How close are your customers'? A quantitative study on consumers psychological distance and its implications for retailers online strategy

University essay from Handelshögskolan i Stockholm/Institutionen för marknadsföring och strategi

Abstract: E-commerce is constantly expanding and evolving, and the retail landscape is currently facing major challenges. Younger generations that have grown up in a digital era are more comfortable navigating the online environment, and they are increasingly constituting a more significant part of the market. This puts pressure on both multichannel and pure e-commerce retailers to craft online strategies that are based on an accurate understanding of their customer's characteristics. Past research suggests that psychological distance can strongly influence consumers' attitudes and behaviors in the online retail setting. Through a quantitative experimental study, this study suggests that retailers' channel strategy, consumers' level of perceived internet confidence, and internet behaviors all affect their psychological distance. In turn, psychological distance positively affects customer attitudes, such as purchase intention. Thus, the present study shows that it is essential for retailers to cause lower psychological distance online to capture the positive benefits it generates.

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