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Theoretical background
In the following chapter the literature review that the thesis is based on is presented. The chapter begins to explain the main concepts in the theory of customer experience that are included in the thesis. The concepts are: customer journey, touchpoints, customer engagement and customer experience quality. These concepts are reviewed from a technological perspective of the customer journey. The chapter is ending with a research gap related to the concepts and a theoretical synthesis that explains visually how the theory and concepts are connected.
Customer experience management
The world is becoming increasingly competitive and expectations for satisfactory and complete experiences are increasing for customers. It is important that companies today focus on the entire customer experience and not just product quality, price or service quality (Tom Dieck & Han., 2021). In an article conducted by Klink, Shang and Athaide (2020), Abbott (1995) claims that people intend to care more about satisfactory experiences rather than products. Furthermore, in the same article, Pine and Gilmore (1998) claims that the focus of customer experience is about finding a personal way to engage individuals. Schmitt (1999) instead identifies five different types of customer experience readings that are essential: Emotional, cognitive, sensory, behavioural and relational values that replace functional values. Schmitt (1999) further mentions that customer experience management includes a five-step focus. These five steps consist of (1) analysis of the customers’ world of experience, (2) building the experience platform, (3) designing the brand experience, (4) structuring the customer experience and (5) participating in continuous innovation (Schmitt., 1999). Pine and Gilmore (1998) demonstrate in their research article that customer experience management is important to gain an advantage in competition and to create customer loyalty (Pine & Gilmore., 1998; Klink et al., 2020). Since then, research has grown in this subject and the structure of customer experience management has been developed and advanced (Klink et al., 2020). According to previous research, customer experience is a wide theory including for instance service quality, customer commitment and customer centering (Klink et al., 2020). Lemon and Verhoef (2016) believe that the experience for the customer is like a journey together with a company and / or brand during the buying process, as a whole in the experience for the customer together with several points of contact together with the company and brand (Lemon & Verhoef., 2016).
According to Mansoor, Awan and Alobidyeen (2020), customer experience has become popular to study over the past 20 years. The authors present as Klink et al. (2020) that positive experiences for the customer can lead to long-term competitive advantage for companies, and also generate satisfied and loyal customers. Mansoor et al. (2020) also mention that the positive customer experiences result in positive word-of-mouth and create better retention levels. Positive as well as negative experiences for the customer reflects the customers’ satisfaction (Meyer & Schwager., 2007; Mansoor et al., 2020). The research article also claims that the customer’s decision-making process before purchasing a service or a product is supported by these knowledge and experiences (Wilson, Zeithaml, Bitner & Gremler., 2012; Mansoor et al., 2020). Recamadas (2018) claims in its research article that the interactions between companies and customers are incredibly important for experiences that customers encounter. These experiences have a major impact on consumers’ spiritual, emotional and reactionary levels and examine experiences with their expectations in comparison with organizational offerings (Gentile, Spiller & Noci., 2007; LaSalle & Britton., 2003; Mansoor, Awan & Syed., 2020).
Klink et al. (2020) mention that the experience for the customer is studied as the new area exposed to competition for companies. Furthermore, Manning and Parrish (2017) mention that companies that have a strong and dominant customer experience grow on average five times faster than businesses with inferior experience for customers. More than 80 percent of customers turn out to pay more to have a better customer experience. Klink et al. (2020) explains in their research article that the responsibility for an improved customer experience lies largely with marketers. This is for the reason that marketers take care of the majority of the budgets within companies in order to improve customer experience management. In the research article, the authors suggest that customer experience management is widely important in the marketing methods for the future (Homburg, Jozić & Kuehnl., 2017; Klink et al. 2020).
In previous research, Edelman and Singer (2015) mention that the rapid growth of touchpoints and reduced control over the digital shopping experience contribute to a more complicated relationship where companies produce special and unique experiences for the customer. Customer experiences as a company strive to manage and control to create good results and for it to be successful. While De keyser, Lemon, Klaus and Keiningham (2015) describe the customer experience as « consisting of the cognitive, emotional, physical, sensory, spiritual and social elements that mark the customer’s direct or indirect interaction with other market players » (De keyser et al., 2015, p 71).
Technologies impact on customer journey
Customer experience and customer journey belong to a field that scholars have researched primarily during the recent years. According to Lemon and Verhoef (2016) the field of customer experience management is a relatively new “greenfield” for future research, although human experience has been studied for at least a hundred years. The importance of creating a satisfying customer experience during later years have become a crucial factor for companies. To be able to identify critical gaps in customer experience the article of Lemon and Verhoef (2016) brings together existing research about customer experience to understand its origins. Based on the current era of increasingly complex customer behaviours, the authors also develop a stronger knowledge of the customer journey and customer experience (Lemon & Verhoef., 2016).
In a research conducted by Grewal and Roggeveen (2020) the authors claim that to survive in this technology intensive environment, it is important for retailers and manufacturers to understand the role of customer experiences at each stage of the customer journey. Further they define customer journey management (CJM) as “understanding and managing customers’ experiences throughout their shopping journey” (Grewal & Roggeveen., 2020, p. 1). The article also notes that cognitive, emotional and behavioural responses are involved in the customer journey. The research conducted by Verhoef, Lemon, Parasuraman, Roggeveen, Tsiros and Schlesinger (2009) also define customer experience as a multidimensional construct including the three dimensions and moreover sensorial and social responses.
According to Hoyer et al. (2020) the customer shopping journey includes “the complete stages a customer goes through from pre-transaction to transaction to post-transaction” (p. 58). Research also indicates that technological development affects the customer journey and customer experience in particular ways (Flavián, Ibáñez-Sánchez & Orús., 2019) and to understand how technology impacts the customer journey is of critical importance (Grewal & Roggeveen., 2020). According to Hoyer et al. (2020) existing touchpoints in the customer journey will be transformed and replaced by new ones. The different stages that customers go through in the customer journey will be influenced by new technologies, which will affect how consumers search for products and brands, evaluate alternatives, make choices, and consume products. The article also claims that the process of customer relationship management will be improved by new technologies (Hoyer et al., 2020). Grewal and Roggeveen (2020) establish that to have an integrated and systematic customer journey management system in place is of paramount importance for service providers and retailers. To ensure that manufacturers optimize placement of their products and services and their communications in store and online, it is just as important that they understand customers’ journeys and experience (Grewal & Roggeveen., 2020).
In the article of Flavián et al. (2019) the authors discuss the impact that different types of technologies such as virtual, augmented and mixed reality can have on the customer experience. Neuhofer, Buhalis and Ladkin (2014) proposed the “experience hierarchy” containing four different types of experience related to levels of technologies included. In level one (conventional experiences) include experiences where technology is limited or non-existent. In level two (technology-assisted experiences) technologies do not let the customers interact or co-create their experience. Instead it makes it possible to assist customers and plays a facilitating role. Level three (technology-enhances experiences) makes it possible for customers to shape and be active in creating their experience. The fourth level (technology-empowered experiences) require that technologies need to be used to make it possible for the experience to take place. Technologies at fourth level creates high levels of involvement for the customers, which leads to added value and opportunity for co-creation (Neuhofer et al., 2014).
According to De Keyser et al. (2020) the TCQ nomenclature including touchpoints, context and qualities are introduced as standardized key components to consider in the customer journey to be able to move the customer experience field forward. The article´s perspective lies in viewing customer experience from an integrated view of the three components rather than looking at an individual aspect of customer experience (De Keyser et al., 2020). Research about self-service systems has earlier been discussed by scholars. Hwang and Kim (2007) discussed and tested the effects of the perceived web quality with service contents on e-trust, mediated by the website’s user´s affective variables such as enjoyment and anxiety (Hwang & Kim., 2007).
During later research, AI has been discussed several times regarding customer experience and customer journey. Hoyer et al. (2020) has conducted research about using AI technologies in the customer journey. Further the authors examined a study of technologies powered by AI and how these technologies transform the customer experience and how they impact each broad stage in the customer journey (ibid). The article furthermore creates a conceptualization of managing new AI technologies to create experiential value related to cognitive, sensory/emotional and social dimensions of customer experience. AI has also been studied with connection to other perspectives (Hoyer et al., 2020). Hollebeek, Sprott and Brady (2021) conducted a research about the connection between customer engagement and AI-based service interactions.
Nowadays AR is increasing regarding overall improving the customer experience in the retail industry. IKEA is one retailer using AR technology to improve the customer experience (IKEA, 2021). In an article examined by Romano, Sands and Pallant (2020) a research was conducted to determine if augmented reality impacts the customer experience and customer journey in a positive or negative way. The results from the study proved that consumers’ product consideration set pre-purchase could be broadened with the use of AR, while the choice set gets narrowed. The study also showed that AR can reduce brand value and make it possible for emerging brands to connect with customers (ibid). Moreover, the study suggests that AR can drive hedonic value and facilitate product curation during the point of purchase. The research further notes that AR at the post-purchase stage can strengthen cognitive dissonance and influence consumer choice confidence (Romano et al., 2020).
Touchpoints and interactions in customer journey
The field of touchpoints has been widely discussed in previous research. By doing research on different customer journeys and their touchpoints, the customer journey can be improved and the interaction between company and consumer can be strengthened. Stein and Ramaseshan (2016) claims that the customer experience includes seven touchpoints that consist of different combinations depending on channels. Stein and Ramaseshan (2016) further highlights touchpoints such as technological, processes, atmospheric, communicative and production elements. Moreover, the authors mention touchpoints within customer-employee interactions. The content of the study offers understanding of the customer experience that supports the company to make personal touchpoints available. Stein and Ramaseshan (2016) claims that social media and mobile devices have also been developed as an important touchpoint for increasing interaction between company and the customer. Brewers and Holmes (2020) state in their article that customer service- levels have grown along with the need to deal with a larger number of channels under the company’s control.
Flavián, Ibáñez-Sánchez and Orús (2019) have also researched in the field regarding touchpoints and came up with the conclusion that touchpoints have great impact on the customer experience. In the article, touchpoints are presented in the different parts of the customer’s decision-making, such as before, during and after the purchase. Similar to Flavián et al. (2019) the article by De keyser et al. (2020) also contains research on touchpoints that affect the customer before, during and after purchase.
The first step in the buying process within the customer journey is before the purchase decision (ibid). Steps that include a customer’s interaction with a special touchpoint before the purchase is completed, including needs recognition and information retrieval. The purchase step in the customer journey is when the customer interacts with the company through touchpoints during the purchase decision (ibid). These are interactions with connection to ordering, delivery, collection and payment within the customer journey. After the purchase is completed, touchpoints are those that are associated with the use of a product or service, also called consumption- and return moment (De keyser et al., 2020).
In the research article by Edvardsson and Enquist (2011) the company’s interaction with customers through the buying process is described, similar to the article by Flavián et al. (2019), but within IKEA. The article emphasizes that IKEA creates interaction with the customer by creating personal solutions even before the purchase. The company does this through showrooms that make customers experience the rooms for « real » before the time of purchase. Edvardsson and Enquist (2011) states that functionality is combined with emotional commitment and that it forms an experience for the customer that is beneficial for IKEA. The showroom is a solution that increases the customer’s imagination and that the customer’s interaction with the company grows (Edvardsson & Enquist., 2011).
De keyser et al. (2020) focus on describing TCQ. It is further described that the customer journey is divided into different touchpoints, how the context is created and the qualities provided. De keyser et al. (2020) expounds what motivates or demotivates consumers during their customer journey and the connection to the company. The research shows that touchpoints in nature can be human or physical, which is the most common for companies to use. There are also digital touchpoints and a mixture of these three, which are becoming more and more popular in the online customer experience. De keyser et al. (2020) also mentions how the retailer offers customers an experience in the cognitive, emotional, behavioural, sensory and social responsibilities during the buying process. In the customer journey, the experience for the customer is also improved if the company creates added value by using technology and connecting different virtual-physical touchpoints (De keyser et al., 2020).
In the article perceived by Pöyry et al. (2020), the authors believe that new technology is much appreciated in interaction with customers. Pöyry et al. (2020) mention that it is important to know which touchpoints customers prefer to use. Further Pöyry et al. (2020) describes what attracts the customer to get involved in order for the company to be able to interact with corporate customers in the best possible way. Hollebeek et al. (2021) describes that interactions that are automated between customers and companies create a greater commitment in the aspect of the customer. It is also discussed that in the future it will mostly be the technology that connects the company and the customers, instead of the use of human touchpoints (Hollebeek et al., 2021). AI automation is a new chapter in the development and part of industry 4.0, which is characterized by the merging of technologies that strengthen the lines between the digital, biological and physical areas (ibid). Industry 4.0 has a major technical impact that has a huge impact on the interaction between customer and company. In the article, the authors mention that in the next few years, customer engagement will be mostly through AI. Hollebeek et al. (2021) express that a demand for the covid-19 environment can remain even after the pandemic is over because a replacement of human interactions is being exchanged by technology.
Lemon and Verhoef (2016) claim, in line with Flavián et al. (2019) and De keyser et al. (2020), that the customer journey is important and crucial for companies. Therefore, it is essential for companies to acquire many touchpoints to be able to integrate with customers in many different ways. In today’s society, companies and customers interact with each other through touchpoints in several channels as well as in the media. The study also shows that the experience for the customer is more social than before (Lemon & Verhoef., 2016). Moreover, Lemon and Verhoef (2016) have investigated how customers’ perceptions and behaviours are affected by self-service technologies. Another perspective of touchpoints has been conducted according to research of multichannel retailing. Lemon and Verhoef (2016) state that previous research has studied how interactions/touchpoints between channels affect experience measures. It has also been observed that it is important that multichannel-retailers create a seamless experience across channels, since stronger sales growth tends to be achieved among retailers with better integration between channels (ibid). On the other side there is evidence in some dissynergies in previous research that shows that a new online channel is less likely to be used by a satisfied offline user. Lemon and Verhoef (2016) further indicates that integration between online-offline channels can create opportunities such as increasing perceived quality of the online channel and reducing perceived risk of the online store. This in turn led to reduced cannibalization in the offline channel and positive choice effects of the online channel (Lemon & Verhoef., 2016).
De keyser et al. (2020) also mentioned in the research that has been studied, customers experience touchpoints differently depending on the person. However, it also depends on special times, depending on the context in which the interaction between customer and company takes place. Touchpoints can vary when it comes to nature, the steps in the customer journey and control. The authors claim that touchpoints can be firm-controlled, which corresponds to touchpoints that are only monitored by the company, for example the environment in the store, the company advertising, the employees and the company’s website. There are also touchpoints that customers, influencers or other companies control that the company itself cannot affect, also called non-firm-controlled. These types of touchpoints cause the company to lose control increasingly (De keyser et al., 2020).
Table of contents :
1. Introduction
1.1 Background
1.2 Problem discussion
1.2.1 Theoretical problematization
1.2.2 Managerial problematization
1.2.3 The research gap
1.3 Purpose
1.4 Research questions
1.5 Target group
2 Theoretical background
2.1 Customer experience management
2.2 Technologies impact on customer journey
2.3 Touchpoints and interactions in customer journey
2.4 Customer engagement as interaction
2.5 Technologies impact on customer experience quality (EXQ)
2.6 Summary
2.7 Theoretical synthesis
3 Methodology
3.1 Research approach
3.2 Research strategy
3.3 Research design
3.3.1 Multiple case study design
3.4 Type of data
3.5 Research method
3.5.1 Semi-structured interviews
3.5.2 Collection of data
3.6 Operationalization
3.7 Selection of cases
3.7.1 Purposive sampling
3.7.2 Company criteria
3.7.3 Table of cases
3.8 Data analysis
3.8.1 Thematic analysis
3.9 Quality of research
3.9.1 Reliability in qualitative research
3.9.2 Validity in qualitative research
3.10 Ethical considerations
3.11 Sustainable considerations
4 Empirical findings
4.1 Cases
4.1.1 Ellos Group
4.1.2 Möbelmästarna
4.1.3 IKEA
4.1.4 Mio
4.1.5 Company A
4.2 Customer experience management
4.3 Technologies impact on customer journey
4.4 Touchpoints and interactions in customer journey
4.5 Customer engagement as interaction
4.6 Technologies impact on customer experience quality
5 Analysis
5.1 Customer experience management
5.2 Technologies impact on customer journey
5.3 Touchpoints and interactions in customer journey
5.4 Customer engagement in customer journey
5.5 Technologies impact on customer experience quality
6 Conclusion
6.1 Answering the research questions
6.1.1 How can retailers manage technological touchpoints in customer journeys in the furniture sector?
6.1.2 How can retailers use technological touchpoints to change the quality & customer engagement in customer journeys?
6.2 Theoretical implications
6.3 Managerial implications
6.4 Social and ethical implications
6.5 Limitations
6.6 Suggestions for future research
References
Appendices
