Social Media Enabled Service Failure Identification and Recovery: In the UK & Irish Retail Sector.

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1 Social Media Enabled Service Failure Identification and Recovery: In the UK & Irish Retail Sector. Introduction Web 2.0 enabled social media has evolved into a phenomenon elevating online communications to a new level (Constantinides & Fountain, 2008). A cross section of firms use social media marketing activities to acquire customer feedback, create new products/offers, engage in online dialogue with followers and reinforce customer loyalty (Beuker, 2009; Gallaugher & Ransbotham, 2010). Supporters hypothesise that its interactive nature supports relationships between organisations and consumers (Nair, 2009) whereas others suggest that firms must take full advantage of the medium if they are to merely survive (Kaplan & Haenlein, 2010). Through social media consumers are exerting a progressively profound influence on business, with various industries transforming the way they communicate with customers. The retail industry is a prime example of this, with over 81% of people using online retail consumer reviews in their purchase decisions (Leggatt, 2009). Thus, retailers are increasingly employing the technology available today, including social media, to sell their products/services over the Internet, respond to customer questions, offer additional products/services and evaluate customers satisfaction/dissatisfaction, with their offerings/service (Kasim and Ismail, 2009). Social media allows firms to engage in timely and direct consumer contact at relatively low cost and higher levels of efficiency than can be achieved with more traditional tools (Kotler, Keller, Brady, Goodman & Hansen, 2012, p150). Thus, social media has become a key element of the retailer s marketing communication strategy, presenting opportunities for research on how social media affects the retail industry (Ganesan, 2012). Although offline service failure and recovery issues have received considerable attention in the literature, these topics have received only limited attention in the context of online retailing (Holloway & Beatty, 2003) and no known empirically tested research exists in the context of social media. Social media enabled service failure identification and recovery The study of customer dissatisfaction and complaining behaviour gained momentum at the end of the last century (Andraessen, 2000) with a significant amount of empirical research in the area. However, the user generated content capabilities of social media have empowered the customer, resulting in a shift of power from the business to customer (O Brien, 2011). Pinto & Mansfield (2011) reveal social media as a new complaint channel that must be considered by marketers. Mangold & Smith (2012, p150) have a similar view, stating that consumers are able to influence literally thousands of purchase decisions with a few sentences online. Thus, it is vital that firms manage and have strategies for the rising threat of online public complaining, via social media. (Tripp & Gregoire, 2011). Complaints are likely to occur as a result of service failure, thus it is essential that firms have service recovery strategies to resolve the issue. Service recovery refers to the actions by a service firm to restore a customer to a state of satisfaction after service failure and complaint (Boshoff, 2012). This proposed pioneering study goes beyond traditional retailing and complaints management, into the unpredictable sphere of social media enabled service failure identification and recovery (SMESFIR) and will develop a theoretical model to investigate the antecedents of this construct. By establishing the theoretical and managerial relevance of SMESFIR, this study will not only make a notable contribution to the literature, but it will also establish a basis for valuable future academic research. Managerially, the findings of this research will be of particular relevance to marketing practitioners, in the retail and service sector who seek to constructively manage the operational, financial and public relational effects of the real and present issue of online complaining by disgruntled customers, via social media.

2 Research Objectives The aim of this research is to investigate the role of social media as part of service failure identification and recovery systems, in UK and Irish retail firms. The research objectives are fourfold: Research Objective 1: To uncover the extent, nature and type of social media usage as part of service failure identification and service failure recovery systems, by UK and Irish retail firms. Research Objective 2: To identify the primary motivating factors, as well as subsequent drivers and enablers, with regard to social media usage as part of a service failure identification and service failure recovery system, by UK and Irish retail firms. Research Objective 3: To determine barriers and de-motivating factors for social media usage, as part of a service failure identification and service failure recovery system, by UK and Irish retail firms. Research Objective 4: To propose and empirically test a framework for social media enabled service failure identification and service failure recovery. Methodology The research approach of this study is divided into three phases, combining both deductive and inductive approaches. Phase one relates to objective one and involves gaining an understanding of the nature, type and extent of social media usage as part of service failure identification and recovery. Thus an inductive approach is deemed appropriate as theory follows data, in that the researcher will begin the research process by attempting to advance or build new theory. In-depth interviews, with marketing managers with responsibility for social media, will be used to explore the phenomenon, identify themes and patterns and create a conceptual framework. These in-depth interviews will aid in the exploration of insights directly from these decision makers (Knapik, 2006). In-depth interviews with marketing managers of retailers with no social media recovery activity will also be undertaken as a form of exploratory research to aid in the development of the survey (phase three). It is important to also include firms who disregard social media enabled service failure identification and recovery, initially in order to fully investigate the demotivating factors and barriers of usage (objective three) as well as the motivating factors and subsequent drivers and enablers of usage (objective two). Secondly, due to the exceptionally under-researched nature of social media as part of service failure identification and service failure system thus aiding the survey design. In-depth interviews are a convenient, established method of gaining deeper understanding in social research (Bauer & Gaskell, 2000; Fontana & Frey, 1994). Further, this method has been previously employed in research in the area of service recovery (Holloway & Beatty, 2003; Bowen & Johnston, 1998), as well as social media research (Kelly, Gayle & Drennan, 2010; Briones, et al., 2011; Mitic & Kapoulas, 2012). Phase three of the research plan (objective four) will involve testing the linkages between the antecedents, as well as enablers and barriers of social media enabled service failure identification and recovery. This deductive approach will involve the administration and analysis of surveys to explain the causal relationship between the various variables. Following the literature review and analysis of the data of phases one and two of the research, a model of the relationship between antecedents, drivers and barriers of social media enabled service failure identification and recovery, will be developed and tested using structural equation modelling (SEM). SEM provides researchers with a comprehensive means for assessing and modifying theoretical models (Anderson & Gerbing, 1982). The primary reason for adopting SEM is the ability to frame and answer increasingly complex questions about data (Kelloway, 1998) Further, SEM allows for the

3 consideration of simultaneous equations with many dependent variables (Bollen & Long, 1993; Shook, Ketchen, Hult & Kacmar, 2004), as is the case in this research study. Impact A limited amount of academic literature exists on the influence of social media on marketing practice. Most studies include descriptive narratives of social media, its definition, characteristics and advice/strategies for firms to take advantage of social media s opportunities and overcoming threats (Edelman, 2010; Hanna, Rohm & Crittenden, 2011; Kaplan & Haenlein, 2010; Kietzmann, Harmkens & McCarthy, 2011). As Kelley & Davis (1994) affirm, a dearth of empirical research confines any theoretical discussion to anecdotal reports (p52). In order to address this research gap, this study positions itself at the intersections of social media, service failure identification and recovery strategy and customer dissatisfaction/complaining behaviour. The potential impact of this research is further demonstrated by the numerous calls for research on this specific topic. Alvarez et al (2011) call for research into the implications of information and communication technologies (ICTs) on complaints management of retailers. While a 2012 study of Fortune 100 firms concluded that large corporations do not approach negative comments on social media as public relations opportunities, but rather censor, or ignore, critical feedback (Dekay, 2012). However, the same study uncovered that the retail sector developed a reverse strategy. Resulting in a call for research to discover what factors encourage retail firms to engage in conversation with dissatisfied and irritable customers? (Dekay, 2012, p296). Further, the current Editor-in-Chief of Journal of Retailing, Shankar Ganesan, declared that there are several opportunities for research on how social media affects various aspects of retailing, including how it is used as part of a service failure identification and response system (Ganesan, 2012, p189 ). This research proposes to answer that call directly and thus significantly contribute to the body of knowledge and our understanding of this important issue.

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