet retailers
(Wolfinbarger & Gilly, 2003).
Reliability – The term reliability can be described as the ability of a website to complete
orders correctly and faultless, deliver promptly, and keep customers’ personal
information secure (Janda et al., 2002; Kim & Lee, 2002; Parasuraman et al., 1988).
Responsiveness – The dimension responsiveness relates to the frequency an online shop
provides services voluntarily that are important to their customers. These relate to services
like information retrieval, speed of navigation or general customer inquiries (Kim & Lee,
2002; Parasuraman et al., 1988; Yang, 2001).
7Trust – Trust is defined as the customer’s belief or expectation that the seller’s word or
commitment can be relied on and that the seller will not exploit the consumer’s
weaknesses (Jarvenpaa et al., 1999). It can be understood as a precondition of
participation in commerce generally but especially in online surroundings because this
gives online shops the chance to adjust easier (Reichheld & Schefter, 2000).
Personalisation – The terminology personalisation includes different options for the
customer within the purchase decision process, such as individualised attention, personal
thank you notes from online shops, and the availability of a message area for customer
questions (Yang, 2001).
Online sales channel – An online sales channel is a platform or online shop through
which companies can distribute their products or services to reach consumers. There are
three main types of online sales channels: marketplace, reseller and web-store channel
(Alaei et al., 2022).
Marketplace – A marketplace is an electronic sales platform that offers products from
multiple sellers and allows buyers to purchase them (Kawa & Wałęsiak, 2019). It thus
enables manufacturers, for a sales fee, to offer their products directly to consumers
without having to set up an online shop (Alaei et al., 2022; Tian et al., 2018). Since this
study focuses only on the B2C market, marketplaces refer to platforms on which
companies offer products to final consumers.
Reseller channel – The reseller channel is another type of online sales channel through
which manufacturers can indirectly reach consumers (W. Yan et al., 2018). It involves
manufacturers reselling their products to an e-retailer at a wholesale price who then sells
them to the end consumer at a retail price (Alaei et al., 2022; Oh, 2021; Tian et al., 2018).
Web-store channel – A web-store channel is an online shop owned by a manufacturer
who simultaneously plays the role of a seller. In this channel, the manufacturer uses its
own online shop to distribute its products and directly reach the end buyers (Alaei et al.,
2022).
Generation Y (Millennials) – The authors of this paper adopted the definition of
Generation Y from Putra, Widjaja and Wahyono (2021). They define millennials as
people born between 1981 and 2000.
82 Literature Review
The purpose of this chapter is to provide the theoretical background to the thesis topic.
Therefore, at the very beginning, a literature review for the concept of e-service quality
was conducted, followed by a discussion of the three main online sales channels. The
chapter concludes with a detailed discussion of e-service quality dimensions, based on
which hypotheses are formulated, and the conceptual model is presented.
2.1 E-service Quality
E-service quality is evaluated by the customers themselves. Customer evaluations include
the quality and satisfaction of the e-service they receive in the virtual market (Rahayu &
Saodin, 2021; Santos, 2003). Parasuraman et al. (2005) emphasise that e-service quality
only emerges when the purchase transaction and delivery have taken place efficiently and
effectively. Wolfinbarger and Gilly (2003) also emphasise a similar attitude towards
e-service quality but go one step further. According to them, e-service quality does not
start during the checkout process but begins with the customer’s general information
search, followed by the website’s navigation, the ordering process, the interaction with
the customer, the delivery, and finally, the satisfaction with the delivered product itself
(Vásquez & Vera-Martínez, 2020; Wolfinbarger & Gilly, 2003).
However, e-service quality originates in the offline prevailing service quality that a
consumer experiences in retail. Parasuraman et al., (1985) define service quality itself as
a comparison of customers’ expectations and perceptions regarding the service they get.
The following definition functioned as a foundation to build a model for service quality
evaluation:
“The overall evaluation of a specific service firm that results from comparing that firm’s
performance with the customer’s general expectations of how firms in that industry
should perform” (Parasuraman et al., 1988, p. 15).
The model resulting from this definition is called the SERVQUAL model and builds a
multidimensional assessment tool to measure a company’s service quality. The model
comprises five different dimensions, namely tangibles, reliability, responsiveness,
assurance, and empathy (Parasuraman et al., 1988).
9Whereas the dimension tangibles comprises the physical facilities and the appearance of
the staff, responsiveness deals with the willingness to provide the customers with help
and prompt service. Assurance consists of the personnel’s know-how, which leads to
customer trust and confidence. Additionally, empathy includes the attention the personnel
provide the customer. The customer expects caring and individualised attention to assess
service quality as contentedly. Lastly, the dimension reliability refers to the ability to
deliver the promised service in a dependably and accurately way (Lee & Lin, 2005).
However, due to the differences between web-based and traditional customer service,
companies faced challenges in evaluating service quality in an online environment (Li et
al., 2002b). Also, Parasuraman and Grewal (2000) questioned if the relative importance
of the dimensions mentioned above will change if the customer interacts with technology
instead of service personnel. Therefore a reformulation of the different dimensions to use
them meaningfully in the e-service context was suggested (van Riel et al., 2001).
Santos (2003) tried to formulate such a framework since the literature did not provide a
detailed framework for a comprehensive understanding of the determinants of e-service
quality. The framework suggests that each dimension should include five or six
determinants. Additionally, it proposes that the dimensions are incubative and active.
Later in the literature, based on the SERVQUAL model mentioned above and under
consideration of online shopping characteristics, Lee and Lin (2005) reformulated the
dimensions partly to investigate the effect of the dimensions towards overall service
quality, customer satisfaction and purchase intentions. The dimensions that can be used
to determine service quality in an online environment are website design, reliability,
responsiveness, trust and personalisation, further discussed in section 2.3.
2.2 Online Sales Channels
The advent and development of e-commerce have given rise to new electronic sales
platforms for manufacturers to sell their products or services. Among these, three primary
online sales channels can be distinguished to facilitate product distribution and reach
consumers: marketplace, reseller, and web-store channel (Alaei et al., 2022). These online
sales channels will be discussed in the proceeding sections of this thesis.
102.2.1 Marketplace
A marketplace is a platform that allows manufacturers to sell their products straight to
consumers by paying fees to an e-tailer that operates only as an intermediary between
sellers (manufacturers) and buyers (Morley & Parker, 2015; Y. Yan et al., 2018). In other
words, a marketplace is a place that brings together products from many different sellers
and then sells them to consumers in exchange for a sales fee (Kawa & Wałęsiak, 2019;
Tian et al., 2018). It is an online sales channel that enables manufacturers to sell products
without setting up online shops. Furthermore, the marketplace platform is characterised
by the fact that the manufacturer defines the retail price and has direct access to consumers
(Alaei et al., 2022; Tian et al., 2018).
A marketplace platform brings many benefits to companies that distribute their products
through this sales channel. One of the critical advantages for sellers is the platform’s
brand recognition. It is particularly important in the case of little-known companies
because it increases their credibility. Another benefit is the possibility to reach a broad
audience, both at the national and international levels. Companies selling through
marketplaces do not need to know the legal requirements or incur financial expenses to
run their own sales channel, which lowers the entry barriers (Kawa & Wałęsiak, 2019).
Finally, research shows that using a marketplace platform to sell products can attract
consumers to the manufacturer’s e-shop if it has one, which is very beneficial for the
manufacturer (Ryan et al., 2012).
However, one must not forget that this electronic sales platform also has certain
disadvantages for sellers, just like any other solution. The grouping of many sellers, often
offering similar products, within one sales platform leads to very high competition, which
may negatively affect the sales of companies that will in no way stand out from the others
(Kawa & Wałęsiak, 2019). In addition, manufacturers who distribute their products on
the marketplace compete more fiercely than, for example, in the reseller channel, as they
set prices themselves. Thus, there is no one to mitigate the effect of competition (Tian et
al., 2018). The disadvantage of distributing products through this sales e-channel is also
the necessity to bear storage and delivery costs as well as transaction costs, which are
subject to frequent changes, or the condition to place offers according to specific, often
strict, requirements (Kawa & Wałęsiak, 2019; Tian et al., 2018).
11In the case of marketplaces, an important role, especially for sellers, is played by platform
owners, who incur high financial expenditures on advertising the website or building the
brand image. Although these elements are disadvantages for owners of running a
platform, it is another advantage for sellers. Owners also have to deal with the
maintenance and development costs of the service, which can be the greatest difficulty.
In addition, they have no control over the prices of the products sold on their platform.
Another negative aspect of running a marketplace is that the barriers to entry are easy to
cross, so there is a high risk of competition. However, this aspect will be advantageous
for those wishing to start running a marketplace platform (GS1 Polska, 2019; Kawa &
Wałęsiak, 2019; Tian et al., 2018).
Despite the many limitations, some elements are beneficial to platform owners. These
include the low cost of developing IT tools, no need to have warehouses, products or
logistics staff, and associated costs (GS1 Polska, 2019; Kawa & Wałęsiak, 2019; Tian et
al., 2018).
Consumers shopping on a marketplace platform can also benefit from this. The ability to
choose from various products from different suppliers on one site is undoubtedly an
advantage for them. In addition, they do not have to learn how to navigate through
different websites constantly. Moreover, some marketplace platforms offer buyer
protection programmes to feel safer (GS1 Polska, 2019; Kawa & Wałęsiak, 2019).
However, there are also opposing sides to shopping in this online sales channel. Namely,
customers may find it difficult to deal directly with the seller, and they may not experience
personalised treatment from the marketplace. There is also the disadvantage for buyers of
paying separate delivery charges when ordering products from different suppliers and
their delivery at different times (GS1 Polska, 2019; Kawa & Wałęsiak, 2019; Tian et al.,
2018).
2.2.2 Reseller Channel
Despite the strong growth in the popularity of marketplaces (Kawa & Wałęsiak, 2019;
Tian et al., 2018; Y. Yan et al., 2018), not all companies use this channel. Some
manufacturers choose to work with online retailers who act as resellers. In this channel,
called the reseller channel, the manufacturer sells the product wholesale to an e-tailer,
who then sells it to end consumers at retail price. Therefore, the manufacturer only
12indirectly reaches the buyers. Moreover, unlike the marketplace platform mentioned
earlier, in the reseller channel, the e-tailer is free to set the retail price (Alaei et al., 2022;
Oh, 2021; Tian et al., 2018; W. Yan et al., 2018).
The motives that induce manufacturers to distribute products via a reseller are usually
related to a greater potential for market penetration and the possibility of spreading
products to new markets. Moreover, lower costs, resulting from the absence of the need
to have own distribution network, e-commerce site, inventory maintenance or buyer
search, are also advantageous for the manufacturer. Therefore, it can be said that using
the reseller channel allows the manufacturer to reduce risk. Finally, the manufacturers are
also not responsible for activities that are designed to meet additional customer needs,
such as, for example, packaging or delivery according to specific requirements (Czubata,
2001; Oh, 2021; Piasecka-Głuszak, 2011; Pisz et al., 2013)
In contrast, the negative aspects of using this type of channel include the lack of control
related to pricing, promotion, and even the selection of target consumers. What is more,
when investing in promotional activities, the reseller focuses on building brand awareness
of his shop, thus excluding the manufacturer’s brand name. Other disadvantages include
long payment terms and the risk of conflicts in the channel caused, for example, by the
reseller’s failure to honour his commitments. In addition, it is worth emphasising that in
this channel, the reseller has control over the manufacturer and not vice versa and can
therefore manipulate it to force down wholesale prices under the threat of blocking market
entry through its sales channels (Czubata, 2001; Oh, 2021; Piasecka-Głuszak, 2011; Pisz
et al., 2013).
Notably, in the reseller channel, the seller is the platform owner and not the companies
distributing their products through this channel, as in the marketplace channel. Operating
an online sales channel as a reseller gives the owner power over the manufacturer.
Therefore, it allows him to control and manipulate the manufacturer with intimidating
demands. In addition, the reseller sets the final prices of the products and carries out
advertising campaigns without the need for intervention or approval from the
manufacturer (Oh, 2021; Tian et al., 2018). Further advantages of the reseller channel in
the e-commerce market depend on whether it is purely online (virtual merchant) or
whether the owner has an online and offline sales channel (omnichannel merchants;
bricks-and-clicks). The unquestionable advantage in the case of pure online sales is that
13there is no need for physical shops and, therefore, no associated costs. With bricks-and-
clicks, on the other hand, retailers benefit from access to a national customer base,
warehouses and trained staff (Laudon, 2017).
However, being an owner of a reseller channel also has its negative aspects, mainly
related to costs. Firstly, the reseller must incur high marketing expenses and efforts to
promote brand awareness and thus increase market share (Oh, 2021). Furthermore, he
must bear order fulfilment costs such as inventory, storage and transport (Tian et al.,
2018). What is more, virtual merchants also do not have low customer acquisition costs,
so in order to attract enough customers to cover expenses, they must perform high
operational efficiency and build a brand as fast as possible. In contrast, omnichannel
merchants must cover building maintenance and sales staff costs. Finally, they also face
the challenges of coordinating pricing between channels and managing returns of items
bought online at physical retail shops (Laudon, 2017).
From the consumer’s point of view, one of the biggest advantages of buying from a
reseller online shop is that they have access to a wide range of products from many brands,
all within one place. Therefore, it makes it easy for consumers to find the desired product
in terms of both quality and price (Vu, 2022). In addition, with an omnichannel merchant,
a consumer has the benefit of being able to see the product before buying it online and, if
it does not meet expectations, returning it later in a physical location (Laudon, 2017).
However, consumers buying products from reseller-operated online shops also have to
reckon with negative aspects. Namely, the prices offered by the reseller may be higher
than in other online sales channels. The reason is that by setting product prices, the reseller
is trying to mitigate competition between suppliers, i.e., the companies that sell their
products to him for resale (Tian et al., 2018).
2.2.3 Web-store Channel
The web-store channel is the last major type of online sales channel. In this case, the
manufacturer sells its products straight to the end consumer, using its own online shop.
In this situation, the manufacturer also acts as a seller, analogous to the marketplace
channel. Therefore, at first glance, it can be said that the marketplace and web-store
channels are similar, but there is a significant difference between them. Namely, in the
case of an electronic sales platform such as the web-store channel, the manufacturer uses
14its own online shop to reach consumers and therefore does not have to pay any fees to the
online retailer - as is the case with the marketplace platform (Alaei et al., 2022).
Selling products directly to consumers through an own online shop is an attractive method
for manufacturers to sell on the e-commerce market. This is due to the lack of fees for
owners of marketplace platforms and the possibility of setting higher margins, which can
ultimately lead to higher profits (Laudon, 2017; Oh, 2021).
However, there are also some negative aspects of running a web-store channel from a
manufacturer’s perspective. Namely, manufacturers running their own online shop must
develop a responsive online ordering and fulfilment system. Furthermore, they must
manage customer acquisition themselves, which is often difficult, especially for less
known brands (Laudon, 2017).
Purchasing products directly from the manufacturer’s online shop also offers several
advantages for consumers. Firstly, by ordering directly from the manufacturer, consumers
can expect better prices than, for example, by purchasing from a reseller’s e-shop. In
addition, consumers can then be sure that the products they buy are original. Finally, the
possibility of direct contact with the product’s brand is a definite advantage in customers’
eyes because it makes the communication path in case of a problem shorter (Oh, 2021).
Interestingly, the literature review did not reveal any disadvantages for consumers buying
directly from manufacturers’ online shops. When looking at the advantages of the
previously mentioned online sales channels, it can only be concluded that in the case of
the web-store channel, consumers do not experience the possibility to choose from a
multitude of products from many brands. What is more, each time they buy products from
different brands’ online shops, they have to face the challenge of getting to know the
website’s functionality and layout.
The availability of three online sales channels gives companies wider opportunities to
distribute products. It may also increase their chances of success in the e-commerce
market. However, at the same time, the companies face the difficult challenge of choosing
the best channel to sell their products and face high competition (Alaei et al., 2022; Rita
et al., 2019). As can be seen above, each online sales channel has different business
characteristics and thus different consumer approaches. This results in different
advantages and disadvantages in the eyes of consumers, which ultimately leads to
15different consumer perceptions. A key factor for companies choosing the best online sales
channel to sell their products is the perceived quality of the e-services of that online
channel. The perceived e-service quality is a crucial element in the channel selection
decision process, as it is considered an essential aspect of success in the e-commerce
market (Fassnacht & Köse, 2007; Santos, 2003; Zeithaml, 2002). Similarly, for
companies already operating their own sales channels, the perceived quality of e-services
is a vital element to improve their existing services and stand out from the competition
(Hsu, 2008; Rita et al., 2019). Therefore, to choose the right sales e-channel and thus
reduce the risk of market failure or increase chances of standing out from competitors,
companies need to be aware of how the quality of e-services is perceived in a given
channel and take further steps on this basis (Parasuraman et al., 2005).
Accordingly, this paper will attempt to examine the perceived quality of e-services in a
given online sales channel, thus establishing the impact of sales e-channel type on the
perceived e-service quality.
2.3 Hypotheses Development
The perceived quality of e-services is a composite construct of five service quality
dimensions tailored to the online shopping market. These dimensions include website
design, reliability, responsiveness, trust and personalisation (Lee & Lin, 2005). These will
now be discussed in more detail.
2.3.1 Website Design
Website design represents the evolution of the original dimension tangibles. Van Riel et
al. (2001) proposed a reformulation of tangibility into the user interface. Lee and Lin
(2005) proposed the wording website design, which includes the user interface factor,
thus adhering to the suggestions in the literature. The website design is evaluated as the
attractiveness of the user interface (J. Kim & Lee, 2002), thus representing a decisive
quality factor for an online shop (Ranganathan & Grandon, 2002). This was also
investigated by Cho and Park (2001), who concluded that customer satisfaction is
evaluated by the quality of the website design. Another study supports this finding by
detecting that the design of a website exerts a strong influence on the evaluation of
quality, satisfaction, and loyalty of customers (Wolfinbarger & Gilly, 2003).
Additionally, Lee and Lin (2005) emphasise the importance of the website design since
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