Perceived risk and rise reduction strategies in mail-order versus retail store buying

Abstract

This study examines the differential impact of perceived risk upon two alternative channels of distribution, namely specialty store and mail-order buying, for different product categories. Given the critical role of perceived risk in limiting mail-order buying, different types of risk relievers and their potential for reducing perceived risk have also been analysed. This study confirms the general belief that mail-order buying is not only more risky than buying the same product in a specialty store but it also indicates that the level of perceived risk seems to be highly influenced by the value of the product. Although mail-order companies may reduce this competitive disadvantage by using the appropriate risk relievers the results clearly indicate that risk relievers differ considerably in effectiveness. 'Money-back guarantee' and 'offering products with positive ratings of consumer organizations' are among the better risk relievers.