Purchase channel and product characteristic effects on consumer risk perceptions

Retail channel issues represent a well-established and important domain within the marketing literature. In many situations, consumers can choose among retail channels for a given purchase occasion. This dissertation posits that a primary determinant of channel choice is a consumer's perception of the risk involved in purchasing through a particular channel. Risk pertains to feelings of “uncertainty,” “discomfort,” and/or “anxiety” (Dowling and Staelin 1994) that result because the actual outcome of a purchase decision can only be known in the future.; Both purchase channel factors and product characteristics affect consumer risk perceptions. Purchase channels differ across factors that can be broadly grouped as “information” or “logistics.” Information pertains to how retailers communicate with consumers about products, and logistics pertains to how retailers get products to buyers. Many paradigms have been developed to classify products based on their characteristics, but recent research has suggested that two paradigms—search/experience (Nelson 1970, 1974) and differentiation potential—are particularly relevant for assessing the “fit” of products to channels (Alba et al. 1997; Klein 1998; Peterson et al. 1997). The search/experience dimension relates to the extent to which consumers can evaluate products prior to purchase, while differentiation potential is the extent to which a product is capable of differing from other brands or models of the same product. This dissertation considers both of these product dimensions and four channel information factors—vividness, control, quality, and personalization.; Through a series of five studies, the roles of product characteristics and channel information factors in determining consumer risk perceptions are examined. The results reveal that risk perceptions differ across products and channels. In addition, consumers perceive channels to differ in terms of the vividness, quality, and personalization of product information and the control they have over this information. Each of these factors is shown to have a negative relationship with performance risk. The magnitudes of these relationships depend on the search/experience product dimension, but not on the differentiation potential dimension. Additional analyses examine the factor structure of risk, effects of consumer characteristics on risk perceptions, and the validity of a constant sum measure of risk. The managerial implications of this research focus on decisions regarding which channels retailers should establish, which products should be sold through which channels, and how information should be presented about various types of products.