Omnichannel technology failures: sources, recovery and perceived risk

Purpose Omnichannel technologies that lead consumers from the online-shop to a retailer's store are prone to various failures. This study investigates how consumers perceive different failure sources (system, personnel, random circumstances) and alternative recovery approaches. More importantly, it explains such effects based on consumers' perceived risk (probability and magnitude dimensions) as an alternative to merely attribution- and equity-based explanations. Design/methodology/approach We conducted a scenario-based online survey experiment with a 3 × 3 between-subjects design and a supplementary experiment. We analysed data using ANOVA and partial least squares. Findings Findings show that consumers' perceived risk is an important mediator in the relationship between service failures and recoveries and customer satisfaction. Personnel failures reduce customer satisfaction least (via lower risk probability). Furthermore, recovery types differ in their effectiveness (via risk magnitude). Hence, different failure sources and types of recoveries affect satisfaction via the two risk dimensions. Practical implications Retailers should invest in the prevention of system or random circumstances caused failures and should encourage their staff to confess their own failures instead of blaming technology. If failures happen, retailers should reduce consumers' risk perceptions regarding future failures and their consequences. Originality/value The study highlights the effects of specific service failures and recoveries in an omnichannel context. It demonstrates that the commonly used attribution and equity theories alone are not sufficient to explain the underlying psychological processes and need to be complemented by perceived risk.