Understanding Consumer Choices and Preferences in Transaction-Based e-Services

Abstract

The rapid increase in transaction-based e-services creates a challenge for firms: What combination of features should they offer to satisfy consumers while realistically considering operational and financial constraints? This article explores the above question by highlighting similarities and differences in consumer preferences between different segments for a transaction-based e-service. The study employs a Web-based discrete choice experiment, in which 1,430 consumers are offered e-service options, differing from each other in terms of non-web-based and online-only features, price per transaction, and marketing promotions. The results demonstrate that overall, consumer preferences for features of transaction-based e-services differ between offline and online consumers. Furthermore, with increase in consumer usage frequency, interesting trends regarding the relative importance for features are observed. Similarities also exist in consumer preferences between various usage-frequency-based consumer segments. The authors believe that these results have both managerial and research implications for design and operations strategy formulation for transaction-based e-services.