IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v54y2020ics0969698918302777.html
   My bibliography  Save this article

“Curated subscription commerce: A theoretical conceptualizationâ€

Author

Listed:
  • Bischof, Severin Friedrich
  • Boettger, Tim M.
  • Rudolph, Thomas

Abstract

Subscription commerce emerged as an up-and-coming phenomenon in retailing that enables shoppers to automatically receive recurring deliveries of consumer goods. One important dimension along which subscription services differ is the degree to which the content of each delivery is surprising. This paper focuses on two archetypes at opposite ends of this dimension, namely predefined and curated surprise subscriptions, and juxtaposes them to conceptualize surprise as a retail mechanism. It is hypothesized that curated surprise subscriptions carry an inherent risk to receive unappealing products, as consumers outsource the decision-making process to the subscription provider, which can influence consumers' choices and attitudes. Three studies explore the role of risk perception in consumers’ evaluation of consumer goods subscriptions. First, it was found that consumers prefer shorter delivery intervals for predefined subscriptions and longer delivery intervals for curated surprise subscriptions, in line with Prospect Theory. Second, empirical evidence for perceived risk as a mediating variable in this relation is provided. Finally, it is shown how retailers can manipulate associated risk through the introduction of a free-return option. The article is concluded by introducing a new typology of subscription services and discussing implications for managerial practice as well as avenues for future research.

Suggested Citation

  • Bischof, Severin Friedrich & Boettger, Tim M. & Rudolph, Thomas, 2020. "“Curated subscription commerce: A theoretical conceptualizationâ€," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    • Handle: RePEc:eee:joreco:v:54:y:2020:i:c:s0969698918302777
    DOI: 10.1016/j.jretconser.2019.04.019
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698918302777
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2019.04.019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    2. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    3. Peter J. Danaher, 2002. "Optimal Pricing of New Subscription Services: Analysis of a Market Experiment," Marketing Science, INFORMS, vol. 21(2), pages 119-138, February.
    4. Laura J. Kornish, 2001. "Pricing for a Durable-Goods Monopolist Under Rapid Sequential Innovation," Management Science, INFORMS, vol. 47(11), pages 1552-1561, November.
    5. Oster Sharon M. & Scott Morton Fiona M., 2005. "Behavioral Biases Meet the Market: The Case of Magazine Subscription Prices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-32, March.
    6. Ruth N. Bolton, 1998. "A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction," Marketing Science, INFORMS, vol. 17(1), pages 45-65.
    7. Preyas Desai & Devavrat Purohit, 1998. "Leasing and Selling: Optimal Marketing Strategies for a Durable Goods Firm," Management Science, INFORMS, vol. 44(11-Part-2), pages 19-34, November.
    8. Woo, Hongjoo & Ramkumar, Bharath, 2018. "Who seeks a surprise box? Predictors of consumers’ use of fashion and beauty subscription-based online services (SOS)," Journal of Retailing and Consumer Services, Elsevier, vol. 41(C), pages 121-130.
    9. Crowe, Ellen & Higgins, E. Tory, 1997. "Regulatory Focus and Strategic Inclinations: Promotion and Prevention in Decision-Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 69(2), pages 117-132, February.
    10. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    11. Lam, Long W. & Harrison-Walker, L. Jean, 2003. "Toward an objective-based typology of e-business models," Business Horizons, Elsevier, vol. 46(6), pages 17-26.
    12. Bulow, Jeremy I, 1982. "Durable-Goods Monopolists," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 314-332, April.
    13. Xinshu Zhao & John G. Lynch & Qimei Chen, 2010. "Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 37(2), pages 197-206, August.
    14. Mano, Haim & Oliver, Richard L, 1993. "Assessing the Dimensionality and Structure of the Consumption Experience: Evaluation, Feeling, and Satisfaction," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 20(3), pages 451-466, December.
    15. Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-149, April.
    16. Heath, Chip & Tversky, Amos, 1991. "Preference and Belief: Ambiguity and Competence in Choice under Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 4(1), pages 5-28, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Watanabe, Chihiro & Akhtar, Waleed & Tou, Yuji & Neittaanmäki, Pekka, 2021. "Amazon's New Supra-Omnichannel: Realizing Growing Seamless Switching for Apparel During COVID-19," Technology in Society, Elsevier, vol. 66(C).
    2. Andonova, Yana & Anaza, Nwamaka A. & Bennett, Delancy H.S., 2021. "Riding the subscription box wave: Understanding the landscape, challenges, and critical success factors of the subscription box industry," Business Horizons, Elsevier, vol. 64(5), pages 631-646.
    3. Toteva, Irina T. & Lutz, Richard J. & Shaw, Eric H., 2021. "The curious case of productivity orientation: The influence of advertising stimuli on affect and preference for subscription boxes," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    4. Bray, J. & De Silva Kanakaratne, M. & Dragouni, M. & Douglas, J., 2021. "Thinking inside the box: An empirical exploration of subscription retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    5. Sinha, Rajesh Kumar, 2021. "Subscription and casual customers’ differential sensitivity to meteorological characteristics," Journal of Retailing and Consumer Services, Elsevier, vol. 62(C).
    6. Tan, Wee-Kheng & Chen, Bo-Hsiang, 2021. "Enhancing subscription-based ecommerce services through gambled price discounts," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Korbinian Dress & Stefan Lessmann & Hans-Jorg von Mettenheim, 2017. "Residual Value Forecasting Using Asymmetric Cost Functions," Papers 1707.02736, arXiv.org.
    2. Mercè Roca & Robin Hogarth & A. Maule, 2006. "Ambiguity seeking as a result of the status quo bias," Journal of Risk and Uncertainty, Springer, vol. 32(3), pages 175-194, May.
    3. Gul, Faruk & Pesendorfer, Wolfgang, 2015. "Hurwicz expected utility and subjective sources," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 465-488.
    4. Fox, Craig R. & Weber, Martin, 2002. "Ambiguity Aversion, Comparative Ignorance, and Decision Context," Organizational Behavior and Human Decision Processes, Elsevier, vol. 88(1), pages 476-498, May.
    5. Aurélien Baillon & Zhenxing Huang & Asli Selim & Peter P. Wakker, 2018. "Measuring Ambiguity Attitudes for All (Natural) Events," Econometrica, Econometric Society, vol. 86(5), pages 1839-1858, September.
    6. Richard J. Arend, 2020. "Strategic decision-making under ambiguity: a new problem space and a proposed optimization approach," Business Research, Springer;German Academic Association for Business Research, vol. 13(3), pages 1231-1251, November.
    7. Greg Barron & Eldad Yechiam, 2009. "The coexistence of overestimation and underweighting of rare events and the contingent recency effect," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(6), pages 447-460, October.
    8. Divya Aggarwal & Pitabas Mohanty, 2022. "Influence of imprecise information on risk and ambiguity preferences: Experimental evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 1025-1038, June.
    9. Balbontin, Camila & Hensher, David A. & Collins, Andrew T., 2017. "Do familiarity and awareness influence voting intention: The case of road pricing reform?," Journal of choice modelling, Elsevier, vol. 25(C), pages 11-27.
    10. Craig R. Fox & Amos Tversky, 1998. "A Belief-Based Account of Decision Under Uncertainty," Management Science, INFORMS, vol. 44(7), pages 879-895, July.
    11. Laure Cabantous & Denis Hilton, 2006. "De l'aversion à l'ambiguïté aux attitudes face à l'ambiguïté. Les apports d'une perspective psychologique en économie," Revue économique, Presses de Sciences-Po, vol. 57(2), pages 259-280.
    12. Jean-Louis Arcand & Grégoire Rota Graziosi, 2005. "Tax Compliance and Rank Dependent Expected Utility," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 30(1), pages 57-69, June.
    13. Aurélien Baillon & Han Bleichrodt & Umut Keskin & Olivier l’Haridon & Chen Li, 2018. "The Effect of Learning on Ambiguity Attitudes," Management Science, INFORMS, vol. 64(5), pages 2181-2198, May.
    14. Zhang, Yingdan & Yang, Ruina & Yi, Zelong & Yao, Shiqing & Jing, Yiheng, 2023. "Behavior-Based pricing under asymmetric channel competition with strategic consumers," Omega, Elsevier, vol. 120(C).
    15. Monika Bolek & Rafal Wolski, 2019. "Rationality of more and less experienced groups of finance professionals. Example of Poland," Proceedings of International Academic Conferences 9912031, International Institute of Social and Economic Sciences.
    16. Adam T Biggs & Kyle A Pettijohn, 2021. "Prospect theory and its implications for adversarial decision-making," The Journal of Defense Modeling and Simulation, , vol. 18(2), pages 125-134, April.
    17. Kluger, Avraham N. & Stephan, Elena & Ganzach, Yoav & Hershkovitz, Meirav, 2004. "The effect of regulatory focus on the shape of probability-weighting function: Evidence from a cross-modality matching method," Organizational Behavior and Human Decision Processes, Elsevier, vol. 95(1), pages 20-39, September.
    18. Özalp Özer & Yanchong Zheng, 2016. "Markdown or Everyday Low Price? The Role of Behavioral Motives," Management Science, INFORMS, vol. 62(2), pages 326-346, February.
    19. Paul Dolan & Martin Jones, 2004. "Explaining Attitudes Towards Ambiguity: An Experimental Test Of The Comparative Ignorance Hypothesis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(3), pages 281-301, August.
    20. Carmela Di Mauro & Anna Maffioletti, 2004. "Attitudes to risk and attitudes to uncertainty: experimental evidence," Applied Economics, Taylor & Francis Journals, vol. 36(4), pages 357-372.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:54:y:2020:i:c:s0969698918302777. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.