Balancing Breadth and Depth in Omnichannel Retailing: Understanding Customer Interaction Complexity and Its Impact on Customer Experience

The omnichannel retail environment has allowed customers to interact with a retailer through myriad combinations of channels and touchpoints. Customer interaction has, therefore, become increasingly complex as customers possess the freedom to design their own customer journey across purchase stages. Many have advocated the role of customer interaction in customer experience creation (e.g., Prahalad and Ramaswamy, 2004; Gentile et al., 2007; Echeverri and Skålén, 2011). However, the optimum levels of customer interaction that could maximise customer experience remain unclear. Previous work has supported the notion that a high variety of channels used could lead to increased customer engagement (e.g., Kumar and Venkatesan, 2005; Sopadjieva et al., 2017), but interacting with a single channel (e.g., offline-only, call centre prone) resulted in higher loyalty (De Keyser et al., 2015). Achieving the right balance of customer interaction is, therefore, critical. In doing so, this present study develops a multi-dimensional concept called customer interaction complexity comprises customer interaction breadth (i.e., the number of retail channels used by customers to interact with a retailer) and customer interaction depth (i.e., the frequency and a range of activities performed by customers via each of those retail channels). Using a cross-sectional customer survey (N = 485) and an experimental study (N = 301), this thesis investigates how customer interaction breadth and customer interaction depth shape the overall customer experience. The results suggest that customer interaction breadth has a U-shaped effect on customer experience, while the relationship between customer interaction depth and customer experience is taking an inverted U-shaped. Channel integration is a significant moderator that flips the effect of customer interaction breadth on customer experience. The effect of customer interaction depth on customer experience differs between offline and online channels: it remains an inverted-U shaped in the offline channel but linear and positive in the online channel. These effects can be further explained by customer effort and customer enjoyment as significant mediators at some levels of depth (low/moderate/high). Thus, these findings provide managers with guidance to create effective channel design leading to a superior customer experience and enrich the omnichannel literature.