Consumer-to-consumer (C2C) online shopping platforms like eBay and Alibaba’s TaoBao are some of the Internet’s most lucrative businesses in terms of both revenues and website visits – and yet they are also a fiercely competitive environment for the sellers who use them, with consumers often only becoming profitable after multiple repeat purchases (Chen, Huang, & Davison, 2016). The biggest threat to sellers’ e-commerce success? Badly-designed websites that send the message that the seller lacks credibility and service quality.

In fact, making a seller’s store or website appealing is essential in C2C contexts, where consumers carefully evaluate each seller due to their perception that shopping on C2C websites is significantly more risky than making a purchase on a traditional B2C platform (Xu, Lin, & Shao, 2010). With website quality being identified time and time again as a cornerstone of e-commerce success (Huang & Benyoucef, 2013), Chen et al. (2016) set out to explore how service, system, and information quality affect buyers’ economic and social satisfaction – and how relational capital (i.e. the relationship that develops between buyers and sellers on C2C platforms) can moderate the influence of satisfaction on repurchase intention.

Based on a survey of TaoBao shoppers, Chen et al. (2016) conclude that information quality (and, to a lesser extent, service quality) influence both economic and social satisfaction – and that, while economic satisfaction is the most important factor influencing repurchases, social satisfaction is only effective at increasing repurchase intention when paired with strong relational capital.

Figure 1. Chen et al’s (2016) model of how website quality affects repurchase intention

Key practical takeaways

The model that Chen et al. (2016) proposed and (for the most part) validated in their research is quite complex – the implications of their results, however, can be implemented relatively easily by sellers:

1. Focus on information quality first, service quality second. Up-to-date and relevant content helps buyers navigate the seller’s site with ease and efficiency, and is the most effective way to increase economic satisfaction. Therefore, sellers should prioritise information content elements such as Q&A in order to stimulate repurchases. Service quality – i.e. the timely handling of shipping and delivery, as well as prompt and polite responses to any issues or questions – can increase social satisfaction, and should be the second area of focus for sellers.
2. Economic satisfaction is a prerequisite for success, and it strongly influences the intention to repurchase. Therefore, sellers should ensure that their price-quality ratio is appealing. However, they should also be aware that price cuts and price promotions are easily copied by other sellers – and therefore should also invest in relational capital as a way to retain customers.
3. Without relational capital, social satisfaction is not effective at increasing repurchases. Sellers should foster trust and mutual respect with buyers by ensuring that payments are processed fairly, that service and product quality are up to par, and by providing buyers with perks such as personalised greeting cards or small gifts/samples included in the packages. Over time, this can build relational capital and buyer loyalty.

 

References

Chen, X., Huang, Q., & Davison, R.M. (2016). Economic and social satisfaction of buyers on consumer-to-consumer platforms: the role of relational capital. International Journal of Electronic Commerce, 21 (2), 219-248.

Xu, B., Lin, Z., & Shao, B. (2010). Factors affecting consumer behaviour in online buy-it-now auctions. Internet Research, 20 (5), 509-526.

Huang, Z., & Benyoucef, M. (2013). From e-commerce to social commerce: a close look at design features. Electronic Commerce Research and Applications, 12 (4). http://dx.doi.org/10.1016/j.elerap.2012.12.003

Consumers can be an incredibly rich source of ideas for product and brand development, and collaborating with them can increase not just R&D productivity (Huston & Sakkab, 2006), but brand competitiveness as well (Bendapudi & Leone, 2003). And while co-creation for innovation is by its very nature one of the closest forms of collaboration between firms and consumers, very little has been said about how engaging in co-creation affects the consumer-brand relationship.

Through a combination of surveys and in-depth interviews conducted to address the above-mentioned paucity of research, Hsieh and Chang (2016) discover a complex relationship between a number of factors in co-creation – such as the perceived benefits of co-creation and the brand-self connection (i.e. the extent to which a consumer feels the brand reflects their core values) – which affect brand co-creation engagement. Engagement, in turn, increases purchase intention and brand citizenship behaviour – which both signify a stronger relationship with the brand.

In simpler terms, when co-creation is done right – when it appeals to the brand-self connection, and when it makes users feel competent, autonomous, and related to the brand – it increases the engagement users feel with both the co-creation platform and the brand. This increase in engagement has positive implications not only for purchase intention, but also for the intention to help others co-creators and offer feedback on their ideas. Therefore, engaging in co-creation projects does not only provide a firm with ideas for innovation – it can actually deepen consumer engagement, which can be leveraged into stronger brand equity as well.

Figure 1. A simplified model of how co-creation projects build engagement and brand benefits

Three principles for designing platforms that maximise co-creation engagement

• Set clear objectives and guidelines, but encourage users to come up with diverse solutions within them. When the goals of co-creation are clear, consumers submit higher quality ideas and feel more competent at handling the task – and higher perceived competency leads to higher engagement. Co-creation tasks that allow users to think outside of the box and apply different skills are more engaging and enjoyable, and thus also lead to more positive brand affect.
• Foster collaboration, not competition. When users encounter strong competition in a co-creation contest, it reduces their perceived self-competence and their level of engagement. On the other hand, a strong co-creation communities and a feeling of relatedness can provide consumers with a sense of belonging and a stronger sense of brand co-creation engagement – which can in turn increase purchase intention and brand citizenship behaviour. Therefore, brands should focus on maintaining a positive and trusting environment on their co-creation platforms, and giving users the opportunity to communicate with both the firm and each other.
• Promote strong brand values. When consumers feel that a brand is congruent with their core values, they are not only more engaged with the brand and more likely to advocate it to their acquaintances – they are also more likely to take an active role in co-creation projects. Ensuring that a brand’s offline communication materials convey the brand’s core values will help breed an active online community.

 

References

Bendapudi, N., & Leone, R.P. (2003). Psychological implications of customer participation in co-production. Journal of Marketing, 67 (1), 14-28.

Huston, L., & Sakkab, N. (2006). Connect and develop. Harvard Business Review, 84 (3), 58-66.

Hsieh, S.H., & Chang, A. (2016). The psychological mechanism of brand co-creation engagement. Journal of Interactive Marketing, 33, 13-26. http://dx.doi.org/10.1016/j.intmar.2015.10.001