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The effect of credit card versus mobile payment on convenience and consumers’ willingness to pay
(2020)
Extant literature on payment methods has focused on comparing cash and credit cards and emphasized the lower pain of paying (i.e., fewer negative consequences) for the latter. This finding, in turn, explains why consumers express higher willingness to pay (WTP) when paying with credit cards. The current study introduces mobile technology as a new payment method to this literature. Specifically, it highlights coenience as a positive driver of increased WTP for mobile payment. However, for consumers to perceive mobile payment as coenient, a personal adoption (enabled through an existing system in the respective country market) is necessary. A set of three studies across several country markets tests these assumptions empirically. Coenience emerges as a new mediator between mobile payment and increased WTP, contingent on personal adoption. These findings thus extend extant literature on the mechanisms consumers use with different payment methods, and they offer differentiated recommendations regarding payment channels for country managers.
Today’s retailers have a strategic imperative to integrate their channels. Some have implemented electronic shelf labels (ESL) to replace paper tags to technologically enable the omnichannel transformation by aligning the presentation of price and product information between online and offline channels. However, consumer reactions to ESL are yet unexplored. They could be positive or negative: on one hand, the fear of frequent price changes, a known phenomenon in e-commerce, could spread to offline channels and reduce consumer purchase intent and overall revenue; on the other hand, ESL could prevent showrooming by signaling price consistency and offering consistent information (e.g., including reviews) between the on- and offline channels. We explore a retailer data set that allows isolating the “mere ESL effect”, as the retailer’s pricing strategy remained unchanged over the introduction of ESL (i.e., no dynamic pricing), but the presentation of the price and product information was integrated through ESL. A difference-in-difference analysis establishes that revenue in product categories in which ESL was introduced grows at the expense of those product categories in which it was not introduced. Visitor numbers are not affected by introducing ESL. This finding supports the adoption of e-commerce capabilities in a brick-and-mortar store as it could help prevent shopper behavior aimed at exploiting channel differences (i.e., showrooming for price or more information).
As a result of the convergence of online and offline retailers, and due to the notoriously low margins in the retail environment, innovation and technology have become more and more competitive differentiators. The purpose of this cumulative dissertation is to explore consumers’ behavioral reactions towards those technological innovations in brick and mortar retailing. As it is not feasible to consider every available technology in its own right, the focus of this dissertation is limited to the following three recent technologies: mobile payment, electronic shelf labels, and electric vehicle charging stations. By conducting experiments (Paper 1 and Paper 3) and leveraging real transaction data from a retailer (Paper 2), the author was able to formulate and investigate various research hypotheses, including a positive influence of new technology on the willingness to pay (Paper 1), mere revenue effect (Paper 2), and shopping intentions (Paper 3).