Service Failure and Recovery in Electronic Retailing

Abstract

Appropriate vendor response to service failures (i.e., service recovery) may provide a means to strengthen their customer relationships. Service recovery is a well-investigated concept in the bricks-and-mortar environment, and there is a growing body of empirical research exploring service failure and recovery in the electronic environment. The present study addresses a gap in the literature by exploring how vendors recover from service failures with product-oriented transactions (e.g., online purchasing of books, apparel) and with service-oriented transactions (e.g., online banking). Failures and recoveries in product-oriented and service-oriented transactions were explored after the content analysis of 513 customer-reported incidents. The findings show that vendors are not effectively recovering from service failures, regardless of the type of transaction. Results and implications of these findings are also discussed.