Information Systems Frontiers

https://doi.org/10.1007/s10796-019-09894-1

An Empirical Assessment of Service Quality, Service Consumption

Experience and Relational Exchange in Electronic Mediated
Environment (EME)
Hua Dai 1 & A. F. Salam 2

# Springer Science+Business Media, LLC, part of Springer Nature 2019

Abstract
This study examines how service quality and service consumption experience affect long-term relational exchange in the EME to
provide insights into consumers’ perception of service consumption experience and its potential influence on the development of
long-term exchange relationship between consumers and service providers in the EME. An analytical framework is developed
and tested to validate a comprehensive research model of service consumption experience, its formative dimensions and its
antecedents and consequents. The proposed research model is empirically assessed and validated using a sample of 772 respon-
dents. This study contributes to the development of the service consumption experience construct in the EME and informs firms
in developing an integrated experiential strategy to meet customer requirements and expectations to further improve customer
loyalty and word-of mouth communication in the EME.

Keywords Service . eService . Service experience in EME . Service quality . Relational exchange . Service consumption

1 Introduction Spohrer 2006). According to the US Department of Labor

What is service consumption experience in Electronic
Mediated Environment (EME) and what are its dimensions?
What role does service consumption experience play in con-
junction with service content quality and service delivery
quality in developing exchange relationship among con-
sumers and online service providers in the EME?
Consumers are considered as co-producers in the service con-
sumption process and intimately involved in defining, shap-
ing, and integrating the service; therefore, such interactions,
between consumers and service providers, are conceptualized
to be built around episodic experiences (Chesbrough and
* A. F. Salam
amsalam@uncg.edu
Hua Dai
hua.dai@csuci.edu
1
Martin V. Smith School of Business and Economics, California State
University Channel Islands, One University Drive,
Camarillo, CA 93012, USA
2
Department of Information Systems and Operational Management,
University of North Carolina at Greensboro, PO Box 26165,
Greensboro, NC 27402, USA
and AFL-CIO Fact Sheet 2015 forecast, the service sector will
account for about 78.8% of the US economy by 2018.
Services in most of the developed nations account for more
than 70% of the respective country’s GDP in 2015 (CIA,
2016). Interestingly, increasing number of these services are
offered and consumed through some form of Electronic
Mediated Environment (EME) with little or no direct human
intervention. By extending previous definitions of E-Service
(Rust and Lemon 2001; Fassnacht and Koese 2006), we de-
fine services in EME as being mediated via information tech-
nology (IT) where the consumer interacts with an appropriate
user interface such as web site, mobile phone, iPhone, PDA,
iPad, virtual world environment, tablets, etc., in order to gain
a consumption experience and pursue desired benefits for
another entity or the entity itself (self-service). This definition
implies three important characteristics of the service in EME.
First, it captures a broad sense of electronic services by includ-
ing all types of electronic media; second, the core offering of
IT based self-service must be considered by service providers
to deliver the benefits that consumers seek (Fassnacht and
Koese 2006; Dabholkar 1996); third, it adds consumption
experience dimension to the existing definition of e-service
which highlights consumer co-creation role in service con-
sumption (Vargo and Lusch 2004). Consumers are considered

as co-producers in the service consumption process and inti-
mately involved in defining, shaping, and integrating the ser-
vice; therefore, such interactions, between consumers and ser-
vice providers, are conceptualized to be built around episodic
experiences (Blazevic and Lievens 2008; Chesbrough and
Spohrer 2006). Several studies have investigated the impact
of service quality on exchange relationship including custom-
er satisfaction, attitudinal loyalty, and purchase intentions
(Jiang and Rosenbloom 2005; Jiang and Benbasat 2007).
Although these studies provide important insights into how
in general service quality affect exchange relationship, they
do not to consider service consumption experience as part of
the theoretical framework.
Literature in IS and marketing and traditional service re-
search has identified service as an intangible form of goods
that possesses several unique characteristics—intangibility,
heterogeneity, inseparability, and perishability (Lovelock and
Gummesson 2004; Wetzels et al. 2009). Today services are
delivered with understanding that consumers’ experience is
formed across all moments of contact with the firms (Sousa
and Voss 2006). In this experiential economy, companies and
service providers are wrapping experiences around traditional
offerings to sell them better and they will find that the next
competitive battleground lies in staging experience and
Bbusiness success will be bestowed upon companies who are
able to embrace and deliver compelling and emotionally en-
gaging customer experience—everyday, for all customer, ev-
ery time^ (Pine and Gilmore 1998, pp. 5). Services are essen-
tially Bvalue jointly created through the interaction of pro-
viders and clients^ (IBM, 2008).
Additionally, recent IS research on services (Setia et al.
2013; Kohler et al. 2011) emphasized the customer-centric
role as most important business strategy to serve and create
value for customers. In this context, customers become co-
producers of services and they themselves become operant
resources (Vargo and Lusch 2004). BThus, the value of any
exchange or relationship is perceived and determined by cus-
tomers on the basis of value-in-use^ (Bardhan et al. 2010, pp.
37). It is Bvalue-in-use^ that is central to the service consump-
tion experience and that reflects the core conceptualization
that consumers are co-creators of value in the context of ser-
vice dominant logic (Vargo and Lusch 2004). For example, if
a consumer using an online music service or online insurance
service finds it difficult to participate in consuming or using
the service over multiple episodes is likely to find the service
consumption experience to be less than optimal. And thus,
may find the service Bvalue-in-use^ to be less than acceptable
as the consumer is unable to enact and co-create ‘activities’ or
‘experiences’ that are integral to the service consumption and
value creation process.
Studies have differed widely in terms of conceptual model
as well as in terms of statistical significance, direction, and
magnitude of service quality effects (Carrillat et al. 2009) on
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attitudinal loyalty. Some studies have failed to find a signifi-
cant link between these constructs (Roberts et al. 2003),
whereas other studies have found that service quality
accounted for more than 60% in the variance of attitudinal
loyalty (Zeithaml et al. 1996). These contradictory findings
and inconsistencies raise important questions about the impact
of service quality on customer outcomes such as satisfaction
and attitudinal loyalty – a proxy for customer retention
(Reicheld 2003). A critical question that we consider in this
research is whether service consumption experience may pro-
vide a better explanation of the relationship between service
quality and exchange relationship. However, the transition
from selling the service to selling the experience is not easy
– especially in the Electronic Mediated Environment (EME).
The experiences have to meet consumers’ needs and eventu-
ally have to work and be deliverable (Pine and Gilmore 1998).
Increasingly, information and communications technologies
(ICT) along with electronic devices allow consumers and
business vendors to connect and share an experiential universe
with each other (Schmitt 1999; Zysman 2006).
Marketing and consumer behavior literature began to ex-
plore the consumption experience concept with Holbrook and
Hirschman’s seminal article in 1982. In their research, experi-
ence aspects of consumption have been conceptualized as
Binvolving a steady flow of fantasies, feelings, and fun;
Consumption is regarded as a primarily subjective state of
consciousness with a variety of symbolic meanings, hedonic
responses, and esthetic criteria^ (Holbrook and Hirschman
1982, pp.20). Since then, numerous studies in the marketing,
retailing, and consumer behavior research conceptualized and
investigated the constitution of consumer perceptions of con-
sumption experience. A number of IS and marketing studies
have focused on the emotion or hedonic dimension of con-
sumption experience. In addition, most literature on con-
sumers’ consumption experiences, in the traditional business
environment, did not differentiate the product consumption
from service consumption. Moreover, the notion of service
consumption experience is an under-explored area in the elec-
tronic mediated environment and in the IS literature. Several
IS studies investigated some of the antecedents of online ser-
vice quality such as navigation, visual appeal, timeliness, ac-
cess, content customization and reliability (Jiang and
Benbasat 2007; Palmer 2002) as well as service consumption
experience (Parboteeah et al. 2009; Vila and Kuster 2011;
Turel et al. 2010) and relational exchange constructs (Chang
and Chen 2010; Kim and Son 2009). These studies make
significant contribution and advance our knowledge related
to online services. However, studies that have investigated
antecedents of service quality (Jiang and Benbasat 2007;
Palmer 2002) do not develop a comprehensive model integrat-
ing these antecedents with service consumption experience
and subsequent impact on customer outcome variables such
as loyalty and word-of-mouth communication. Given the
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importance of services in EME and the varieties of services
available in such an environment, it has become increasingly
important to develop adequate conceptualization and empiri-
cal validation of service consumption experience and its role
in the development of long term exchange relationship be-
tween the consumer and the service providers in EME.
We believe that it is not sufficient to just understand con-
sumer’s perception to generate corresponding services in this
value creation process, but to develop a deeper understanding
of how that value transfers to the long-term relationship and
how this transfer is affected by the service consumption expe-
rience in EME. However, the extant information systems (IS)
literature has not adequately addressed this gap by providing
analytical framework that addresses the comprehensive view of
service consumption experience and its dimensions, anteced-
ents and consequents in the electronic mediated environment.
While some research has alluded to service consumption expe-
rience being multi-dimensional ((Thompson 2000; Carù and
Cova 2006), extant IS research neither provides the required
theoretical foundation nor empirical validation of the service
consumption experience construct. It is important to under-
stand not only the underlying dimensions of the service con-
sumption experience in EME, but also to correctly conceptual-
ize the construct and its relationship with the underlying dimen-
sions. This is important for both theory development and em-
pirical validation as well as for practical reasons related to the
increasing use of Information Technology in composing, deliv-
ering and consuming services in EME. Development of a long-
term exchange relationship by providing service consumption
experience through the electronic mediated environment is vi-
tal for any business to compete in this largely service-based
experiential economy (Pine and Gilmore 1998; Brown 2000).
Several IS studies investigated some of the antecedents of
online service quality such as navigation, visual appeal, time-
liness, access, content customization and reliability (Palmer
2002; Jiang and Benbasat 2007) and others investigated loy-
alty, value and Word-of-Mouth communication (Kim and Son
2009; Chang and Chen 2010; Parboteeah et al. 2009; Turel
et al. 2010; Luong 2005). Interestingly, studies that have in-
vestigated antecedents of service quality (Palmer 2002; Jiang
and Benbasat 2007) do not develop a comprehensive model
integrating these antecedents with service quality and subse-
quent impact on customer outcome variables such as satisfac-
tion, value and loyalty. Conversely, studies that have investi-
gated online service and online service quality (i.e.,
Parboteeah et al. 2009; Turel et al. 2010; Kim and Son
2009; Chang and Chen 2010; Cyr et al. 2006) do not consider
antecedents of service quality and their impact on customer
outcome variables. Satisfaction, value and loyalty are critical
constructs that directly impact customer retention and growth
for online services firms (Reicheld 2003). Consequently, there
is an increasing need for further conceptual development as
well as empirical assessment about the antecedents of EME
service quality and the effect of service quality on customer
relationship outcomes (Carrillat et al. 2009) such as satisfac-
tion, Word-of-Mouth communication, loyalty and value.
Moreover most of these studies have not considered the role
of service consumption experience in conjunction with service
delivery quality and service content quality and their potential
effect on customer exchange relationship in terms of value,
satisfaction, loyalty and word-of-mouth communication. It is
unclear how antecedents of online service quality, service con-
tent and delivery quality along with service consumption ex-
perience affect exchange relationship among consumers and
online service providers. Additionally, these studies do not
investigate either at the theoretical level or empirical level
the dimensions of the service consumption experience con-
struct. In this paper, we address these gaps in IS research.
2 Literature Review
Consumption experience has been largely considered as a
multidimensional construct, which includes several sub-
dimensions (Havlena and Holbrook 1986; Hirschman 1984).
The Havlena and Holbrook (1986) indicated that consumption
experience consist of a mix of utilities/hedonic, tangible/intan-
gible, or objective/subjective components. They conceptual-
ized experience aspects of consumption as Binvolving a steady
flow of fantasies, feelings, and fun. Consumption is regarded
as a primarily subjective state of consciousness with a variety
of symbolic meanings, hedonic responses, and esthetic
criteria.^ More recently, Mathwick et al. (2002) defined con-
sumer perceptions of experiential value, which is Ba per-
ceived, realistic preference for product attributes or service
performances arising from interaction within a consumption
setting that facilitates or blocks achievement of customer goals
or purpose^. Recently concerns have been raised about the
limitation of focusing solely on emotion construct (Ladwein
2002) that Btends to overestimate the influence of sensorial
factors of on consumer’s emotions^ (Carù and Cova 2006,
pp.4). According to Pine and Gilmore (1999), an experience
may engage consumers on several dimensions. Carù and Cova
(2006) traced immersion dimension and emphasized it as one
significant dimension of consumers’ consumption experience.
However, there is no consensus on the constitution of dimen-
sions of consumption experience in existing marketing, con-
sumer behavior and information systems literature. Thus,
there is a need to develop a more holistic and multidimension-
al model of consumer’s perception of consumption experience
(Thompson 2000; Carù and Cova 2006).
Moreover, the notion of service consumption experience is
an under-explored area in the electronic mediated environ-
ment and in the IS literature. Since there is not much research
available in the extant IS literature that has investigated the
underlying dimensions of service consumption experience

and relational exchange in the electronic mediated environ-
ment, we develop and present a multi-dimensional conceptu-
alization of service consumption experience in this study
along with a nomological network of its antecedents and con-
sequents including relational exchange. We define service
consumption experience in the EME as consumer’s percep-
tions related to the facets of emotions, sensation, immersion,
participation, and playfulness arising from interaction with
service providers during consumption process of the service
in the EME. Here, we adopt Hirschman and Holbrook (1982),
Hirschman (1984), Pine and Gilmore (1998), Van der Heijden
(2004), and Carù and Cova (2006) conceptualization of con-
sumption experience and propose five dimensions of service
consumption experience in the EME, which incorporates ex-
tensive integration of past research, and is built upon a robust
and solid theoretical foundation. Although alternate conceptu-
alization of service consumption experience is available in the
marketing and consumer behavior research, we believe that
the rigorous theoretical analysis presented by Hirschman and
Holbrook (1982), Hirschman (1984), Pine and Gilmore
(1998), Van der Heijden (2004), and Carù and Cova (2006)
provide a strong theoretical underpinning for our conceptual-
ization of service consumption experience in EME.
2.1 Conceptualization of Service Consumption
Experience in the EME
2.1.1 Dimensions of Service Consumption Experience
Drawn from the extant literature on consumer behavior, mar-
keting, and the technology-based service innovation
(Hirschman and Holbrook 1982; Hirschman 1984; Pine and
Gilmore 1998; Van der Heijden 2004; Carù and Cova 2006),
we identify five dimensions of service consumption experi-
ence in the EME (see Fig. 1) as consisting of (1) service
Experience in EME
Service Emotion in Service Sensation in
EME EME
Fig. 1 Formative second order service consumption experience construct and underlying first-order dimensions
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emotion, (2) service sensation, (3) service immersion, (4) ser-
vice participation, and (5) service playfulness.
Service Emotion in the EME Laros and Steenkamp (2005)
identified two-side effects of consumer emotions. The nega-
tive effects include anger, fear, sadness, and shame, while the
positive effects are contentment, happiness, love, and pride.
Schmitt (1999) indicated that consumers are emotionally driv-
en because consumption experiences are directed to achieve
fantasies, feelings, and fun. Russell (1979) identified that the
consumer has two major dimensions of emotion:
pleasantness—unpleasantness and arousal-quietness.
Emotion has been considered as a very significant dimension
of the consumption experience. Previous studies have found
that consumer emotions could be evoked by marketing stim-
uli, product/service, advertisement, and brands (Schmitt
1999). In the EME, Dabholkar (1996) found a strong positive
effect of enjoyment of using self-service technology on per-
ceived overall service quality. For example, the consumer who
is buying and using the online entertainment service would
feel happy when consuming this service.
Service Sensation in EME Human beings apply all of their
perceptual senses when engaging with their immediate envi-
ronment. It was shown that the more effectively an experience
engages the senses, the more memorable it will be (Hirschman
1984). Hirschman gave the example of service sensation in a
physical environment, where consumers could seek sensory
simulation from both an internal and external nature like
watching a horror movie or ingestion of hallucinogenic drugs.
In an online environment, the reputation system provides re-
viewers who are also consumers in the EME a great platform
to share their sensation. With the advances in technology,
companies are providing real life experience and sensation
in the EME, such as the Second Life online virtual world.
Service
Consumption
Service
Service Immersion Service Playfulness
Participation in
in EME in EME
EME
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Service Immersion in EME Carù and Cova (2006) have indi-
cated that B…immersion concept literally implies becoming
one with the experience and therefore conveys the idea of a
total elimination of the distance between consumers and the
situation, the former being plunges in a thematised and
secure spatial enclave where they can let themselves go^
(pg. 127). Consumers’ immersion become physically or
virtually a part of experience itself. For example, when
consumers participate in the mobile game services they
are connected with a network and gaining real time
experience when playing against opponents on the other
side of the world. Pine and Gilmore (1999) emphasized that
five senses should be all engaged in consumers’ consump-
tion experience; the more senses an experience engages, the
more effective and memorable it can be.
Service Participation in EME This dimension demonstrates
the level of consumers’ participation in the spectrum
where on one end of the experience lies passive participa-
tion such as reading news and advertisement in the online
environment; on the other end the experiences are actively
gained which means that consumers personally affect the
performance or event that yields the experience. For ex-
ample, this could be searching on the internet for a specif-
ic service (Pine and Gilmore 1998, 1999). The online ed-
ucation service is a typical EME service to engage the
consumer in an active participation experience.
Service Playfulness in EME The service playfulness is defined
as the degree to which the consumer perceives the online
provider’s website to be enjoyable (Wulf et al. 2006).
Seiders et al. (2007) indicated that hedonic consumer’s view
buying a product/service as an enjoyable and rewarding
experience in the entire purchasing process. Novak et al.
(2000) developed a structural model and indicated that play-
fulness is an important dimension of online consumers’ expe-
rience. They further concluded, Bsuch experiential uses lead
individuals to see the Web as a more playful environment^
(Novak et al. 2000, pg.30). Previous literature did not differ-
entiate emotion from playfulness. In this research, the emotion
dimension relates to consumers’ valenced affective reaction to
perceptions of service in the EME, while the playfulness re-
flects intrinsic enjoyment that comes from engaging in activ-
ities in which consumers participate or immerse themselves
(Mathwick et al. 2001).
Past research points to service consumption experience as
being a multi-dimensional construct and some studies have
alluded to an emergent second order factor model to parsimo-
niously capture this important construct (Havlena and
Holbrook 1986; Schmitt 1999; Firat 1987; Pine and Gilmore
1998; Mathwick et al. 2001; Hirschman 1984). Following this
line of reasoning, this research proposes a second order factor
model for service consumption experience in the EME (see
Fig. 1) where the first-order factors such as service emotion,
service sensation, service immersion, service participation,
and service playfulness are all latent formative factors under-
lying service consumption experience. This allows us to mod-
el the five latent dimensions under a unitary representation. In
this conceptualization, it is assumed that these formative first
order factors ‘cause’ the second order factor (Chin 1998) -and
in our research it is the service consumption experience in the
EME construct. The formative second order model provides a
coherent and parsimonious representation of this multi-
dimensional phenomenon in explaining exchange relationship
development between consumers and service providers in the
EME (Pavlou et al. 2008). In our research, we conceptualize
that this second order service consumption experience con-
struct plays a mediating role in the context of exchange rela-
tionship development between the consumers and service
providers.
Each of the first order dimensions of Service Consumption
Experience is conceptualized as reflective. In our theoretical
consideration for each of these first order dimensions, each
construct is assumed to drive the symptoms or measures used
in measuring or assessing these constructs.
3 Research Framework and Hypotheses
3.1 Antecedents of Service Consumption Experience
Electronic service quality is a well-established concept in prior
service and MIS literature (Tan et al. 2013; Parasuraman et al.
2005; Lociacono et al. 2000; Fassnacht and Koese 2006;
Collier and Bienstock 2006). The service quality in the elec-
tronic mediated environment is defined as the extent to which
the electronic device facilitates efficient and effective consum-
er activities at service encounters (Parasuraman et al. 1985;
Zeithaml et al. 2000). On the basis of prior service quality
theories and electronic commerce studies, Tan et al. (2013)
claimed that conceptualization of service should include con-
siderations of both service content and delivery. With the
available technology in EME consumers can instantly find
price comparisons on the web at the click of a mouse, has
created considerable challenges for online service providers
in retaining their existing customers in comparison with the
traditional services provided by offline channels (Chea and
Luo 2008). Since, it is much easier to compare the technical
features and prices of products/services online in an EME than
through traditional channels, service quality becomes a key
factor for consumers in judging their service consumption
experience (Santos 2003). As online consumers can spend less
time and effort to exit a transactional relationship and switch
to an alternative service provider, the quality of e-services has
become even more critical (Jiang and Rosenbloom 2005). We
present our proposed research model in Fig. 2 below.

Fig. 2 Proposed research model
Accessbility
Service
Reliability H2 Delivery
Quality
Timeliness
Visual
Appearance
Service
Navigation Content
Quality
Flexibility
3.2 Determinants of Service Delivery Quality
Service delivery quality is defined as the manner in which
EME functionalities are made accessible to consumers via
the service provider’s website as a delivery channel (Tan
et al. 2007; 2013). EME service providers have realized that
consumers are concerned with the service delivery process
and outcome. Based on the literature (Turel et al. 2010; Cyr
et al. 2006), we highlight the following three antecedents of
service delivery quality: accessibility, reliability, and
timeliness.
3.2.1 Accessibility
Accessibility is related to the actions taken by the service
provider to ensure no service interruption. More and more
customers now look for company access and support via
EMEs (De Ruyter et al. 2001). Potential service failures im-
pact future business because they weaken the customer-
company bonds and perceptions of service quality (Bolton
and Drew 1991). In this research, accessibility is defined as
the level of efforts taken to minimize service disruptions.
Since it is generally not always easy to contact a ‘live person’
in a traditional service environment, EME providers have be-
gun to provide 24*7 customer support with instant messaging
to improve accessibility. Therefore we expect:
& Hypothesis 1: Accessibility of the service system is posi-
tively associated with EME service delivery quality.
3.2.2 Reliability
In offline contexts, reliability is defined as the Bability to per-
form the promised service dependably and accurately^
Parasuraman et al. 1988). Similarly, EME reliability is
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Value
Loyalty
Service
H11
Consumption
Experience
Word-of-mouth
Communication
Satisfaction
concerned with the delivery of the service in good condition,
on time, and exactly as it was displayed. A study of online
failures stated that consumers noted delivery issues as the
most frequently stated problem (Holloway and Beatty 2003).
Consumers place significant emphasis on service outcome
and service quality, which will suffer if a service provider fails
to deliver as expected (Zeithaml et al. 1996). Such failures can
result in significant costs to the firm, such as lost customers
and negative word of mouth (Bitner et al. 2000).
Consequently, service failure is a driving factor explaining
customer switching behaviour (McCollough et al. 2000).
Thus, based on these arguments we expect:
& Hypothesis 2: Reliability of the service system is positive-
ly associated with EME service delivery quality.
3.2.3 Timeliness
One of the significant EME benefits is the near-time or imme-
diate service delivery (Holloway and Beatty 2003). EMEs
lack most of the interactional human elements so vital to the
traditional service experience which typically lead to service
delivery lag times. In terms of online versus offline purchas-
ing, online purchasers’ benefit in the fact that they receive
timely information directly from the website without having
to seek a salesperson (Zeithaml et al. 2002). Szymanski and
Hise (2000) were one of the first to empirically test a concep-
tual model finding that convenience and timeliness of website
performance were primary determinants in consumer online
experiences. Access speed and performance appear as critical
to the assessment of quality in EMEs. As a result we expect:
& Hypothesis 3: Timeliness of the service system is positive-
ly associated with EME service delivery quality.
Inf Syst Front
3.3 Determinants of Service Content Quality
Service content quality is defined as the extent to which com-
plete, accurate, and timely content is provided to online con-
sumers during the interaction process with the user interface
in the EME (Tan et al. 2007; 2013) The user interface is a
critical component in the EME service experience. In the con-
text of the online environment, the store layout and design
particularly influences the consumer’s service consumption
experience (Seiders et al. 2000). To capture service content
quality we have identified the following three antecedents
based on the literature: visual appearance, navigation, and
preview. These antecedents have been found to be important
in the context of online services in past IS studies (Ozment and
Morash 1994).
3.3.1 Visual Appearance
A consumer’s perception of the visual appeal projected by the
service is driven by the design, physical attractiveness, and
beauty inherent to the service interface (Hirschman and
Holbrook 1982). Visual appearance in EMEs can be defined
as an overall output of image or personality generated from
website components such as text, style, graphics, colors, lo-
gos, themes and slogans (Srinivasan et al. 2002). Websites
with a more visually acceptable interface often result in greater
service quality and can influence a consumer’s EME experi-
ence and ultimately his or her long-term service provider re-
lationship (Cyr et al. 2006; Dai and Salam 2010).
Consequently, the interface appearance is one of the most
important aspects of the EME experience. The above argu-
ments lead to the following hypothesis:
& Hypothesis 4: The visual appearance of the service system
is positively associated with EME service content quality.
3.3.2 Navigation
Consumers want and demand websites that are simply de-
signed and easy to use (Novak et al. 2000). Ease of navigation
has surfaced as a critical element, since the EME lacks most of
the interactional human elements so vital in offline service
delivery (Holloway and Beatty 2003). Navigation challenges,
such as getting lost is often associated with a consumer’s
confusion, frustration, and anger, and thus negative experi-
ences. To negate this danger, EME navigation features have
been developed to prevent consumers from becoming lost
anger (Rosenfeld and Morville 2002). A considerable amount
of freely available information, if it is well organized and
easily accessed, is frequently mentioned by consumers as an
important reason to interact with an EME anger (Rosenfeld
and Morville 2002). The ease of navigation in the EME is
expected to enhance service content quality. As a result, we
expect:
& Hypothesis 5: The navigation of the service system is
positively associated with EME service content quality.
3.4 Flexibility
Flexibility has been considered as one of the important criteria
of perceived good service quality in traditional service mode
(Grönroos, 1998). In service context, it refers to Bthe degree of
flexibility in responding to the customer’s needs which was
beyond the routine service provided by the organization^
(Johnston, 1995, pg.61). EME provides consumers with more
options to choose the mode of service—traditional employee
service or self-service (Berry et al. 2002). Within the context
of EME, services are delivered via the web through a software
interface where customers engage in self-service and interact
with web content offered by service provider. Consumers have
more choices and methods to access and use services. Recent
studies on e-service quality all consider service content flexi-
bility as one of important dimensions of service quality
(Zeithaml et al. 2002; Parasuraman et al. 2005; Wixom and
Todd 2005; Buckley 2003). Based on these arguments we
expect:
& Hypothesis 6: The flexibility of online service is positively
associated with service content quality in the EME.
3.5 Service Delivery Quality and Service Consumption
Experience
Within the context of EMEs, services are delivered via the
web through a software interface where customers engage in
self-service and online service delivery. One example of an
EME service is the FedEx online package tracking system.
By utilizing an online tracking system, FedEx can respond to
customers’ needs very rapidly, without any human interven-
tion on Fed Ex’s part. The customers, who enter in all of the
information, do not mind, because they get the latest, accu-
rate, and authoritative information. FedEx saves money on
having to update and notify customers when packages will
arrive, while customers are much more satisfied. Therefore,
this choice should improve consumers’ entire service expe-
rience of using or buying services. Service delivery quality is
defined as the manner in which IT mediated service func-
tionalities are made accessible to the consumers via the ser-
vice providers’ website as a delivery channel. Service pro-
viders in the EME have realized that consumers are con-
cerned with the process of how the service is delivered along
with the outcome of the service (Katz 2001). BExperience, like

goods and services, have to meet a customer need; they have to
work; and they have to be deliverable^ (Pine and Gilmore
1998, pg.102). Thus, the service delivery quality will have
important influence on consumers’ consumption experience
in the EME and therefore, we propose following hypothesis:
& Hypothesis 7: Service delivery quality is positively asso-
ciated with service consumption experience in the EME.
3.6 Service Content Quality and Service Consumption
Experience
Applying content and delivery concepts in our study, we
define service content quality as the extent to which
complete, accurate, and timely content is provided to online
consumers during the interaction process with user interface in
the EME. Mathwick et al. (2001) have indicated that in online
environment, the use of color, graphic layout and photograph-
ic quality combine to influence a desirable consumption ex-
perience. Ethier et al. (2006) have demonstrated that web site
quality has positive impact on the cognitive appraisal includ-
ing liking, joy, pride, dislike, and frustration. We propose the
following hypothesis in relation to service content quality.
& Hypothesis 8: Service content quality is positively associ-
ated with service consumption experience in the EME.
3.7 Consequents of Service Consumption Experience
3.7.1 Service Consumption Experience, and Value,
Satisfaction, Loyalty, WOMC
Building strong customer relationships has been suggested as
a means for gaining a competitive advantage in both
marketing and IS literature. Dwyer et al. (1987) have indicated
that Bconsumer marketer benefit from attention to conditions
that foster relational bonds leading to reliable repeat
business^ (pg.12). Conditions conducive to developing rela-
tional bonds could be created that lead to customer retention
and growth (Dwyer et al. 1987; O’Malley and Tynan 2000;
Goldberg 1988). Today information technology and electronic
devices have largely improved the conditions for relationship
development between consumers and service providers in the
EME.
3.7.2 Perceived Value
Consumer perceived value consists of subjective hierarchical
preferences based on an individual’s situation-specific com-
parisons of one object with another. As one major component
of service evaluation, we believe that there is positive
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relationship between consumers’ perceived value and service
consumption experience. BSuch interactive relativistic prefer-
ences shape the essence of the consumption value in the sense
that products perform services that provide the relevant value-
creating experiences^ (Holbrook 2006, pg.715). Therefore,
following hypothesis has been proposed.
& Hypothesis 9: Service consumption experience will posi-
tively influence consumers’ perceived value of service in
the EME
3.7.3 Satisfaction
Oliver (1992) defines service satisfaction as consumer’s post-
purchase evaluation and effective response to overall con-
sumption experience. Researchers have identified that con-
sumers’ satisfaction is highly correlated with the overall con-
sumption experience, which would exert a positive influence
on consumers’ future purchase behavior (Oliver 1980). By
applying expectancy-disconfirmation theory, Phillips and
Baumgartner (2002) clarified the role of consumption emotion
in the satisfaction response and discovered that both positive
and negative emotions influence satisfaction. Thus, we pres-
ent the following hypothesis:
& Hypothesis 10: Service consumption experience positive-
ly influences consumers’ service satisfaction in the EME.
Hallowell (1996) indicated that consumer satisfaction is the
result of consumers’ perception of received value. Adapted
from Bagozzi (1992) research on appraisal and emotion
response, Lin and Wang (2006) suggest that more cognitively-
oriented value appraisal precedes affectively oriented satisfac-
tion. Therefore, we propose the following hypothesis:
& Hypothesis 11: Consumer perceived value is positively
associated with consumer service satisfaction of service
in the EME.
3.7.4 Loyalty
Perceived value and satisfaction involved in service evalua-
tions are believed to summarize consumer knowledge and
judgment with particular service providers and guide subse-
quent actions and loyalty of the consumer (Johnson et al.
2006). Prior literature has confirmed that perceived value
and satisfaction are important determinants of consumer loy-
alty in the online environment (Lin and Wang 2006; Gefen
2002). Accordingly, in order to develop long-term mutual re-
lationships, managers must make great efforts to improve ser-
vice consumption experience of their services in the electronic
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environment from the first encounter, from purchasing, to de-
livery and beyond, as this can influence the service retention
(customer loyalty) and service growth (word-of-mouth com-
munication) (Bolton et al. 2000). Thus, the following two
hypotheses are proposed:
& Hypothesis 14: Consumers’ perceived value positively in-
fluences their word-of-mouth communication in the EME.
& Hypothesis 15: Consumers’ satisfaction positively influ-
ences their word-of-mouth communication in the EME

& Hypothesis 12: Consumers’ perceived value positively in-

fluences their loyalty in the EME. 4 Research Method
& Hypothesis 13: Consumers’ satisfaction positively influ-
ences their loyalty in the EME. 4.1 Measurement Development

This study uses quantitative methodology in assessing the

3.7.5 Word-Of-Mouth Communication
Word-of-mouth communication has been recognized as an
essential ingredient for successful long-term relationships
and growth, and points to the value of existing customers
who spread good words about the company and its products
and services. (Anderson 1998; Richins 1983). Word-of-mouth
communication has been found to be an important outcome of
the exchange relationship between service providers and con-
sumers (Richins 1983; Srinivasan et al. 2002; Walker 2001).
Loyal consumers more frequently refer new consumers to
service providers. In the online environment, Bword-of-
mouse^ spreads even faster than Bword-of-mouth^ since on-
line customers can, for example, use e-mail to broadcast a
recommendation for a favorite service provider to dozens of
friends and family members (Reichheld and Schefter 2000). In
this study, we have included word-of-mouth communication
as an outcome of the relational exchange between the con-
sumers and service providers.
proposed comprehensive research model (Fig. 2). The devel-
opment of the survey instrument followed Moore and
Benbasat (1991) and Straub (1989). Most of the measurement
items for the principal constructs were adapted from the
existing literature and modified to fit the context of this re-
search (see Table 2).
The service content quality and service delivery quality
measures were adapted from the Tan et al. (2007) study.
Minor modifications have been made to fit our research context.
The measurement of relational exchange constructs are gener-
ated from existing marketing and information systems literature
to capture consumers’ evaluation of service (perceived value
and commitment) (Lin and Wang 2006; Oliver 1999; Oliver
1992; Garbarino and Johnson 1999) and their orientations for
a long-term relationship development (loyalty and word-of-
mouth communication) (Gefen 2002; Anderson 1998; Richins
1983). All items were measured using a five-point Likert-type
scale (1 = BStrongly disagree^ to 5 = BStrongly agree^).
4.2 Data Collection and Analysis

Table 1 Sample Characteristics (N = 772). All measurements followed a refinement procedure with sev-
Measure. Value Frequency Percentage eral pretests and pilot test. We first interviewed 27 business
school students to get their understandings of service and ser-
Gender Male 221 28.6% vice consumption experience in the EME. The subjects were
Female 551 71.4% also asked to provide a list of five services they used most
Age 18–25 587 76.0% frequently in the EME for at least six months. This step helped
26–35 121 15.7% us to capture consumers’ comprehension and assessment of
36–55 59 7.7% long term service consumption in the EME. Further, the re-
>55 5 0.6% sults for this procedure are incorporated in our survey devel-
Education High school 64 8.3% opment in which the respondents were asked to identify one
Some college 489 63.3% online service provider they used most frequently for at least
Bachelor 137 17.7% six months. Based on their experiences of using such a service
Master 76 9.8% from this specific service provider, the subjects are asked to
Ph.D. 6 0.7% indicate their perceptions of each item provided in the survey.
Income Level <$12,000 526 68.2% The services included, for example, electronic banking, mort-
$12,000--$36,000 167 21.6% gage provider service, online music buying service, and online
$36,000--$60,000 34 4.4% car insurance provider service. We found no statistical differ-
$60,000--$96,000 15 1.9% ence between these different types of services (Pavlou and
>$96,000 30 3.9% Fygenson 2006). The survey instrument was then evaluated
by two business school professors (experts in IS research

related to ecommerce and e-services) and three IS PhD stu-
dents. The aim of this pre-test was to examine the feasibility of
the instrument and gain qualitative feedback from the respon-
dents. Based on the recommendations received from these five
IS researchers, the instrument was refined for wordings to
clarify and simplify the measurement items in the instrument.
A larger scale pilot study was conducted using 90 business
school students on the refined instrument. SmartPLS 3 (Ringle
et al. 2015) software was used to test reliability of this instru-
ment. Reliability was assessed by using PLS internal consis-
tency score (Werts et al. 1974; Straub 1989; Moore and
Benbasat 1991; Chin et al. 2003). Typically, 0.70 is consid-
ered as the threshold of internal consistencies for all variables
(Nunnally and Bernstein 1994; Pavlou and Fygenson 2006).
We removed the item if they failed in the reliability test thresh-
old and highly cross-loaded on other constructs. Respondents
were asked to make notes on the surveys of items that were
unclear. Based on this feedback, changes were made to im-
prove the layout of the survey form and the phrasing of some
survey questions. The survey was distributed online and par-
ticipants were asked to identify one EME service they used
over the last six months and report on their experiences. The
major types of services reported electronic banking services,
online purchases, online music buying services, online mort-
gage service, etc. We found no statistical differences among
these different types of services through an ANOVA test of all
principle constructs. Respondents were assured that all results
would be disseminated in aggregate form to guarantee ano-
nymity and confidentiality as per approved IRB guidelines for
this research. To motivate individuals to respond, the re-
searchers offered several incentives in the form of a single
iPod gift to be drawn among all online survey participants,
along with a summary report. A total of 788 responses were
collected, with 14 incomplete questionnaires dropped due to
inadequate information yielding a total of 772 valid responses.
Table 1 presents the details of descriptive statistics of respon-
dents’ characteristics.
As suggested by Pavlou and Fygenson (2006) nonresponse
bias was assessed with two sets of tests. In the first set of tests,
the results showed no significant differences across different
demographic groups in comparing gender, age, education, and
income level. In the second set of tests, principal constructs
were tested across different demographic groups and student
sample vs. non-student sample. The results from both sets of
tests showed no significant differences between group means
(P < 0.01).
4.2.1 Descriptive Statistics
The entire instrument along with factor loadings, AVE and
composite reliability is presented in Table 2 below. This table
also includes first order reflective dimensions of the second
order formative service consumption experience construct. In
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Table 3 below, we present inter-construct correlation matrix
and in Table 4 below we present composite reliability and
square root of average variance extracted (discriminant valid-
ity). Square root of AVE for each construct is higher than the
inter-construct correlation (see Tables 3 and 4) providing ev-
idence of discriminant validity (Fornell and Larcker, 1981).
Typically, 0.70 is considered as acceptable threshold of inter-
nal consistencies for all variables (Nunnally and Bernstein
1994; Pavlou and Fygenson 2006). All constructs have high
reliability (Cronbach’s alpha > 0.8, AVE > 0.7) in our study.
Thus, the measurements fulfill the requirements of convergent
and discriminant validities.
To verify discriminant validity, Chin et al. (2003) identified
two general rules B1) Loadings are much higher on their hy-
pothesized factor than on other factors (own-loadings are
higher than cross-loadings), and 2) when the square root of
each construct’s AVE is larger than its correlations with other
constructs^ (Pavlou and Fygenson 2006, pg.129; Chin et al.
2003). As shown in Tables 2, 3 and 4, the square roots of all
AVEs are above 0.7 which are much larger than all the cross-
correlations. In addition, all items loaded well on their respec-
tive factors (Table 5) compared to the cross-loadings on other
construct. Above tests demonstrated that all measures in this
study have adequate convergent and discriminant validity.
Non-response bias was assessed by investigating that the
early and late respondents as well as respondents that did not
fully complete the survey did not differ in their demographic
characteristics and their responses on principal constructs.
Following Pavlou and Gefen (2005), early respondents were
identified by selecting those that responded in the first two
weeks. The t-tests between the means of the two groups did
not show significant differences (p < 0.1 level).
4.2.2 Testing Potential Common Method Bias
To overcome the concern for common method bias in the
survey design, we first included several reverse-scored items
in the principal constructs to reduce acquiescence problem
(Lindell and Whitney 2001). We then used Harman’s one-
factor test to assess common method variance after data col-
lection was complete. This test requires that all of the principal
constructs be entered into a principal components factor anal-
ysis. Common method bias thought to exist when a single
factor emerges from the analysis or when one general factor
accounts for the majority of the covariance in the
interdependent and dependent variables. In our analysis, we
found each principal construct explaining approximately
equal variance. The data seems not to indicate substantial
common method bias. Additionally, we ran a modified test
of Lindell and Whitney (2001) in which a conceptually unre-
lated variable, usually termed a marker variable, is ex ante
measured in the survey instrument. This marker variable is
innovation in our study. Any significant correlation among
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Table 2 Factor Loadings for the Measurement Items and Reliability, AVE for Principal Constructs

Items Used For Principal Constructs Mean Std. Deviation Loading (Refined)

Accessibility (Composite Reliability = 0.95; AVE = 0.95; Wixom and Todd, 2005)
This Service provider’s website allows information to be readily accessible to me. 4.26 0.92 0.95
This Service provider’s website makes information very accessible. 4.21 0.93 0.96
This Service provider’s website makes information easy to access. 4.21 0.93 0.95
Reliability (Composite Reliability = 0.96; AVE = 0.95; Wixom and Todd, 2005)
This service provider’s website operates reliably. 4.25 0.92 0.96
This service provider’s website performs reliably. 4.23 0.92 0.97
The operation of this service provider’s website is dependable. 4.22 0.92 0.94
Timeliness (Composite Reliability = 0.87; AVE = 0.94; Wixom and Todd, 2005)
It takes too long for this service provider to respond to my request. 2.64 1.32 (Deleted)
This service provider provides service in a timely fashion. 4.03 0.90 0.94
This service provider returns answer to my questions quickly. 3.82 0.90 0.93
Visual Appearance (Composite Reliability = 0.94, AVE = 0.89; Fassnacht and Koese 2006; Collier and Bienstock 2006)
This service provider’s website is visually pleasing 4.07 0.95 0.90
The lay-out of this service provider’s website is attractive 4.00 0.93 0.92
The colours that are used on this service provider’s website are attractive 3.91 0.96 0.88
Everything is clearly arranged in this service provider’s website 4.06 0.98 0.82
Overall, I find this service provider’s website to be attractive 4.00 0.92 0.93
Navigation (Composite Reliability = 0.89, AVE = 0.87; Novak et al. 2000, Marketing Science; Skadberg and Kimmel, 2004)
I felt that I had the freedom to go anywhere in this service provider’s website 4.02 0.99 0.81
I felt interacting with this service provider’s website was easy 4.14 0.93 0.88
When I use this service provider’s website, 4.06 1.00 0.89
there is very little waiting time between my actions and the computer’s response.
Pages on this service provider’s website that I visit usually load quickly 4.10 0.96 0.88
Content Flexibility (Composite Reliability = 0.89; AVE = 0.91; Wixom and Todd, 2005)
This Service provider’s website can be adapted to meet a variety of needs. 3.88 1.00 0.90
This Service provider’s website can flexibly adjust to new demands of conditions 3.80 1.00 0.92
This Service provider’s website is versatile in addressing needs as they arise 3.78 1.02 0.90
Service Content Quality (Composite Reliability = 0.94; AVE = 0.94; Tan et al. 2013; Fassnacht and Koese 2006)
Generally, the service content offered on this ESP’s website to support me in performing my transactions 4.03 0.94 0.94
is satisfactory.
On the whole, the service content offered on this ESP’s website is highly effective in supporting me to 4.03 0.96 0.96
perform my transactions.
Generally, I am pleased with the service content offered on this ESP’s website to support me in 4.06 0.93 0.94
performing transactions
Service Delivery Quality (Composite Reliability = 0.94, AVE = 0.95; Tan et al., 2013; Fassnacht and Koese 2006)
The general technological mechanisms underlying various service functionalities of this ESP website are 4.00 0.92 0.93
satisfactory.
Generally, the service functionalities are delivered in a professional manner in this ESP’s website 4.08 0.91 0.95
Overall, the service functionalities are delivered efficiently via this ESP’s website 4.06 0.92 0.94
First Order Reflective Dimensions of Service Consumption Exp
Items Used For Principal Constructs Mean Std. Deviation Loading (Refined)
Service Emotion in EME (Reliability = 0.91)
Using the service is exciting 3.50 1.12 0.86
The process of using this service was pleasant 3.92 0.96 0.78
This service makes me happy 3.72 1.06 0.86
I have fun in using this service 3.54 1.11 0.89
I found using this service to be enjoyable 3.72 1.06 0.89
Service Immersion in EME (Reliability = 0.95)
I forget about my immediate surroundings when I use this service 2.87 1.24 0.84
Using this service often makes me forget where I am 2.58 1.31 0.90
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Table 2 (continued)

Items Used For Principal Constructs Mean Std. Deviation Loading (Refined)

After using this service, I feel like I come back to the Breal world^ 2.69 1.31 0.90
When I use this service, I feel I am in a world created by the Service provider’s site I visited 2.68 1.32 0.92
When I use this service, my body in the room, 2.59 1.33 0.92
but my mind is inside the world created by the websites visit
When I use this service, the world generated by the sites I visit is more real for me than the Breal world^ 2.43 1.33 0.87
Service Sensation in EME (Reliability = 0.81)
This service provider provide picture that allow me to view a product/service from multiple angles 3.10 1.20 0.78
(i.e. front view, side view, rear view)
This service provider makes it possible for me to contact someone who has already bought/used this 3.11 1.19 0.84
product/service to obtain a testimonial
This service provider has the website that makes you feel like you are part of community 3.36 1.14 0.82
This service provider provides online chat function for potential customer-salesperson interaction. 3.11 1.20 0.73
Service Participation in EME (Reliability = 0.84)
I actively search information from this service provider 3.41 1.16 0.90
I actively purchase the service from this service provider 3.43 1.11 0.92
I go to this service provider’s website directly to search information 3.58 1.14 0.92
I go to this service provider’s website directly to purchase service 3.49 1.15 0.88
Service Playfulness in EME (Reliability = 0.92)
I feel creative when I use this service provider’s website 3.08 1.15 0.81
I feel playful when I use this service provider’s website 3.33 1.20 0.73
I feel unimaginative when I use this service provider’s website(R) 3.23 1.11 0.05
I found that this service provider’s website motivates customers to feel participation 3.58 0.99 0.70
I found that this service provider’s website is fun 3.36 1.15 0.90
I found this service provider’s website is entertaining 3.35 1.20 0.87
Perceived Value (Composite Reliability = 0.93, AVE = 0.88; Lin and Wang 2006; Oliver, 1999)
The prices I pay for service from this online ESP represent a very good deal. 3.69 1.01 0.76
The time I spend in order to use this service from this ESP’s site is highly reasonable. 3.92 0.97 0.87
The effort involved in using this service at this ESP’s site is worthwhile. 3.99 0.94 0.90
The service consumption experience at this ESP’s site is excellent. 3.88 0.95 0.88
I found significant value by using service from this provider. 3.95 0.96 0.86
Satisfaction (Composite Reliability = 0.92, AVE = 0.96,
Overall, I am satisfied with this ESP 3.99 0.99 0.93
I did the right thing when I decided to use this ESP 3.90 0.99 0.91
I regret doing business with this ESP (R). 2.78 1.48 Dropped
Loyalty (Composite Reliability = 1.00, AVE = 1.00; Gefen 2002)
I have a strong relationship with this online vendor. 2.61 1.36 Deleted
I will choose this ESP next time when I purchase same service. 3.76 0.99 1.00
Word-of-Mouth Communication (Composite Reliability = 0.89, AVE = 0.91; Anderson 1998; Richins 1983)
I often recommend this ESP to others. 3.70 1.11 0.92
I tell my friends about this ESP. 3.64 1.11 0.93
I want my friends to buy from this ESP. 3.49 1.05 0.88

any of the service convenience items and any of the innova-
tion items could provide indication of common method bias
since the two constructs are theoretically unrelated and there-
fore their correlations should approximate zero. In our analy-
sis, we found the average correlation among these items to be
r = 0.012 with average p value of 0.48. Thus, there is no evi-
dence of common method bias. Given the different preceding
tests did not indicate common method bias, it seems that com-
mon method bias is not a problem in this study.
4.2.3 Measurement Validation
This study presents measurement validations following Straub
(1989), Doll and Torkzadeh (1988), and Nunnaly (1978;
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Table 3 Inter-construct correlation matrix for principal construct

1 2 3 4 5 6 7 8 9 10 11 12 13

1. ACCESSIBILITY 1.00
2. RELIABILITY 0.78 1.00
3. TIMELINESS 0.71 0.70 1.00
4. VISUAL APPEARANCE 0.68 0.66 0.64 1.00
5. NAVIGATION 0.77 0.76 0.70 0.75 1.00
6.CONTENT FELXIBILITY 0.62 0.58 0.62 0.63 0.62 1.00
7. CONTENT QUALITY 0.79 0.78 0.76 0.71 0.76 0.61 1.00
8. DELIVERY QUALITY 0.79 0.78 0.77 0.68 0.75 0.61 0.76 1.00
9. VALUE 0.69 0.65 0.66 0.68 0.70 0.58 0.72 0.71 0.68 1.00
10.SATISFACTION 0.74 0.70 0.66 0.68 0.70 0.55 0.78 0.75 0.56 0.82 1.00
11.LOYALTY 0.53 0.51 0.55 0.54 0.51 0.51 0.55 0.56 0.58 0.61 0.58 1.00
12.WORD-OF-MOUTH 0.47 0.44 0.50 0.55 0.53 0.52 0.52 0.51 0.72 0.61 0.55 0.58 1.00

Nunnally and Bernstein, 1994). Initial reliability of the scale
was assessed first using composite reliability. To ensure that
items measured their respective constructs, construct validity
of each item was then tested following Doll and Torkzadeh
(1988). In this step, inter-construct correlation and conducted
exploratory factor analysis was performed to assure scale
items loaded to a common factor. Additionally, the cross-
loading items were discovered and removed. After that, con-
vergent and discriminant validity of the scale was evaluated
according to Nunnaly and Bernstein (1994), Chin et al.
(2003), and Pavlou and Fygenson (2006). Finally, reliabilities
of the modified scales were examined again using a composite
reliability test.
General rules have been provided by prior IS research to
establish convergent validity and discriminant validity.
Convergent validity was assessed by using the PLS internal
consistency score. Prior studies have indicated that internal
consistency for the constructs is further validated through
composite reliability and Average Variance Extracted (AVE)
(Fornell and Larcker 1981; Tan et al., 2013). Typically, 0.70 is
considered as the threshold of internal consistency for all var-
iables (Nunnally and Bernstein 1994; Pavlou and Fygenson
2006). After Refinement of the survey instrument utilized in
pilot study, all constructs had high reliability (> = 0.87) in our
sample. Thus, the measurements fulfill the requirement of
convergent validity.
4.2.4 Validation of Formative Second-Order Construct –
Service Consumption Experience
To estimate the formative second-order construct Service
Consumption Experience in the EME, we modeled the coef-
ficients (γi) of each first-order factor to the latent second-order
factor following Chin (1998), Chin et al., (2003),
Diamantopoulos et al. (2008), and Pavlou and El Sawy
(2006). The second-order formative construct of service con-
sumption experience was formed by calculating the weights of
the first-order constructs to the second-order construct

Table 4 Composite reliability and square root of average variance extracted for principal constructs

Composite Reliability SQUARE ROOT OF AVE

1. ACCESSIBILITY 0.95 0.95

2. RELIABILITY 0.96 0.95
3. TIMELINESS 0.87 0.94
4. VISUAL APPEARANCE 0.94 0.89
5. NAVIGATION 0.89 0.87
6. CONTENT FLEXIBILITY 0.89 0.91
7. CONTENT QUALITY 0.94 0.94
8. DELIVERY QUALITY 0.94 0.95
9. VALUE 0.93 0.88
10. SATISFACTION 0.92 0.96
11. LOYALTY 1.00 1.00
12.WORD-OF-MOUTH COMMUNICATION 0.89 0.91
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Table 5 Factor Loadings for the Measurement Model

Items Used For Principal Construct Factor Loading Items Used For Principal Construct Factor Loading

ACCESSIBILITY SERVICE DELIVERY QUALITY

Access 1 0.95(***) DeliQual1 0.93(***)
Access 2 0.96(***) DeliQual2 0.95(***)
Access 3 0.95 (***) DeliQual3 0.94(***)
RELIABILITY SERVICE CONTENT QUALITY
Reliab1 0.96(***) ConQual1 0.94(***)
Reliab2 0.97(***) ConQual2 0.96(***)
Reliab3 0.94(***) ConQual3 0.94(***)
TIMELINESS Value
Timeli1 Deleted Value1 Deleted
Timeli2 0.94(***) Value2 0.89(***)
Timeli3 0.93(***) Value3 0.93(***)
Value4 0.91(***)
Value5 0.88(***)
VISUAL APPEARANCE SATISFACTION
VisApp1 0.90(***) Satisfaction1 0.96(***)
VisApp2 0.92(***) Satisfaction2 0.96(***)
VisApp3 0.88(***)
VisApp4 0.82(***)
VisApp5 0.93(***)
NAVIGATION LOYALTY
Navig1 0.81(***) Loyalty2 1.00(***)
Navig2 0.88(***)
Navig3 0.89(***)
Navig4 0.88(***)
CONTENT FELXIBILITY WORD-OF-MOUTH
Felxibility1 0.90(***) WOM1 0.92(***)
Felxibility2 0.92(***) WOM2 0.93(***)
Felxibility3 0.90(***) WOM3 0.87(***)

(Edwards 2001; Pavlou and El Sawy 2006) using a principal
components factor analysis (Diamantopoulos and Winklhofer
2001; Diamantopoulos et al. 2008). As shown in the Fig. 3
below, the impact of all first-order constructs, representing the
various dimensions of service consumption experience in the
EME, is significant (p < 0.01). We examined the correlations
among the first-order factors and they were all significant (p <
0.01). Significant correlations among the first-order constructs
suggest that the first-order constructs may belong to the same
set, even though formative constructs need not be correlated
(Chin 1998). We also tested whether the second order construct
fully mediates the impact of the first-order constructs. This step
ensures that the second-order construct is a more parsimonious
representation of the first-order constructs and is able to fully
capture their predictive power on dependent variables (Chin
1998). In short, these tests support the proposed second-order

Fig. 3 Formative Relationships between First-Order Constructs and Second-Order Formative Construct of Service Consumption Experience in the EME
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formative model of Service Consumption Experience and ver-
ify its construct validity with five underlying dimensions (see
Fig. 3).
4.3 Testing the Structural Model
4.3.1 Antecedents of Service Consumption Experience
PLS path coefficients are shown in Fig. 4. Item loadings of
each construct are omitted for a clear exposition. The accessi-
bility results demonstrate a strong influence on service deliv-
ery quality in EME (β = 0.28, p < 0.001). Reliability is also
positively associated with service delivery quality (β = 0.28,
p < 0.001). There is also strong statistical support for the rela-
tionship between timeliness and service delivery quality (β =
0.40, p < 0.001). Accessibility, reliability, and timeliness are
able to explain 76.1% variances of service delivery quality.
Thus, H1, H2, and H3 are supported.
The results of the PLS structural model test reflect a signif-
icant positive association between visual appearance and ser-
vice content quality in EME (β = 0.25, p < 0.001); navigation
is also positively associated with service content quality (β
=0.47, p < 0.001); Content Flexibility is moderately supported
in terms of its relationship with service content quality (β
=0.16, p < 0.1). These results provide support for H4, H5,
and H6. Three antecedents of service content quality are able
to explain 63.4% variances of service content quality.
As depicted by the PLS structural model testing results of
(Fig. 4), service delivery quality has positive influence on
service consumption experience in the EME (β = 0.23,
p < 0.001). Service content quality also demonstrate strong
impacts on consumer service consumption experience (β
=0.346, p < 0.001). These results provide the support for
H7and H8 respectively. Both service delivery quality and ser-
vice content quality are able to explain 31% variance of ser-
vice consumption experience.
4.3.2 Consequents of Service Consumption Experience
In the consequent part of the research model, service con-
sumption experience shows strong impacts on consumer
Perceived Value (β = .0.68, p < 0.001). Service Consumption
Experience does not have direct impact on consumer’s
Satisfaction in the EME (β =0.02, p > 0.1), but has very strong
indirect impact on Satisfaction, which is mediated by
Perceived Value. There is strong association between
Perceived Value and consumer’s Satisfaction (β = 0.80,
P < 0.001). This second order formative construct of Service
Consumption Experience is able to explain 45.9% variance of
consumer perceived value of service in the EME and 66.5%
variance of satisfaction of service in the EME. Therefore, the
hypothesis 9 and hypothesis 11 are supported.
All hypotheses in relational exchange are supported except
the relationship between satisfaction and word of mouth com-
munication (β = .16, p > 0.01). The perceived value has sig-
nificant impacts on Loyalty (β =0.45, p < 0.001) and Word-of-
Mouth Communication (β = 0.48, p < 0.01). Satisfaction
showed moderate impact on loyalty (β = .20, p < 0.05). The
research model is able to explain 38.4% of Loyalty and 38.2%
variance of Word-of-Mouth Communication respectively.
These results support hypothesis: H12, H13, H14, but not
H15. The summary of hypotheses tests are displayed in
Tables 6 and 7.
5 Discussion and Implication
It is well accepted that we live in a service economy increas-
ingly driven by information technology. Most, if not all, ser-
vices and corresponding service consumptions can be en-
hanced and made economically beneficial, for both the con-
sumers and service providers, through the application and use
of IT. In this context, our study introduces conceptualization

Fig. 4 PLS Results for the

Accessbility
Structural Model. *** Significant 0.
28
at p < 0.01, ** Significant at *
**
p < 0.05 *Significant at p < 0.1 Service Delivery Value
Reliability 0.28*** Quality 0.45*
R²=45.9% ** Loyalty
** R²=76.1%
0*
*

R²=38.4%
0.2

8**

0.4
3**

0.6

Timeliness Formative Service

0.4
*

0.80***

8*

Consumption
**
0**

Experience
0.2

R²=31.0%
0.02

Word-of-mouth
***

Visual Communication
0.35

Appearance 0. 6* R²=38.2%
25 Satisfaction 0.1
**
* Service Content R²=66.5%
Navigation 0.47***
Quality
* * R²=63.4%
6*
Content 0.1
Flexbility
 Inf Syst Front

Table 6 Summary of Hypotheses Tests and Results (Antecedents)

Hypothesis Path Descriptions Hypothesized direction Path coefficients T-statistic Support

H1 Accessibility→Service Delivery Quality (+) 0.28 3.87 Yes

H2 Reliability→Service Delivery Quality (+) 0.28 4.27 Yes
H3 Timeliness→Service Delivery Quality (+) 0.40 6.18 Yes
H4 Visual Appearance→Service Content Quality (+) 0.25 4.09 Yes
H5 Navigation→Service Content Quality (+) 0.47 7.80 Yes
H6 Content Flexibility→Service Content Quality (+) 0.16 2.63 Yes
H7 Service Delivery Quality → Service Consumption Experience in EME (+) 0.23 2.87 Yes
H8 Service Content Quality → Service Consumption Experience in EME (+) 0.35 4.21 Yes

of service consumption experience construct in the Electronic
Mediated Environment in the context of long term exchange
relationship. We also present validated instrument for future
research. We have presented both convergent and discriminant
validities to facilitate evaluation of the latent structure of the
service consumption experience as a second order factor as
well as the overall nomological net as suggested by Chin
(1998). Five first order formative dimensions of the service
consumption experience have been identified and validated:
Service Emotion in the EME, Service Immersion in the EME,
Service Sensation in the EME, Service Participation in the
EME, and Service Playfulness in the EME. The results reflect
that all five service consumption dimensions contribute al-
most equally to consumers’ overall service consumption ex-
perience. Therefore, service providers must design and wrap
above five experience dimensions around their service offer-
ings in the EME.
Additionally, this research identified several major ante-
cedents and consequences of service consumption experi-
ence in the EME. The analytical framework demonstrated
strong explanatory power of service consumption experience
and relational exchange in the EME. Service content quality
and service delivery quality show significant influence on
consumption experience in the EME. Our research contrib-
utes to the literature with new knowledge by providing a
comprehensive framework of service quality and its anteced-
ents, service consumption experience, and relational ex-
change constructs, which has not been studied in existing
IS and marketing literature (Parboteeah et al. 2009; Vila
and Kuster 2011; Turel et al. 2010; Chang and Chen 2010;
Kim and Son 2009.)
The growing utilization of technology in the EME presents
opportunities for service providers to retain current consumers
and attract potential consumers by improving quality of the
services provided in the EME. The service providers must
focus on the service consumption experience of the consumers
and begin to tap into the underlying dimensions to create even
more compelling value propositions. Literature demonstrated
that poor content quality and delivery quality of service result
highest level of complaint from consumers (Meuter et al.
2000). Therefore, service providers must avoid service deliv-
ery complexities to minimize the negative feeling of using
technology in the EME and provide more comfortable
options to consumers in the EME. Cyr et al. (2006) indicated
that aesthetics of interface must be a critical part for designing
an overall enjoyable user experience. Hence, service content
quality in EME shows great influence on consumer consump-
tion experience.
This study demonstrated that service consumption experi-
ence is able to explain respectively 45.9% and 66.5% of the
variance of perceived value and satisfaction of service in the
EME. This finding reflects the importance of consumption
experience in developing long term exchange relationship be-
tween consumers and service providers in the EME. In addi-
tion, our analyses demonstrates that perceived value and sat-
isfaction accounts for respectively 38.4% and 38.2% of the

Table 7 Summary of Hypotheses Tests and Results (Consequents)

Hypothesis Path Descriptions Hypothesized direction Path coefficients T-statistic Support

H9 Service Consumption experience in the EME → Perceived value (+) 0.68 20.76 Yes
H10 Service consumption experience in the EME → Satisfaction (+) 0.02 0.37 No
H11 Perceived value→Satisfaction (+) 0.80 15.94 Yes
H12 Perceived value→loyalty (+) 0.45 4.88 Yes
H13 Satisfaction→loyalty (+) 0.20 1.99 Yes
H14 Perceived value→word-of-mouth communication (+) 0.48 5.62 Yes
H15 Satisfaction→word-of-mouth communication (+) 0.16 1.86 No
Inf Syst Front
variance of loyalty and word of mouth communication related
to services in the EME. This result further confirms that we
were able to properly conceptualize service consumption ex-
perience as a second order formative factor, with five forma-
tive dimensions, that mediated between the antecedents and
consequents in the context of exchange relationship.
To develop an experiential strategy for consumption in the
EME, managers must proactively design, engineer, organize,
stage, and engage the wonderful and memorable consumption
experience into the services in the EME (Pine and Gilmore
1998, 1999; Dube and Menon 2000). The service providers
must recognize the significance and necessity of each con-
sumption experience dimension in developing consumer-
provider relationship and wrapping consumption experience
into service offering in the EME. To improve service emotion
in the EME, Dube and Menon (2000) suggest that service
providers need to be trained to recognize various emotion
expressions that consumers may show at the various in-
process episodes. In addition, the service providers may create
the desired impressions and introduce the positive cues that
are able to aid in the creation of positive and enjoyable emo-
tions (Pine and Gilmore 1998). Service immersion can be
enhanced by the careful management of the environmental
design and the spectacular thematisation in the EME (Carù
and Cova 2006). Furthermore, to stage an experience by
envisioning a well-defined theme, the service providers are
required to provide sustainable support to the consumer
throughout the immersion process in the EME. To enhance
service sensation, the service providers are encouraged to en-
gage all five senses in their services in the EME. The advanced
multimedia technology facilitates the sensation engagement
process and the virtual communities provide effective plat-
forms for both consumers and service providers to share the
sensible experience. To encourage active service participation,
service providers must mix the memorabilia into their offer-
ings since the consumer would recall the unique and memo-
rable experience when they are seeking services in the EME.
The service playfulness could be realized by developing the
device and service interfaces that are visually attractive, con-
vivial for navigation, rich in information and content, and
flawless and impeccable (Éthier et al. 2006).
6 Conclusion and Future Research Direction
The results presented in this study are useful in understanding
service consumption experience and its role in developing
long-term exchange relationship between consumers and ser-
vice providers in EME. There are some limitations that need to
be noted. The validity of our results strongly depends on the
sample of respondents. Further studies can be enhanced in the
future by including more demographic variables to see if there
is clear segmentation in terms of the consumer’s perception of
service consumption experience and relational exchange.
Several items did not perform well in the measurement vali-
dation process causing low loadings on some intended factors.
Although the study was able to provide a relatively good fit for
the measurement and structural models, the effect of these
dropped items during measurement model validation must
be considered in future research.
There could be other factors that contribute to consumers’
perception of service consumption experience in the EME; for
example, service enjoyment, competitive intensity, product
category involvement, number of recent interactions, and
product return experience are proposed as significant determi-
nants of service consumption experience in marketing litera-
ture (Seiders et al. 2007). Therefore, future research direction
is to replicate the theoretical framework to extend our finding
in this research using other constructs as identified above. The
central purpose of our study was to present a conceptualiza-
tion of formative service consumption experience construct
along with service quality and exchange relationship in the
EME in order to stimulate further IS research to better under-
stand how services are being consumed and in the process
how long term exchange relationship can be developed. This
area of IS research is very critical due to the increasing number
of services being offered in the EME and that businesses are
making significant investment in this area to create more com-
pelling value for the benefit of the consumers. We hope that
further research will be carried out in the future by IS scholars
to better understand the intricate nomological net that we pre-
sented along with related constructs.
Publisher’s Note Springer Nature remains neutral with regard to jurisdic-
tional claims in published maps and institutional affiliations.
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Hua Dai is an Associate Professor of Information Systems in Martin V.
Smith School of Business and Economics, California State University
Channel Islands. She received her Ph.D. in Information Systems from
the University of North Carolina at Greensboro. Her research interests
include service in electronic mediated environment, social media,
electronic/social commerce, health care information systems, telecommu-
nication policies and standards, privacy and security, and cross-cultural
research. Her research has been published or accepted for presentation in
Decision Support Systems, Information and Management, The DATA
BASE for Advances in Information Systems, Electronic Markets,
Journal of Computer Information Systems, International Journal of
Mobile Communications, Telecommunication Policy, International
Journal of Electronic Business, International Conference on Information
Systems (ICIS), and other international journals and conferences.
Dr. A. F. Salam is an Associate Professor in the ISSCM Department in the
Bryan School of Business andEconomics at UNC Greensboro. His re-
search has appeared in Information Systems Research, Information &
Management, Information Systems Journal, CACM among others.
Currently his research interestsinclude Machine Learning and Text
Analytics in qualitative research, Voice Commerce, Service
Engagement, etc.