Cakir, Gültekin (2023) Strategic Assortment Decisions in Omnichannel Retailing: The Design and Evaluation of an Omnichannel Assortment Ontology for Consumer Confusion. PhD thesis, National University of Ireland Maynooth.

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Abstract

Consumer confusion is a phenomenon observed in retail settings where consumers feel irritation or frustration during the shopping journey. Consumers can be overwhelmed by assortment size, complex product variety, brand similarities, information inconsistencies or by intense stimuli from store atmospherics inducing information overload, leading to adverse reactions. Oftentimes, these experiences result in various negative short- and long-term consequences such as helplessness, purchase abandonment, dissatisfaction, or loss of trust or loyalty, thus representing a crucial challenge for retailers to prevent or mitigate. Consumer confusion has been studied extensively in a single-channel context, for instance, by investigating information overload phenomena in online shopping situations or examining increased choice sets resulting from large assortment sizes in physical stores. However, although omnichannel retailing has become the current state-of-the-art in the retail industry today, consumer confusion research from an omnichannel perspective is still very scarce. With the increased adoption of the omnichannel strategy by retailers that allow free switching behaviour for their customers during their shopping journeys, a new dimension to the consumer confusion phenomenon is observed. Customers are not only exposed to potential confusion at a specific retail situation in a single channel but are now confronted with potential new negative experiences while comparing products, prices, or information across channels. Particularly, when confronted with assortment inconsistencies across channels while switching channels, customers can experience irritation, frustration, or annoyance if the desired item is not to be found on the other channel, leading to adverse reactions that can potentially impact the retailer's financial performance. Prior literature has considered consumer confusion induced by assortment size, variety, or layout, but neglected its occurrence from assortment inconsistencies across channels from a channel switching perspective so far. This thesis focuses on the consumer confusion phenomenon resulting from assortment inconsistencies across channels from a channel-switching perspective in omnichannel retailing. Strategic assortment decisions in omnichannel retailing involve the coordination of the assortment between channels. Retailers can decide to realise a “Full”, “Asymmetric”, or “No Integration” approach for their assortment across channels. These strategic assortment decisions are taken at the Marketing-Operations-Interface (MOI), an interface harmonizing oftentimes conflicting relationships between objectives of the marketing and operations functions of the retailer. Although identical assortment across channels seems to be the desired solution to prevent consumer confusion (representing an objective from the marketing function), retailers oftentimes apply partial integration to benefit from channel-specific advantages such as the Long Tail effect (representing an objective from the operations function) which is detrimental to consumer confusion prevention. Retailers seem to neglect the significance of consumer confusion while making strategic assortment decisions at the MOI indicating that the phenomenon is not sufficiently explored or captured in an omnichannel context. Retailers appear to lack knowledge of the relevant concepts, dimensions, and consequences of the consumer confusion phenomenon. As a result, retailers are likely to fail in addressing and preventing the occurrence of the consumer confusion phenomenon in an omnichannel context. Current studies on strategic assortment decisions and consumer confusion in omnichannel retailing are very scarce and primarily based on experimental studies with a strong lack of empirical contributions. More importantly, none of the studies considers channel switching behaviour in the context of consumer confusion although representing the primary condition for the phenomenon to occur. There is a need for the integration and alignment of knowledge capturing the domains for strategic assortment decisions, the consumer confusion concept, and its short- and long-term consequences from a channel switching behaviour perspective in order to inform strategic assortment decisions at the MOI. Ontologies are explicit and formal specifications of shared conceptualisations that can structure and link information of specific domains and thus are a suitable technique for knowledge representation. Grounded on a Design Science project, this research designs and develops an ontology-based knowledge representation that captures and aligns domain knowledge on strategic assortment decisions, the consumer confusion concept and its consequences from a channel switching behaviour perspective in an omnichannel retailing context. The literature- and practitioner-informed Omnichannel Assortment Ontology for Consumer Confusion is able to integrate and represent relevant concepts and their relationships at the MOI in order to inform omnichannel retailers on the link between strategic assortment decisions and the consumer confusion phenomenon. The ontology is instantiated and evaluated through a System Dynamics model based on a case study that demonstrates successfully its ability to inform omnichannel retailers on strategic assortment decisions and the consumer confusion concept at the MOI. This study contributes to theory and practice in various ways. From a theoretical perspective, this is the first study to link strategic assortment decisions with the consumer confusion concept from a channel switching behaviour perspective. The solution design embodies novel design knowledge on the construction of an ontology-based knowledge representation. Moreover, the study enhances the fields of omnichannel assortment, consumer confusion, and channel switching behaviour research by introducing novel concepts, tools, and an improved understanding of the domains and their interplay with each other. From a managerial perspective, the ontology effectively serves as a knowledge reference that is able to guide strategic decision-making in assortment integration for omnichannel retailers at the MOI. This allows omnichannel retailers to identify and mitigate potential adverse consumer reactions induced by consumer confusion, thus eventually preventing financial impact on their retail performance.

Item Type:	Thesis (PhD)
Keywords:	Strategic Assortment Decisions; Omnichannel Retailing; Design; Evaluation; Omnichannel Assortment Ontology; Consumer Confusion;
Academic Unit:	Faculty of Social Sciences > School of Business
Item ID:	17557
Depositing User:	IR eTheses
Date Deposited:	18 Sep 2023 10:47
URI:
Use Licence:	This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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