Abstract

Keywords

۱٫ Introduction

۲٫ Theoretical framework

۳٫ Methodology

۴٫ Results

۵٫ Discussion

APPENDIX A. MEASURES

References

Abstract

COVID-19 primarily spreads through close contact between humans and has affected retailing industries extremely hard. To manage the situation retailers have turned to service innovation to change their operations to make consumers feel safe while shopping. This research focuses on the role of service innovativeness in retailing firms during the COVID-19 pandemic through an empirical study of almost 6000 consumers of 28 retailing firms. The results suggested that retailers with high service innovativeness performed COVID-19 imposed innovations better to improve their relative attractiveness. For retailers with physical stores, changes to the servicescape and the offering were found to be the key antecedents of service innovativeness. The findings on COVID-19 imposed service innovations demonstrate the importance of service innovativeness in successfully changing retailing services to adjust to the restrictions from governments and safety needs of customers.

۱٫ Introduction

Retailing is one of the industries most affected by the COVID-19 pandemic (Wang et al., 2020; Beckers et al., 2021). At various times retail customers were not allowed to go to physical stores, not allowed to shop with their spouse or children, required to wear face masks, and not allowed to leave their homes except for specific errands. This obviously has affected retail firms, which serve customers’ recurring needs and often rely on a physical store for service provision. Early during the COVID-19 pandemic in Sweden, the turnover of grocery firms was unaffected, whereas apparel and footwear firms lost up to 80% of their turnover. Retail firms have been forced to adapt to the COVID-19 pandemic by developing and introducing service innovations directed towards improving customer safety (Roggeveen and Sethuraman, 2020). Undoubtedly, the COVID-19 pandemic elevated service innovation to a critical strategic issue, as many retail firms had to innovate to survive and stay in business (Heinonen and Strandvik, 2020). However, the question of how exactly retail firms innovate to make customers feel safe and attract them to their stores during the COVID-19 pandemic remains to be answered.

Service innovation is a key factor for differentiation and improving the relative attractiveness of retail firms (Lee et al., 2022). Bolton et al. (2014) suggested that continuous small changes are key for service innovation and can make a big difference for retail firms trying to differentiate the customer experience and improve their relative attractiveness. By studying innovations introduced during the COVID-19 pandemic, Heinonen and Strandvik (2020) identified 11 categories of imposed service innovations, including innovations in service delivery, physical distancing, and remote presence. They further argued that firms have used their innovativeness to overcome the circumstances brought about by the COVID-19 pandemic and simultaneously improved their relative attractiveness. Service innovations are of different types and can be analyzed in various dimensions and categories (Snyder et al., 2016). This suggests that certain dimensions of service innovation might create more value for customers and thus decisively influence their perceptions of retailers’ innovativeness. Prior research does not provide conclusive evidence on the dimensions of service innovation that retail customers appreciate the most.