Online Mass Customization and the Customer Experience

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Online Mass Customization and the Customer
Experience

• Arnold Kamis, Bentley College
• Marios Koufaris, Baruch College
• Tziporah Stern, Baruch College
• NJIT - November 22, 2004

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Mass Customization

• The ability to manufacture individually
  customized products and services on a mass
  production scale without a significant cost
  increase.
• Online examples
• NikeID
• Reflect.com
• Dell

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Online interfaces

• Alternative based
• Select from all possible customized product
  options
• Attribute based
• Select from all customizable product attributes
  to customize product
• Question based
• Answer relevant questions and have product
  customized for you

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Research questions

• What is the best interface?
• Simple vs. Powerful
• How much variety to offer?
• Is more choice always good?
• Who are the customers/users?
• Are all users having the same experience?

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Theoretical background

• Behavioral decision-making
• Discovered Preferences (Payne et al. 1988 Coupey
  1994 Fennema et al. 1995)
• Rational model Optimal choice exists
• Less realistic in customer decision-making
• Constructed Preferences (Payne et al. 1992
  Rosenshein 2000)
• No objective optimal choice
• Preferences dynamically constructed
• What is best decision support tool for
  self-customization?

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Theoretical background

• Task-technology fit model (Goodhue, 1995)
• Appropriate technology for specific user tasks
  increases performance and satisfaction
• Also important are user characteristics
• What is appropriate technology (interface) for
  online mass customization task?

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Study variables

• Measure success of system through customer
  experience
• Perceived ease of use
• Perceived usefulness
• Perceived control
• Enjoyment
• Effect of the interface alternative vs.
  attribute
• Effect of variety Number of possible product
  versions
• User characteristics Computer anxiety and
  computer playfulness

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The Interface

• Alternative-based
• Customers must deconstruct product into
  attributes and values
• May inflate perceived variety (3 attributes x 5
  values 125 alternatives)
• Not very interactive, just pick one from the list
• Attribute-based
• Product already deconstructed
• Actual variety obvious (3 attributes x 5 values
  15 choices)
• Interactive, experimental, game-like
• Hypothesis Overall, online customers will
  experience higher (perceived control, perceived
  usefulness, enjoyment) with an attribute-based MC
  interface than with an alternative-based one

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Variety Is more choice always better?
Source Desmeules, 2002

• Hypothesis
• Overall, enjoyment of online MC customers will
  follow an inverted U-shaped curve as variety
  increases.

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Variety and Interface

• Attribute-based interface reduces task complexity
  and cognitive effort
• Hypotheses
• Enjoyment will start decreasing at a higher
  variety for users who use the attribute-based MC
  interface than for those who use the
  alternative-based one.
• (Perceived ease of use, perceived control) will
  decrease in the alternative-based interface but
  will remain constant in the attribute-based
  interface as variety increases.

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The User

• Computer anxiety and computer playfulness will
  moderate the effect of interface on customer
  experience
• Hypotheses
• Overall, the difference in (perceived control,
  perceived usefulness, perceived ease of use,
  enjoyment) between using the attribute-based and
  using the alternative-based interfaces will be
  larger for users with low computer anxiety than
  for those with high computer anxiety.
• Overall, the difference in (perceived control,
  perceived usefulness, perceived ease of use,
  enjoyment) between using the attribute-based and
  using the alternative-based interfaces will be
  larger for users with high computer playfulness
  than for those with low computer playfulness.

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Methodology

• 2x2x3 factorial design
• Interface Alternative Attribute
• Product Watch Backpack
• Variety 8 54 150 possible product versions
• Web pages created by researchers from NikeID.com
  and Factory121.com with no brand identifiers

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Methodology

• Baseline experience
• Subjects used all three interfaces (including a
  question-based one) at 54-scale to customize a
  candle
• Then randomly assigned to one of 12 conditions
• Told that they may win customized watch or
  backpack (incentive)
• At the end, filled out survey on their experience
  and themselves

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Data Analysis

• 329 subjects recruited online through Zoomerangs
  MarketTools
• Nationally representative sample
• Ran CFA with AMOS 4.0 to test validity and
  reliability of survey instrument
• Ran ANCOVAs to test hypotheses
• Covariates Product Involvement and Web Skills

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Results
Mean differences are significant at
plt0.001 Hypotheses supported Overall,
attribute-based interface provides a better
customer experience than alternative-based
interface.
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Results
Main effect of variety significant at
plt0.01 Hypothesis supported Enjoyment follows
inverted U-shaped curve as variety
increases Interaction effect of interface and
variety not significant
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Results
Interaction effect of interface and variety
significant at plt0.01 Hypothesis supported
Perceived control decreases as variety increases
in alternative-based interface but remains
constant in attribute-based interface
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Results
Interaction effect of interface and variety
significant at plt0.05 Hypothesis supported
Perceived ease of use decreases as variety
increases in alternative-based interface but
remains constant in attribute-based interface
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Results
Categorized computer anxiety into low-medium-high
and excluded medium Interaction effect of
interface and computer anxiety significant at at
least plt0.05 Hypotheses partially supported
Computer anxiety moderates effect of interface on
(a) enjoyment and (b) perceived usefulness (but
not perceived control or perceived ease of use)
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Results
Categorized computer playfulness into
low-medium-high and excluded medium Interaction
effect of interface and computer playfulness
significant at plt0.05 for p. control and
significant only at variety150 for p. ease of
use Hypotheses partially supported Computer
playfulness moderates effect of interface on (a)
perceived control and (b) perceived ease of use
at high variety levels (but not perceived
usefulness or enjoyment)
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Contributions

• Theory/Research
• Attribute-based decision-making tool best for
  constructed preferences
• Appropriateness of attribute-based tool increases
  with task complexity
• Verified core ideas of TTF in context of online
  mass customization, including often ignored user
  characteristics
• Reduction in cognitive effort in online user
  tasks may outweigh reduction in physical effort
• Computer anxiety affects perceptions on outcome
  while computer playfulness affects perceptions on
  process

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Contributions

• Practice/Industry
• Increase in variety of products without
  appropriate tools to make decisions can have
  negative effect
• Not all customers are the same More powerful
  interface is often also more complex,
  overwhelming some customers
• Since computer anxiety affects perceptions
  regarding outcome, always provide ways to
  backtrack or undo actions

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Future work

• Part of a larger study
• Look at question-based interface
• Impact on behavioral intention
• Other user characteristics personal
  innovativeness in IT
• Suggestions for further research
• Study other products, especially experiential
  ones with non-visual attributes
• Examine variety at a more detailed level

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• Questions?
• Comments?
• Marios Koufaris
• Department of Statistics and Computer Information
  Systems
• Zicklin School of Business
• Baruch College, CUNY
• marios_koufaris_at_baruch.cuny.edu