Online Mass Customization and the Customer Experience

Arnold Kamis, Bentley CollegeMarios Koufaris, Baruch CollegeTziporah Stern, Baruch College

NJIT - November 22, 2004

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

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

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?

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?

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?

Study variables

Measure success of system through customer experience:

Perceived ease of use Perceived usefulness Perceived control Enjoyment

Effect of the interface: alternative vs. attributeEffect of variety: Number of possible product versionsUser characteristics: Computer anxiety and computer playfulness

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

Variety: Is more choice always better?

Hypothesis: Overall, enjoyment of online MC customers will follow an

inverted U-shaped curve as variety increases.

Satisfaction Regret

Positiveness of consumption experience

Variety

Source: Desmeules, 2002

Variety and Interface

Attribute-based interface reduces task complexity and cognitive effortHypotheses: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.

The User

Computer anxiety and computer playfulness will moderate the effect of interface on customer experienceHypotheses:

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.

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

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 conditionsTold that they may win customized watch or backpack (incentive)At the end, filled out survey on their experience and themselves

Data Analysis

329 subjects recruited online through Zoomerang’s MarketToolsNationally representative sampleRan CFA with AMOS 4.0 to test validity and reliability of survey instrumentRan ANCOVAs to test hypotheses Covariates: Product Involvement and

Web Skills

ResultsInterface Perceived

Control Perceived Usefulness

Enjoyment

Alternative 5.226 (0.092) 3.833 (0.115) 4.179 (0.107) Attribute 5.913 (0.090) 4.725 (0.113) 5.112 (0.105) Mean differences are significant at p<0.001

Hypotheses supported: Overall, attribute-based interface provides a better customer experience than alternative-based interface.

ResultsEnjoyment

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

5

5.1

8 54 150

Variety

Est

imat

ed M

arg

inal

Mea

ns

Main effect of variety significant at p<0.01

Hypothesis supported: Enjoyment follows inverted U-shaped curve as variety increases

Interaction effect of interface and variety not significant

ResultsPerceived Control

4.5

4.74.9

5.1

5.35.5

5.7

5.96.1

6.3

8 54 150

Variety

Est

imat

ed M

arg

inal

Mea

ns

Alternative

Attribute

Interaction effect of interface and variety significant at p<0.01

Hypothesis supported: Perceived control decreases as variety increases in alternative-based interface but remains constant in attribute-based interface

ResultsPerceived Ease of Use

4.8

5

5.2

5.4

5.6

5.8

6

6.2

6.4

8 54 150

Variety

Est

imat

ed M

arg

inal

Mea

ns

Alternative

Attribute

Interaction effect of interface and variety significant at p<0.05

Hypothesis supported: Perceived ease of use decreases as variety increases in alternative-based interface but remains constant in attribute-based interface

ResultsEnjoyment

3

3.5

4

4.5

5

5.5

6

Low High

Computer Anxiety

Es

tim

ate

d M

arg

ina

l M

ea

ns

Alternative

Attribute

Perceived Usefulness

33.23.43.63.84

4.24.44.64.85

Low High

Computer Anxiety

Es

tim

ate

d M

arg

ina

l M

ea

ns

Alternative

Attribute

Categorized computer anxiety into low-medium-high and excluded medium

Interaction effect of interface and computer anxiety significant at at least p<0.05

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)

ResultsPerceived Control

5.2

5.4

5.6

5.8

6

6.2

6.4

6.6

Low High

Computer Playfulness

Alternative

Attribute

Perceived Ease of Use

4

4.5

5

5.5

6

6.5

7

Low High

Computer Playfulness

Alternative

Attribute

Categorized computer playfulness into low-medium-high and excluded medium

Interaction effect of interface and computer playfulness significant at p<0.05 for p. control and significant only at variety=150 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)

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

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

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

Questions?Comments?

Marios KoufarisDepartment of Statistics and Computer Information

SystemsZicklin School of Business

Baruch College, CUNYmarios_koufaris@baruch.cuny.edu