Iris Publishers_Journal of Textile Science & Fashion Technology (JTSFT)

An Exploratory Study of Consumer Satisfaction and Purchase Behavior Intention of Fashion Subscription- Based Online Services (SOS)

Abstract

Subscription-based online services (SOS) that provide fashion related products are of great interest to consumers and retailers alike. Yet, little is known about consumers who use or have used SOS. This study explored consumers’ motivations, expectations, satisfaction, and purchase behavior intentions regarding fashion SOS using an Expectation-Confirmation Theory (ECT) perspective. A qualitative research approach was utilized to collect interview data from a sample of 12 SOS customers. Findings revealed that consumers’ motivations to try fashion SOS were related to convenience, needing a wardrobe update, and curiosity about the service. Only five out of 12 participants were completely satisfied with fashion SOS that they used, and those participants agreed to receive a scheduled box delivery each month. Consumers liked the convenience of fashion SOS package delivery and ease of website navigation. They were much less satisfied with their fashion SOS experience in terms of the delivered product selection and product quality. Recommendations are provided for retailer competitive strategies with SOS business models and future research suggestions are proposed.

Keywords: Fashion, Subscription-box Online Service, Online Subscription, Satisfaction, Confirmation, Expectation, Purchase Behaviors, Purchase Intentions, Expectation-Confirmation-Theory

Abbreviations: SOS- Subscription-box Online Service; ECT- Expectation-Confirmation Theory

Introduction

A subscription-based service (SOS) is an online business where the company sends the customer a customized box periodically, for a weekly or monthly fee [1]. This business model is not exactly a new business concept, as some have been around for decades (e.g., Wine-of-the-month Club and Columbia House CD Club) [2]. However, with the increased use of e-commerce and mobile shopping, companies like Birch Box, Hello Fresh, Ipsy, and Dollar Shave Club have adopted this business model allowing new ways for consumers to purchase their products [3].

Consumers can purchase from approximately 2,000 different SOS businesses [2], including product categories such as beauty, apparel, pets, kids, food, beverage, art, and lifestyle products [4,5]. Retail analysts’ project that SOS will soon be just another ordinary business channel like e-commerce and brick-and-mortar [2]. However, it is unknown if fashion retailers and e-commerce leaders realize the true potential of what this model can do for their businesses. Roussin I [3] stated, “when a subscription commerce model is implemented successfully, it can boost revenue, enhance customer loyalty, bring in new customers and position the brand as a disruptor in the market.”

Although SOS is a trending topic, few researchers have addressed this business model. Extant research has focused on understanding who the fashion SOS customer is [1], the consumer’s perception of this retail format [6], variables that influence consumer attitude towards fashion SOS [5], and consumer adoption intention [5,6]. However, there is a need to investigate consumers who have already used SOS and establish an understanding of their satisfaction and purchasing behavior intentions. Therefore, the main purpose of this study is to explore customer satisfaction and purchase behavior intentions concerning fashion SOS. Following the Expectation-Confirmation Theory (ECT) [7], this qualitative study addressed the following research questions:

RQ1: What are consumers’ motivations to try a fashion SOS?

RQ2: Are customers of fashion SOS satisfied with their experience based on ECT?

RQ3: What are the purchase behaviors and intentions of fashion SOS consumers?

In order for this business model to be sustainable in the highly competitive fashion market, retailers must understand more fully who is subscribing to fashion SOS, consumers’ thoughts about their experience, and if consumers are satisfied or not. Overall, why consumers choose to cancel their fashion SOS or continue to proceed with it, customer satisfaction, purchase behaviors and intentions pertaining to fashion SOS all warrant further examination. The results of the study will not only fill a literature gap regarding consumer satisfaction with fashion SOS but will also provide fashion business leaders with valuable insight to further develop their business model.

The following literature review will discuss the SOS business model, including three types of SOS. Research related to consumer satisfaction with e-service quality will also be presented, along with information on SOS product evaluation criteria and ECT.

Literature

Subscription-based online services (SOS)

According to Chen T, et al. [8], there are three types of SOS model variations: replenishment, curation, and access subscriptions. In replenishment subscriptions, consumers choose to purchase more simple products that do not change month-to-month in order for them to save money and time (e.g., Amazon Subscribe & Save and Quip). This subscription model would be a more “traditional” approach where people pay a monthly fee for items such as newspapers and magazines [9]. In this model, there is typically no styling service fee.

Curation subscriptions, such as Stitch Fix and Trunk Club, are customized and created by a stylist to fit the needs and wants of the consumer. Consumers do not choose their particular items or see all product offerings, like with other types of subscription services. These curated services typically have some kind of styling fee but are by far the most popular type of subscription box service [8]. The main reason for this popularity is that consumers like the surprise factor [1]. This type of service does not have to be a “subscription” or have a commitment-based approach [9], as some allow you to skip an order as desired or preset a preferred timeframe of shipments.

In access subscriptions, members pay to obtain exclusive benefits such as lower prices and membership perks (e.g., JustFab & Thrivemarket). Compared to replenishment and curation, access subscriptions are the least like a “traditional” subscription service. Amazon, for example, offers perks to only their Amazon Prime Members (e.g., Amazon Prime Wardrobe). The company allows their members to see what they offer and then ship the products with no obligation to buy [6].

Fashion SOS

Due to the ever-changing and competitive fashion retail market, fashion companies must adopt to consumers’ lifestyles and product preferences. Fashion companies, such as Stitch Fix, Le Tote, Shoe Dazzle, Fabletics, Wantable, and Trunk Club, are only some of the many that have adopted the SOS model. Fashion SOS can follow either the curation or access subscription service approach [8] and can have several unique characteristics, which may include customized selected products, customer association or membership, and a home try-on experience [6]. Most fashion SOS companies sell fashion products including apparel, footwear, and accessories.

Consumers of fashion SOS

Consumers who purchase SOS are not only willing to purchase unfamiliar products, but also allow strangers to pick out products and curate the package for them [2]. Woo H, et al. [1] research addressed consumers of fashion SOS businesses. They found that most fashion SOS consumers were female and had a high level of fashion consciousness, as well as high level of e-trust. Chen et al. [8] found similar results, stating that SOS subscribers tended to be younger (25-44) and female. The subscribers lived in more urban environments with income levels from $50,000 to $100,000.

Woo H, et al. [1] emphasize that the shopping experience is different for the SOS consumer. They describe that the SOS consumer does not need to go through stages of product/trend information search, evaluation of alternatives, or product choice. Instead, the fashion SOS has a curator or stylist select the items for the consumer, bundle items in a box, and deliver the selection to the consumer’s front door. The authors discuss that the fashion SOS model resolves modern consumer “decision fatigue”, created by extensive searching on the web to find the right styles or prices, or even making multiple shopping trips to the local mall.

Tao Q, et al. [6] found that there is limited knowledge concerning the services offered by fashion SOS. They also discovered that although consumers do not know much about the services, they perceive strong relative advantages, such as convenience, personalization, consumer excitement, opportunities to try new styles, and opportunity for budget management.

Ramkumar B, et al. [5] work revealed that consumers’ hedonic and utilitarian motivations, as well as high online transaction selfefficacy, positively influenced their attitude toward the SOS service. Based on these findings, consumers had greater intentions to use fashion SOS. Although research indicates baseline information about who the consumers of fashion SOS are, questions remain regarding SOS user profiles and shopping behaviors, their motivations to buy, and what fashion SOS companies they prefer.

Consumer satisfaction with e-service and product evaluation criteria

E-Service quality: E-service quality is the consumer’s perceived experience of performance related to service provided in an online setting [10]. The service provided by fashion SOS businesses could be everything from ease of website use, to delivery response time. If consumers are not satisfied with the initial e-service that they are provided with (e.g., profile quiz and ease of use of website or app), they may expect the end of their service (e.g., receiving the product and choosing what they want to keep) to be disappointing as well. This scenario may deter the consumer from purchasing products that are shipped a few days after their first initial touchpoint. Based on prior research, this thought sequence is similarly reflected with repeat purchase intentions [7,11,12,13]. It is therefore plausible that consumers’ perceived satisfaction with fashion SOS e-service quality may impact their desire to receive future subscription boxes.

Prior research regarding e-service quality reveals that consumers place importance on dimensions such as responsiveness, service reliability, competence, ease of use, and systems reliability [14]. Another study [15] focused on increasing website viewing rates and customer preservation, resulted in a conceptual model based of e-service quality elements. In the apparel industry context, researchers reviewed online retailer’s websites when looking at the construct of e-service quality [16]. They found that shoppers perceived website quality based on website appearance and visual elements, entertainment factors, informational fit-to-task, transaction capability, response time, and trust. Pertaining to the SOS business model, no prior research has examined the effect of e-service quality on satisfaction, which may consequently lead to repurchase intention.

Product quality evaluation criteria: Satisfaction with product quality is an important attribute to SOS businesses. If consumers are not satisfied with the items that they receive, and do not purchase anything, they are less likely to subscribe again [7]. This can be a challenge to fashion SOS businesses, because they thrive on anticipating continual consumer demand [8]. Chen et al. [8] describe, “the higher the churn rate, the more difficult it becomes for subscription e-commerce companies to cover their acquisitions costs and to scale their revenues.”

Product quality criteria has been widely investigated in the realm of clothing and fashion products. Consumers look at elements such as aesthetics, usefulness, performance/quality, and extrinsic criteria when purchasing products from a physical store [17]. Abraham-Murali L, et al. [18] found similar results, noting that consumers evaluate purchased apparel by physical appearance, physical performance, expressive, and extrinsic criteria. More recent evidence [19], explained the rental apparel evaluative criteria included fit, garment styling, social feedback, appropriateness, color and pattern, fabric, and physical comfort. Pertaining to SOS product quality, no research to date has addressed consumer satisfaction with the products or criteria they apply when making assessments.

Theoretical framework: Expectation-Confirmation Theory

The present research draws from Oliver R [7] ECT to understand consumers’ satisfaction with fashion products purchased through SOS. The key components of the ECT include expectation, confirmation, and satisfaction. ECT postulates that prior to an event, a consumer has expectations for the forthcoming experience. If that expectation is met in a positive manner (e.g. confirmation), the customer is satisfied [7,11,13]. When expectations are not met (e.g. disconfirmation), the consumer may logically be dissatisfied. Oliver R [7] offers that the consumer should reach the stage of repurchase intention if the expectation-confirmation-satisfaction sequence is fulfilled (Figure 1).

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