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The Importance of the Service and Shopping Customer Experience in a Retail Environment (adsbygoogle = window.adsbygoogle || []).push({}); ABSTRACT  The importance of the service and shopping experience has been gaining momentum in the service industry, with customers and their satisfaction with their experience being perceived as critical factors in service management. Despite researchers acknowledging the need to examine the service experience through the lens of the customer, there is still much to understand of antecedents and outcomes of service and shopping experiences. This article investigates: (1) the importance of “the customer-employee relationship” on the service and shopping experiences for different age and gender groups; and (2) the effect of the service and shopping experiences on customer satisfaction, loyalty, and intention to recommend. In Study 1, these relationships will be analyzed for experiences of the participants themselves. In Study 2, we asked the participants to evaluate a hypothetical controlled scenario of a certain service and shopping experience with a certain customer-employee relationship, and measure customer satisfaction, loyalty, and the intention to recommend. The results of Study 1 indicate that both consumers’ age and gender play a significant role in satisfying service and shopping experiences, which in turn can lead to increased consumers’ satisfaction, retention, and word-of-mouth communication about the service product and/or service provider. Study 2 shows that a negative service experience in a store can significantly be “restored” by a positive shopping experience in the store and vice versa, and that these results are not influenced by gender or age Tynan & McKechnie, 2009). As experience is replacing quality as the competitive advantage in service industries, defining and improving customer experience are growing priorities for market research (Klaus & Maklan, 2013). Service providers seek to identify factors contributing to customer satisfaction and loyalty, and how that translates into customer spending and store performance (Anic & Radas, 2006). Previous research suggests that customer experiences should be differentiated, which carries a number of positive consequences for managers in order to strengthen customer relationships and trust (Spake, Beatty, Brockman, & Crutchfield, 2003), to increase satisfaction (Gaur & Xu, 2009), and to achieve long-term profitability (Carpenter & Fairhurst, 2005). (adsbygoogle = window.adsbygoogle || []).push({});  As positive customer experiences are precursors to customer satisfaction, retention, and positive word of mouth (Klaus & Maklan, 2013), the creation of superior experiences is considered a central objective for the service firm (Jaakkola et al., 2015; Verhoef et al., 2009). Thus, understanding the way the consumer constructs and evaluates her/his relationship with a retailer and the subsequent outcomes of the customer experience, in terms of customer satisfaction, retention, and recommendations, have become major concerns for all participants in the service and retailing industry (Cottet, Lichtle, & Plichon, 2006). While considerable work has been done on the role of store, employee, consumer demographics, and store image on loyalty, recommendations, and consumer satisfaction (Sit, Merrilees, & Birch, 2003), there is limited research examining the different impacts of service and shopping experiences on these service outcomes as a more holistic entity. Despite the importance of all factors and determinants in creating customer experiences, service and shopping experiences are often mistakenly seen as one concept; no clear distinction between the two terms is made and definitions remain vague (Davis & Hodges, 2012). The existing literature is limited in providing an understanding of customer experience factors in the service and shopping context (Davis & Hodges, 2012) and in predicting customer satisfaction, loyalty, and recommendations (Paul, Sankaranarayanan, & Mekoth, 2016). (adsbygoogle = window.adsbygoogle || []).push({});  To date, only a few studies have attempted to correlate consumer behaviors to service variables such as satisfaction (Babin, Lee, Kim, & Griffin, 2005), loyalty (Babin & Attaway, 2000), and recommendation intentions (Stoel, Wickliffe, & Lee, 2004). Furthermore, customer-employee relationships play a vital role in consumer experiences in service industries (Trivedi, 2011; Paul et al., 2016). Therefore, this research investigates the customer-employee relationships and outcomes of customer experiences, in terms of service and shopping experience perspectives on the outcomes of services. Furthermore, in previous studies the outcomes of the service experience were measured through a variety of variables, such as service quality (Flanagan, Johnston, & Talbot, 2005), satisfaction (Aurier & 2 I. ROOZEN AND P. I. KATIDIS Siadou-Martin, 2007), loyalty and word-of-mouth communication in a retail branding context (Carpenter & Fairhurst, 2005; Hart, Farrell, Stachow, Reed, & Cadogan, 2007). Since marketers have become more focused on creating long-term relationships in service industries (Ainsworth & Foster, 2017), customer satisfaction, retention, and word of mouth (WOM) are considered as outcome variables in this study. The research attempts to provide knowledge for practitioners to understand service and shopping experiences and to design appropriate service management initiatives to achieve service outcomes. Therefore, the current study addresses the following main research question: How does the customer-employee relationship impact service and shopping experiences in predicting customer satisfaction, loyalty, and WOM? Are there significant differences for male/female customers and for different age groups? To address the research question, we set up two studies. In the first study, we investigate experiences of the participants themselves; in the second study, we analyze a “hypothetical” (e.g., controlled) experience. The article is organized as follows: first, the relevant literature is discussed in order to develop the theoretical background and the conceptual framework. (adsbygoogle = window.adsbygoogle || []).push({});  Next, based on reviewed antecedents of the customeremployee relationship and outcomes (satisfaction, loyalty, intention to recommend) of shopping and service experiences, the research questions and the research design for Studies 1 and 2 are proposed. Furthermore, each study outlines the methodology, including the sample, measures and scales generated, followed by the subsequent results and analysis. Finally, a discussion of the findings is presented, putting forward implications for managers and service providers, as well as limitations and recommendations for future research. Customer experience: A literature review The literature on service management in a retail environment often focuses on managing service elements in customer relationships to create a competitive advantage (Gronroos, € 2008; Jaakkola et al., 2015), including factors such as perception of store attributes (Roozen, 2019), customer satisfaction (Sivadas & Baker-Previtt, 2000; Stoel et al., 2004), and demographic characteristics (Anic & Radas, 2006). While empirical studies on service experience center on the consumer culture theory of interpretative consumer research (Helkkula, 2011), some emphasize the individuality of consumers, where consumer expectations may differ across different types of services for different types of customers due to their shopping orientations (Birtwistle, Clarke, & Freathy, 1999). (adsbygoogle = window.adsbygoogle || []).push({});  In contrast, the retail marketing literature is dominated by a more interpersonal relationship theory approach JOURNAL OF RELATIONSHIP MARKETING 3 and has not considered the impact of non-social aspects of retail environments on the service outcomes (Ainsworth & Foster, 2017). Moreover, studies on service and shopping experiences have introduced the servicedominant logic concept (Helkkula, 2011; Vargo & Lusch, 2008) and how customer-employee co-creation contributes to customer experiences. Although the value of social cues in service settings is recognized in service management studies, scholars postulate that the overall store atmosphere and atmospherics are crucial in encouraging and developing desired service outcomes (Grewal, Baker, Levy, & Voss, 2003). These studies emphasize the consumer’s interaction with a store’s physical surroundings, personnel, merchandise, and customer-related policies and practices (Davis & Hodges, 2012; Kerin, Jain, & Howard, 1992; Terblanche & Boshoff, 2004). Although research on customers is extensive from both a retail marketing and service management point of view, the terms “customer experience,” “shopping experience,” and “service experience” are often employed as synonyms (Jaakkola et al., 2015; Klaus & Maklan, 2013). Based on the existing literature, customer experience is defined “as the customer’s cognitive and affective assessment of all direct and indirect encounters with the firm relating to their purchasing behaviour” (Klaus & Maklan, 2013, p. 227). Consistently across the literature, scholars agree that customer experience develops customer satisfaction (Anderson & Mittal, 2000), loyalty (Fornell, Mithas, Morgeson, & Krishnan, 2006), and word of mouth (Keiningham, Cooil, Aksoy, Andreassen, & Weiner, 2007). However, the service literature suggests that the success of these outcomes in a service setting is associated with the social interactions between the customer and the service provider (Lloyd & Luk, 2011; Spake et al., 2003), whereas, in the retail settings, consumer shopping behavior can be influenced by normative influences, consumers’ demographics, and interpersonal influences (Luo, 2005; Yi-Hsiu & Chen-Yueh, 2012). According to Gronroos ( € 2008), there are three dimensions of service quality: the technical, the functional, and the corporate image quality. (adsbygoogle = window.adsbygoogle || []).push({});  Angelova and Zekiri (2011) interlink the technical and functional quality, which involve what the customer is receiving from the service delivery to a service experience, as it is measured in an objective matter. The corporate image quality is concerned with the psychological interaction, evaluated in a subjective manner by a consumer (Bridson, Evans, & Hickman, 2008). Furthermore, new models argue that the “product” of the customer experience is value; obtaining value is a fundamental consumption goal from the consumer’s point of view and essential to all successful service exchanges (Davis & Hodges, 2012). In fact, the increasingly leading view of researchers presents customer experience as a longer process of company-customer interaction, generated through functional and emotional values (Carpenter 4 I. ROOZEN AND P. I. KATIDIS & Fairhurst, 2005; Lemke, Clark, & Wilson, 2010; Verhoef et al., 2009). Given that, the consideration of utilitarian and hedonic shopping values has become a common approach in defining service experiences (Ainsworth & Foster, 2017; Ballantine, Jack, & Parsons, 2010). Moreover, similarly to customer experience, both utilitarian and hedonic values evoke behavioral responses important for service providers; namely, satisfaction (Babin et al., 2005) and retention (Stoel et al., 2004), as well as consumers’ intent to recommend (Jones, Reynolds, & Arnold, 2006). Therefore, both utilitarian and hedonic values are important for service and shopping experiences when discussing service efficiency, in-store ambience (Diep & Sweeney, 2008), and customer services (Davis & Hodges, 2012).

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