Service failures in E-retailing: Examining the effects of response time, compensation, and service criticality

Abstract

This study investigates the role of response time in recovering from service failures taking place in the e-retail context. Employing an experimental design, the study reveals that customers construe time in abstract terms. Response time during service recovery is evaluated in combination with the compensation rendered by the firm and the criticality of the service experience. The extent to which the three factors – response time, compensation and criticality – activate abstract construals matters to customers. The study demonstrates that delaying the proess of recovery can result in customer satisfaction, repatronage and positive word of mouth, when apology is provided and criticality of the service is low. Notably, customers are likely to accept delay if their negative emotions are low. This study advances a novel perspective on the role of response time in online service failure and recovery. Importantly, it provides empirical evidence on the viability of delayed recovery following service failures in e-retailing. The study challenges the conventional wisdom that delayed recovery is inefficacious. It also suggests that the effectiveness of delayed recovery, as advocated in past research, needs to be revisited in the light of customer construals. Key managerial implications and avenues for future research are outlined in the study.