International Journal of Retail & Distribution Management

Comparing online and in-store risks in multichannel shopping

Christophe Bezes,
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International Journal of Retail & Distribution Management, Vol. 44 Issue: 3, pp.284-300, https://
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IJRDM
44,3
284
Received 4 February 2015 Abstract
Revised 22 May 2015
21 September 2015
Purpose – The purpose of this paper is to compare empirically the nature, level and influence of
Accepted 22 September 2015 perceived risks involved in a retailer’s website and stores, as multichannel shoppers will do when
Downloaded by IQRA UNIVERSITY At 07:45 24 September 2018 (PT)
International Journal of Retail &
Distribution Management
Vol. 44 No. 3, 2016
pp. 284-300
© Emerald Group Publishing Limited
0959-0552
DOI 10.1108/IJRDM-02-2015-0019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0959-0552.htm
Comparing online and in-store
risks in multichannel shopping
Christophe Bezes
ISTEC, Paris, France
deciding which distribution channel to buy in.
Design/methodology/approach – The research design uses an online survey of 1,015 multichannel
customers that was drawn from the behavioural databases of a French multichannel retailer.
Findings – Overall risk as well as risks associated with logistics, psychological and performance are
higher and more dissuasive for an online purchase; however, financial, time and transaction risks tend
predominantly or exclusively to discourage in-store purchasing. Customers’ familiarity with the
channel seems to make them more vigilant.
Research limitations/implications – The concept of risk, and especially financial risk, is variable
among researchers, making it more difficult to undertake comparative studies on e-commerce than on
stores or products.
Practical implications – Retailers should not look merely to the salience of an isolated risk factor
but rather should consider its actual impact on their customers’ final decision. Nonetheless, retailers
will find it more difficult to reduce perceived risk online than in-store.
Originality/value – By focusing on a multichannel retailer’s website and stores and comparing the
effects of six types of risk on the purchase attitudes of its multichannel shoppers, this study is distinct
from most single-channel studies, which have examined risk inherent in internet purchasing, handled
risk on an experimental website and explored in-store risk. Moreover, the study focuses on the risks
entailed by the purchase channel rather than those related to particular products or brands.
Keywords Perceived risk, Store, Website, Channel purchase attitude, Multichannel shoppers
Paper type Research paper
1. Introduction
15 years ago, Alba et al. (1997) predicted that online shopping would inevitably
cannibalise offline shopping, except for experience products. Despite this prediction,
41 per cent of European internet users have yet to buy or even order products and
services online (Seybert, 2012). Most researchers ascribe the reluctance of internet users
to switch to online shopping to their distrust of e-tailers or, as a corollary (Mitchell,
1999), the greater perceived risk factors associated with online shopping (Ko et al., 2004;
Eggert, 2006; Kwon and Lennon, 2009): the upsurge in payment method fraud or
personal information theft (phishing); lack of contact with sales staff and the difficulty
in relying on item visualisation alone (Shim and Lee, 2011); uncertain delivery or
product return conditions; and ever-fluctuating internet prices that may reinforce the
financial risk of buying online (Ha and Coghill, 2008).
Uncertainty about the purchase process explains also why multichannel shoppers
obtain information from the internet but prefer to shop in-store (Liang and Huang,
1998) or refuse to switch from the store to the website (Gupta et al., 2004). This array of
issues puts merchant websites at a disadvantage compared to stores (San Martín and
Camarero, 2009).
However, since the work of Biswas and Biswas (2004), Cunningham et al. (2005)
and Eggert (2006), no other research has compared empirically online and in-store
 purchase risks. Moreover, most research on perceived risk looks at either the level of Risks in
perceived risk or its impact on purchase attitudes, but rarely both. This relative gap in multichannel
the scholarly literature is all the more unfortunate as perceived risk has long been used
to explain shoppers’ decision to adopt a new distribution channel or stick to their usual
shopping
channel (Lumpkin and Dunn, 1990). Since 80 per cent of retailers have now gone
multichannel (Kilcourse and Rowen, 2008), they have much to gain from examining
their website and stores in the light of perceived risk, with a view to better anticipating, 285
preventing or encouraging customer switchover from one channel to the other
(Reardon and McCorkle, 2002). For example, in a multichannel environment, the trust
generated by a retailer’s stores can enhance confidence in its site and thus increase
online shopping intentions (Hahn and Kim, 2009).
Accordingly, this research aims to answer the following question: in a real
multichannel context, are the risks associated with website and in-store purchasing of
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the same nature, intensity and impact? By comparing consumer risk perception when
purchasing through a single multichannel retailer’s website and stores, this approach
distinguishes the present study from most single-channel studies, which have
examined risk inherent in internet purchasing (Forsythe and Shi, 2003), handled risk on
an experimental website (Kwon and Lennon, 2009) and explored in-store risk (Mitchell
and Harris, 2005). Moreover, this study focuses on a large number of genuine
multichannel buyers, that is, people who have actually bought items from the website
and stores of the retailer under study (vs multichannel consumers who have looked up
information on the website but bought in-store only).
First, the conceptual framework of the research will be outlined, followed by a
presentation of the methodology used and a discussion of the results of an empirical
study analysing 1,015 multichannel buyers patronising a French multichannel retailer.

2. Literature review: overall perceived risk and specific risks in retailing

Perceived risk is a key concept for understanding consumer behaviour (Mitchell and
McGoldrick, 1996; Eggert, 2006). Rousseau et al. (1998, p. 395) define it as “the perceived
probability of loss, as interpreted by a decision maker”. Risk is particularly significant
during the stages of evaluating alternatives and making a purchase decision
(Cunningham et al., 2003; San Martín and Camarero, 2009), both with regard to
products (Derbaix, 1983) and distribution channels (Cox and Rich, 1964). In fact, it
“attaches not only to what is acquired but also to how or where it is acquired” (Hisrich
et al., 1972, p. 435). Initially utilised to explain refusal to use distance-selling channels
(Cox and Rich, 1964; Mitchell and McGoldrick, 1996), perceived risk applies to physical
outlets as well. To lessen consumer resistance to online purchasing (Forsythe and Shi,
2003), Featherman and Pavlou (2003), and Gefen et al. (2008), all argue in favour of
focusing on perceived risk rather than on trust. A risk-focused approach gives a better
understanding of consumer fears about the functionalities of the website,
misappropriation of data and post-purchase disappointment, and helps identify
ways of mitigating those concerns (Gefen et al., 2008).
Overall perceived risk is defined as “the likelihood that purchase of the item will
result in general dissatisfaction of the consumer” (Pires et al., 2004, p. 120); it can
be viewed as a reflective construct (Cases, 2002b; Laroche et al., 2003) or a
multidimensional construct (Zikmund and Scott, 1974) and thus a formative index that
factors in some or all of the specific risks. Research has identified several types of
specific risks, including performance, financial, time, physical, psychological and social
risks – which are not necessarily unrelated (Liljander et al., 2009). Frequently attributed
 IJRDM to the product (Cunningham, 1967; Kaplan et al., 1974; Stone and Gronhaug, 1993), these
44,3 specific risks were transposed directly in store-focused studies, with a view to retaining
the same conceptual content used for products (Mitchell and Harris, 2005). That is
precisely what Pires et al. (2004) did when considering online perceived risk, while
keeping the initial definitions. Other researches such as Featherman and Pavlou (2003)
and Lopez-Nicolas and Molina-Castillo (2008) simply added new risks (privacy risk,
286 delivery risk, customer service risk). However, many e-commerce researchers have
changed the content of psychological risk or financial risk. For example, Herrero
Crespo et al. (2009) add fraud risk to the purely financial risk entailed when making an
internet purchase, and Biswas and Biswas (2004), delivery risk. Conversely, Forsythe
and Shi (2003) only include credit card fraud in financial risk and the violation of
privacy in psychological risk rather than a feeling of loss of control caused by a
deceptive purchase. This complicates comparisons across studies and channels.
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In keeping with the initial definitions, current research defines psychological,

financial, time and performance risks by transposing their meaning faithfully from
product to channel. Also, two additional risks have emerged from the large volume of
e-commerce literature: transaction risk (privacy and security) and logistics risk
(delivery, product pickup or return). Those two risks are also applied to stores to enable
cross-channel comparisons (Table I).

3. Formulation of hypotheses
Because it is appropriate to evaluate not only the level of perceived risk but also its
impact on purchase attitude, the first two research hypotheses focus on the level of
perceived risk, and the other four on its influence on purchase attitude on the website or
in-store. H1, H3 and H5 are tested using a reflective construct of overall perceived risk.
They are tested on customers with prior shopping experience in the retailer’s two
channels. To get a more detailed picture, H2 and H4 no longer examine overall risk but
rather the six-specific risks.

Financial risk Probability of losing money when buying from the website or a store (Cunningham,
1967; Roselius, 1971; Kaplan et al., 1974; Pires et al., 2004; Stone and Gronhaug, 1993;
Featherman and Pavlou, 2003; Lopez-Nicolas and Molina-Castillo, 2008; Lee, 2009;
Nepomuceno et al., 2012)
Performance Probability of making a mistake in choosing a product on the website or in a store
risk (Cunningham, 1967; Roselius, 1971; Kaplan et al., 1974; Stone and Gronhaug, 1993;
Featherman and Pavlou, 2003; Pires et al., 2004; Lopez-Nicolas and Molina-Castillo,
2008; Lee, 2009)
Psychological Probability of anxiety or loss of self-esteem when buying a product from the website
risk or a store (Cunningham, 1967; Roselius, 1971; Kaplan et al., 1974; Stone and Gronhaug,
1993; Featherman and Pavlou, 2003; Laroche et al., 2004; Pires et al., 2004)
Time risk Probability of time loss in looking up information and buying the product from the
website or a store (Cunningham, 1967; Roselius, 1971; Kaplan et al., 1974; Stone and
Gronhaug, 1993; Featherman and Pavlou, 2003; Laroche et al., 2004; Pires et al., 2004;
Lopez-Nicolas and Molina-Castillo, 2008; Lee, 2009)
Table I. Transaction Probability of having banking or personal data stolen (Featherman and Pavlou, 2003;
Definition of specific risk Biswas and Biswas, 2004; Eggert, 2006; Lee, 2009)
risks analysed in Logistics risk Probability of having product pickup, delivery or return problems (Mick and
this study Fournier, 1998; Lopez-Nicolas and Molina-Castillo, 2008)
 3.1 A comparison of perceived risk levels on the website and in-store Risks in
The literature shows that distance-shopping risk is higher than in-store risk (Cox and multichannel
Rich, 1964; Lumpkin and Dunn, 1990). This is particularly true of the internet
(Cunningham et al., 2005; Eggert, 2006; Korgaonkar and Karson, 2007), mainly because
shopping
the use of any new medium entails inherent risk (Bettman, 1973; Andrews and Boyle,
2008). By its very nature (a non-interactive purchase) and due to its relative novelty,
online purchasing generates more uncertainty than in-store purchasing (Shim and Lee, 287
2011). The uncertainties surrounding the purchasing process explain why it is more
difficult to convert visitors into buyers on the website than in-store (Biswas and
Biswas, 2004; Ko et al., 2004; Eggert, 2006):
H1. Overall perceived risk level is higher online than in-store.
But are all specific risk levels higher on the website than in-store? Every study that
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has compared those risks (Biswas and Biswas, 2004; Laroche et al., 2004; Eggert,
2006) demonstrates that online purchasing is riskier than in-store purchasing in
terms of performance risk (difficulty in appreciating the actual size of products,
information deficit or excess), financial risk (e.g. opportunity costs related to ever-
fluctuating prices of online products), and transaction risk (privacy and security). For
Eggert, transaction risk outweighs product intangibility, whereas Cunningham et al.
(2005) argue that performance risk is prevalent at most stages of the purchase
process. Nevertheless, Pires et al. (2004) find that financial risk precedes performance
risk in terms of salience. Laroche et al. (2004) add psychological risk associated with
newness (the internet), time risk and social risk. Eggert (2006) concurs, except with
regard to social risk, which might not have any real impact until the evaluation of
alternatives stage (Cunningham et al., 2005). However, with the reduction in login
time and the optimisation of merchant websites’ ergonomics and content, time risk
may now be lower on the website than in-store. This situation is consistent with
internet-specific convenience and time gain benefits, even if consumers are more
sensitive to faulty delivery risks (Cheng et al., 2008) when purchasing online than
they are when buying in-store (Eggert, 2006):
H2. (a) Performance risk, (b) financial risk, (c) psychological risk, (d) transaction risk
and (e) logistics risk levels are higher online than in-store, but time risk (f) is
lower online.

3.2 A comparison of the influence of perceived risks on online and in-store purchasing
Because of the range of emotions it can incite, a purportedly low risk can have a greater
impact on consumer behaviour than a supposedly higher level risk. This discrepancy
between the level of perceived risk and its impact can be explained by the fact that
individuals tend to “evaluate the risk cognitively” and “react to it emotionally”
(Loewenstein et al., 2001, p. 280), resulting in a situation that insurance companies are
especially adept at leveraging effectively. For example, negative emotions are largely
responsible for variance in perceived risk (Chaudhuri, 1997).
Perceived risk on the internet (Garbarino and Strahilevitz, 2004) or on a merchant
website ( Jarvenpaa et al., 2000) strongly impacts the purchase intentions in that
channel – through online purchase attitude (Herrero Crespo et al., 2009). This risk is
even higher than with product- or seller-related risk (San Martín and Camarero, 2009).
The fact that the risk is greater online than in the traditional channels (Cunningham
et al., 2005) considerably reduces the likelihood of converting the website’s visitors into
 IJRDM internet shoppers (Ko et al., 2004). This explains why a pure player is at disadvantage
44,3 compared to a multichannel retailer (Korgaonkar and Karson, 2007):
H3. Overall perceived risk negatively impacts the online purchase attitude more
than the in-store purchase attitude.
However, none of the studies draw on the influence of specific risks to make an
288 empirical comparison between online and in-store purchase attitude. A review of the
work of Forsythe and Shi (2003), Mitchell and Harris (2005), Eggert (2006) and
Aghekyan-Simonian et al. (2012) shows a prevalence of performance, financial and
psychological risks in these two channels. Performance risk seems to impact online
purchasing very strongly (Aghekyan-Simonian et al., 2012), whereas financial risk is
known to prevail during in-store purchasing (Cunningham et al., 2005). In addition,
while time risk has less influence online than in-store (Herrero Crespo et al., 2009),
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logistics risk (Cheng et al., 2008; Chen et al., 2010; Ramanathan, 2011) and, to a lesser
degree, transaction risk (Featherman and Pavlou, 2003; Aghekyan-Simonian et al.,
2012) may affect online purchasing far more negatively (Cases, 2002a; Laroche et al.,
2004; Eggert, 2006):
H4. (a) Performance risk, (b) psychological risk, (c) logistics risk and (d) transaction
risk have a more negative impact on the website than on the in-store purchase
attitude; conversely, (e) financial risk and (f) time risk have a more negative
impact on the in-store purchase attitude.

3.3 Variables moderating the impact of overall perceived risk on purchase attitude
The perception of risk varies depending on the type of products or services bought
(Hisrich et al., 1972; Forsythe and Shi, 2003; Pires et al., 2004) and according to the
consumers’ personal characteristics (Garbarino and Strahilevitz, 2004; San Martín
Gutiérrez et al., 2010). Such characteristics include consumer familiarity with the
channel, meaning “the consumer’s degree of acquaintance with the selling entity, which
includes knowledge of the vendor and understanding its relevant procedures such as
searching for products and information and ordering” through the channel (Kim et al.,
2008, p. 551). Familiarity has a crucial influence insofar as it reduces the uncertainty
and complexity of the search and the purchase, particularly by bringing the level of
future expectations in line with the outcomes of past interactions (San Martin and
Camarero, 2009). Hence, perceived risk is presumably less dissuasive for regular,
merchant website visitors and shoppers (Forsythe and Shi, 2003) as well as for
customers who frequent stores. And although familiarity with the website augments
the consumer’s feeling of trust towards the e-tailer, it does not necessarily reduce the
risk associated with online purchasing (Kim et al., 2008).
H5. Familiarity with (a) the website or (b) the store reduces the negative effect of
overall perceived risk on (a) the online or (b) in-store purchase attitude.

4. Methodology
4.1 Data collection
This study looked at the website and stores of a French multichannel retailer of
technical and cultural products, with extensive experience in multichannel
management. Its online and offline stores are credible alternatives for
consumers. The sample consists of 1,015 customers taken from the retailer’s
 behavioural databases, all of them multichannel shoppers who have bought Risks in
tangible products from the retailer’s website and stores within the preceding multichannel
24-month period. 85 per cent of the multichannel shoppers surveyed bought
more or much more in-store, compared to 14.3 per cent more on the website.
shopping
The sample is broken down as follows: 68 per cent are men, with average age
47.6. They are keen in-store shoppers (59.2 per cent shop at least once a month) and
even keener online shoppers (at least 92 per cent shop online at least once a month). 289
70.7 per cent had made their first online purchase (on any website) more than four
years earlier.
The questionnaire was administered online. In order to measure mirror variables of
strictly identical content but describing different manifestations, the same
measurement scales were used for the website and the stores (Table II). For each
item, all respondents assessed the site and then, immediately afterwards, the store in
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accordance with the Choice by Processing Attributes method used by Bettman and
Kakkar (1977).

7-point Likert-scales (strongly Stores Website

disagree to strongly agree) Item description or construct definition CR AVE CR AVE

Attitude towards purchase in I like the idea of buying a digital 0.953 0.872 0.953 0.871
channel (adapted from Jarvenpaa camera from X’s website (from X’s
et al., 2000) store)
Using X’s website (X’s store) to buy a
digital camera would be a good idea
The idea of using X’s website (X’s store)
to buy a digital camera is appealing
Perceived overall risk associated Generally, I’m sure that I will incur 0.919 0.791 0.927 0.809
with each channel (adapted from some risk if I buy a digital camera from
Laroche et al., 2003) X’s website (from X’s store)
All things considered, I have the feeling
that the purchase of a digital camera
from X’s website (from X’s store) will
really cause me a lot of trouble
Basically, I’m sure I will make a
mistake if I buy a digital camera from
X’s website (from X’s store)
Specific risks (single-item from If I buy a digital camera from the – – – –
Van der Heijden et al., 2003; Stone website (from a store), I risk:
and Gronhaug, 1993) losing money (financial risk)
wasting my time (time risk)
picking out the wrong products
(performance risk)
feeling nervous (psychological risk)
having my financial and personal
information stolen (transaction risk)
having pickup, delivery or product
return problems (logistics risk)
Familiarity with channel Usually, for whatever reason, I visit the – – – –
website (stores) X: never, less than once
a year, at least once every trimester, at Table II.
least once a month, at least once a week Measurement scales
 IJRDM 4.2 Measurement scales
44,3 Stimulus and situational effects were monitored to obtain more consistent responses
from a retailer offering a wide range of products. Drawing on Bettman’s (1973) distinction
between inherent risk and handled risk, the study focused on the handled risk involved in
the purchase in the channel. Following Ajzen’s (1991) recommendation, the questionnaire
centred on a specific action: the purchase of a digital camera. This product was selected
290 for various reasons, including its tangibility, its fairly high price, and the fact that there is
an equal propensity for buyers to purchase it online and in-store.
However, this study gives precedence to analysing purchase channel-related risk
over product-related risk, although the latter risk is commonly the focus in similar
studies. Instead of aggregating various types of risks that would change the reflective
measurement scale into a formative index, we use an overall risk measurement,
as suggested by Lumpkin and Dunn (1990). A meta-analysis shows that a global
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construct predicts the amount of information sought better than more specific risks
(Gemünden, 1985).
In addition, each specific risk was evaluated using single-item measurements, taken
from the scales developed by Van der Heijden et al. (2003) and Stone and Gronhaug
(1993); an item specific to logistics risk was introduced. The choice of a single-item
measure, which simplified the questionnaire and reduced the cognitive biases, seemed
appropriate because the construct is concrete and singular (Bergkvist and Rossiter, 2007).
Familiarity with the channel was also measured by means of a question about the
frequency of website and store patronage. The more often an individual visits a retail
channel, the greater his familiarity with it (Bart et al., 2005).
Each scale has excellent psychometric qualities for both the website and the stores.

5. Results and discussion

H1 and H2 suggest higher levels of overall and specific risk on the website, except for
the level of time risk, which can be higher in-store (Table III). A comparison of averages
shows that overall risk is significantly higher for an online purchase (t ¼ 15.32;
p ¼ 0.000), even for customers who have all bought in both of the retailer’s channels.
This observation corroborates Liang and Huang’s (1998) conclusion. H1 is confirmed.
This also holds for transaction risk (t ¼ 13.26; p ¼ 0.000), performance risk (t ¼ 12.59;
p ¼ 0.000) and logistics risk (t ¼ 18.38; p ¼ 0.000), as well as for psychological risk
(t ¼ 11.78; p ¼ 0.000), which is often described as an offshoot of other risks. Conversely,
time risk is higher for an in-store purchase (t ¼ −7.14; p ¼ 0.000). This result probably
stems from the technical and ergonomics breakthroughs undergone by the internet and
e-commerce subsequent to the studies by Laroche et al. (2004) and Eggert (2006).

Types of perceived risk scale: 1 (low risk) Perception of website Perception of store
to 7 (high risk) purchase risk purchase risk

Overall risk 2.64 2.20

Financial risk 3.12 3.15
Time risk 2.49 2.72
Table III. Performance risk 2.91 2.46
Perception of website Transaction risk 2.29 1.93
and store purchase Logistics risk 2.99 2.18
risks Psychological risk 2.49 2.08
 Finally, financial risk outweighs performance risk on the internet, even in the purchase Risks in
stage of a tangible product (vs service), which corroborates the findings of Pires et al. multichannel
(2004) rather than those of Cunningham et al. (2005). But the level of financial risk is the
same for the website and stores, which challenges the conclusions of Biswas and
shopping
Biswas (2004), Laroche et al. (2004) and Eggert (2006): t ¼ −1.52; p W 0.05. For this
reason, H2b is not confirmed, whereas H2a, H2c, H2d, H2e and H2f are.
H3 and H4 suggest that overall risk and most specific risks have more of a 291
detrimental effect on online purchasing than on in-store purchasing, except for
financial and time risks which have more impact on in-store purchasing. Insofar as the
sample is identical across the two channels studied, a direct comparison of the adjusted
R2 value (0.189 for the website compared to 0.116 for the store) demonstrates that the
negative effect of overall perceived risk is stronger for online purchase attitude than for
in-store purchase attitude (Table IV). This finding partly explains why online stores are
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hard pressed to convert their visitors into buyers (Ko et al., 2004), even when the retailer
has a long established multichannel presence, as is the case here. H3 is confirmed.
However, while overall risk is higher and more dissuasive online than in-store
(H1 vs H3), the highest specific risks are not necessarily the most influential (H2 vs
H4). Backward multiple linear regressions carried out on specific risks and purchase
attitude show that their influence varies significantly depending on whether they
concern the site or the stores (Table V). A major drawback of online retail is the
impossibility of handling products prior to buying them (performance risk) and the gap
between purchasing and experiencing the product (time risk), particularly due to
delivery or product return problems (logistics risk). While performance risk does
appear to be one of the three major risks across website and stores, financial risk –
which has a strong influence on in-store purchasing – has no impact on online
purchasing. Conversely, logistics risk is among the three highest risks that arise during
an internet purchase, corroborating prior research findings (Cheng et al., 2008; Chen
et al., 2010; Ramanathan, 2011). Psychological risk only impacts the website, not the

Standardized regression coefficients Website Store

Table IV.
Overall risk→channel purchase attitude −0.436*** −0.342*** Influence of overall
Adjusted R2 0.189 0.116 risk on channel
Note: ***p o0.000 purchase attitude

Influence of specific risks Influence of specific risks

Standardized regression coefficients on online purchasing on in-store purchasing

Financial risk −0.057 −0.137***

Time risk −0.138*** −0.165***
Performance risk −0.162*** −0.133**
Transaction risk 0.064 −0.136**
Logistics risk −0.137** – Table V.
Psychological risk −0.091* – Influence of risk
Adjusted R2 0.177 0.188 types on channel
Notes:*p o0.05; **p o0.01; ***p o0.000 purchase attitude
 IJRDM store: this may be explained by the relative novelty of e-commerce compared to in-store
44,3 shopping. These results call into question some of the conclusions drawn by Forsythe
and Shi (2003), Mitchell and Harris (2005) and Eggert (2006), but corroborate the
findings of Aghekyan-Simonian et al. (2012) finding on the prevalence of performance
risk during an online purchase. Thus, efforts to improve online advice and product
visualisation (Dahan and Srinivasan, 2000; Shim and Lee, 2011) should be encouraged,
292 while avoiding information overload that would reinforce time risk (Bobitt and
Dabholkar, 2001).
On the other hand, unlike Herrero Crespo et al.’s (2009) conclusions, stores are more
disadvantaged by time risk (worry about travelling with no guarantee of finding
desired products) and financial risk (underlying opportunity risk, particularly in
relation to more competitive pure players). There may be two reasons for the significant
effect of financial risk on attitude towards in-store purchase, but not on purchase
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attitude towards the site: first, opportunity risk, which is an integral part of financial
risk, is logically more present in stores, as opposed to online stores, that generally have
a better price image; second, the financial risk measured here is consistent with the
original conception, which was also used by Pires et al. (2004). This strict conception of
financial risk does not include two significant risks on the internet: the risk of bank
data theft (transaction risk), and the risk of defective delivery (logistics risk).
Consequently financial risk is less influential in the present study and the study by
Pires et al. (2004) than in the work of Herrero Crespo et al. (2009) or Biswas and Biswas
(2004), which included transaction and delivery risks within online financial risk. H4a,
H4b, H4c, H4e and H4f are confirmed (Table V).
However, transaction risk (theft of banking or personal information) – though lower
in-store than online (H2d) – only has a negative effect in-store, contrary to findings in
prior studies. H4d is disconfirmed. The surprising lack of impact of transaction risk on
online purchasing, as previously revealed by Cho (2004), can be explained in four ways.
First, as early as 2003, Forsythe and Shi pointed out the negligible effect of the risk of
personal data theft compared to the risk of banking data theft. Second, in their
qualitative study, Andrews and Boyle (2008, p. 67) show that there is a significant
mismatch between the popular judgment about the risk of e-commerce credit card
fraud and respondents’ actual experience. Third, because the likelihood of having one’s
banking or personal data stolen in-store is so much lower than online, the emotional
repercussions of such an in-store theft would be far greater (Loewenstein et al., 2001).
Lastly, consumers perhaps also relativise the extent of online transaction risk
compared to other types of risks (Cho, 2004).
The use of backward linear regression explains why some results in Table V
(in-store logistics and psychological risks) do not appear. The fact that certain risks (as
opposed overall risk) do not influence attitude shows the independence of the various
risks that make up the overall risk. No multicollinearity is observed between the
different specific risks: the VIF is less than 2.3 both for the site and the store.
H5 suggests that familiarity with the channel under examination moderates the
effects of overall perceived risk on: website or store purchase attitude. Regarding
familiarity with the channel, the Chow test helps disconfirm the null hypothesis for
website and store alike (p o 0.05). But contrary to prior assumptions, the impact of
overall perceived risk on purchase attitude increases for individuals most familiar with
the website and the stores (Table VI). This counterintuitive result contradicts Forsythe
and Shi’s (2003) findings with respect to internet purchasing, but may hinge on the
culture and type of product considered. Ueltschy et al. (2004) have shown that,
 depending on the national culture and the type of product studied, the shopping Risks in
experience does not necessarily reduce the perception of risk, nor, consequently, its multichannel
impact: such was the case with regard buying a computer on the part of USA (as
opposed to English or Canadian) respondents and buying clothes by British or USA
shopping
(as opposed to Canadian) respondents. The same may be true for familiarity (Kim et al.,
2008). With regard to buying a digital camera by French consumers, it might point to a
greater vigilance, or even a legitimate concern, on the part of people who buy primarily 293
from the website or store or who have had memorable bad experiences in the channel in
question. However H5a and H5b are disconfirmed.
Cross-validation was conducted on two halves of the randomly constituted sample.
Despite some heterogeneity of shopping behaviour on the site by multichannel buyers,
the results obtained on the full sample are confirmed on both subsamples.
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6. Conclusion
The purpose of this research was to compare empirically the nature, level and influence
of perceived risk online and in-store, as consumers will do when deciding which
distribution channel to buy in. Below list summarises the main findings of this
research.
Summary of main results:
• Overall purchase risk higher and more dissuasive on website than in-store.
• Higher perception of various types of risk on website than in-store, except for
financial risk.
• Logistics, psychological and performance risks more influential for an online
purchase. Financial, time and transaction risks more influential for an in-store
purchase.
• Higher risk sensitivity in customers most familiar with the channel.

6.1 Theoretical implications

For several reasons, this paper supplements and updates the few studies that have
compared in-store and online risk (Biswas and Biswas, 2004; Cunningham et al., 2005;
Eggert, 2006). First, given the special nature of the research methods employed (same
items to compare stores and website, same respondents surveyed), this study
contributes to the unification and enrichment of previous studies, whether they were
carried out by considering a single retail channel (most often the internet) or even using
a bi-channel approach (internet and store).

Website Store
Standardized Poor familiarity High familiarity Poor familiarity High familiarity
regression coefficients with the website with the website with the store with the store
Table VI.
Overall risk→channel Test of the
purchase attitude −0.422*** −0.445*** −0.281*** −0.375*** moderating effect of
Adjusted R2 0.176 0.196 0.077 0.139 channel familiarity
Chow test 7.43W3 F(2, 1,011): p o0.05 10.94 W3 F(2, 1,011): p o0.05 on the risk-attitude
Note: ***p o0.000 relationship
 IJRDM Second, this study focuses on a large number of genuine multichannel buyers, that is,
44,3 who have actually bought items from the website and stores of the retailer under study
(vs multichannel customers who have looked up information on the site but bought
in-store only).
Third, it compares consumer risk perception when purchasing through a single
multichannel retailer’s website and stores. This approach is thus different from most
294 single-channel studies, which have examined risk inherent in internet purchasing
( Jarvenpaa and Todd, 1997; Forsythe and Shi, 2003), handled risk on an experimental
website (Cases, 2002a; Kwon and Lennon, 2009) or in-store risk (Mitchell and Harris,
2005). Moreover, it focuses on the risks associated with the purchase channel rather
than risks related to particular products or brands (Derbaix, 1983).
Fourth, the author’s review of prior research is the first to point out that, in the
realm of e-commerce, certain risk content (notably, in the case of financial risk but
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also for psychological risk and time risk) varies widely from author to author,
depending on the researchers cited, unlike studies conducted on product or store-
related risk. This disparity is not due to any factors specific to internet websites, but
rather to a deliberate choice made by the researchers themselves. The variability in
concepts makes it difficult, if not impossible, to draw a comparison between past
studies on online risk, and, consequently, a comparison between studies focusing on
in-store risk. Not only does this paper make such comparisons possible, it also uses
exactly the same measurement items for the various types of perceived risks and
purchase attitude, allowing the author to make fully reliable and consistent inter-
channel comparisons.

6.2 Managerial implications

This study compares not only the level of each perceived risk but also its real impact.
Indeed, certain risks, which seem minor, have, in reality, a much greater impact on
customers’ purchase attitude than risks deemed to be much more important, probably
due to the emotions induced if the event feared actually occurs (Loewenstein et al.,
2001). Hence, retailers should not concentrate on the salience of one particular risk,
but rather its impact on their customers’ final decision. Yet professional marketing
studies tend to focus more on the level of perceived risk than on its influence on the
purchasing act. In the example studied, this misjudgement would lead the retailer to
primarily reduce financial risk on its website and across its two channels whereas it
should principally reduce performance risk on its website and time risk in the stores.
Thus retailers would benefit from identifying the most tolerable level of risk
(Featherman and Pavlou, 2003), by addressing this mismatch between the perception
and influence of risk.
Even for a retailer with an excellent image and longstanding experience with
multichannel distribution, perceived risk still disadvantages online selling over in-store
selling. Furthermore, customers’ familiarity with the channel seems to make them even
more vigilant.
This research highlights the risks to which a multichannel retailer should give
priority when seeking to build its online or in-store sales. Even so, prior to comparing
the major risks common to the website and physical outlets (performance and time
risks, in particular), one may wonder whether multichannel consumers focus first on
those risks that most set the two channels apart, namely financial risk for stores, and
psychological and logistics risks for the website. To reduce financial risk, a
multichannel retailer intending to increase its in-store sales can, for example, run
 in-store only deals that make its prices more attractive than those on its website Risks in
(or competitors’ websites). That is the strategy pursued by Darty (Kingfisher Group) multichannel
in France.
It will no doubt prove very tricky for a retailer to address online-related
shopping
psychological risk, as it is probably highly correlated with the risk inherent
in internet purchasing; and so such risk can be mitigated or ultimately eliminated
only though a change in mindsets, that is, in subjective norms (Pookulangara 295
et al., 2011). However, a retailer can act more on logistics risk by optimising its
last-mile and reverse logistics, and above all, by publicising its efforts in this
area. One solution would consist in showing more visibly on the retailer’s homepage
its commitment to providing a maximum, realistic and specified delivery time,
thereby better leveraging the store network (click and collect). This would make up
for the logistical underperformance of multichannel retailers compared to pure
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players, in particular Amazon.com (Ramanathan, 2011; Xing et al., 2011). It seems

fairly pointless to try and reduce transaction risk at all costs, considering that its
impact on online purchase behaviour appears to be overestimated, at least for a
well-known retailer.
Nevertheless, retailers will have more trouble reducing perceived risk on their
website than in their stores, as they can act only on the risk handled by their website,
but not on the risk inherent in the online channel in general.

6.3 Limitations and future research

One avenue of research could be to incorporate perceived risk into a network of larger
causalities, making it possible not only to address the channels’ images but also their
perceived value, so as to mitigate the impact of risk on the purchase channel choice
process. As the facts have shown, the importance of perceived risk decreases to the
benefit of perceived value as internet shoppers gain more online experience (Forsythe
et al., 2006). Also, it seems easier to improve perceived value than to reduce online
purchase risk (Lee, 2009). This task could be performed at each stage of the decision
process, including during the information search, evaluation of alternatives and
purchase stages (Chau et al., 2007). Finally, in this age of social media, it would have
been of interest to address social purchase risk across the channels. A second line of
research would involve taking into account the respondents’ sense of risk aversion and
emotions. A final area of study could set out to identify the mix of risk relievers most
likely to reduce the specific risks that are the most influential in each channel of the
retailer under study.
That said, there are four main limitations evident in this research. One concerns the
area of investigation selected. The channels studied are long established and benefit
from the retailer’s excellent image, which may limit online purchase risk. Further
insight could be gained by repeating the analysis using other retailers, while
specifically looking at the influence of transaction risk across their websites and stores.
Another limitation relates to the type of respondents surveyed, namely loyalty-card
holders who have previously bought in both channels. An investigation into absolute
non-customers or customers who are strictly in-store shoppers might have suggested a
different hierarchy of risks, especially if their risk aversion had been taken into
consideration.
The third limitation relates to the product used to evaluate the risk related to the
purchase channel. The selection of a digital camera, a product that is technologically
complex and bought only occasionally, may have heightened the prevalence of
 IJRDM performance risk (Biswas and Biswas, 2004). Also, it would have been useful to assess
44,3 product-specific risk and, in turn, evaluate the additional risk entailed by the use of the
channel (San Martín Gutiérrez et al., 2010).
Finally, it would be useful to compare these declarative results, focused on beliefs
and attitudes, with behavioural data pertaining to the actual purchase of the product.

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 IJRDM Further reading
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About the author

Dr Christophe Bezes is a Professor in Marketing at ISTEC Paris. He is the founder of a consulting
300 company: Click M’Brick. Multichannel retailing has been the focus of his studies and research
since 1990. He has recently published in the Journal of Business Research and the International
Journal of Retail & Distribution Management. Dr Christophe Bezes can be contacted at:
c.bezes@istec.fr
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