The emerging digital economy has brought about new paradigms for retailing. Consumers across the world face new opportunities and challenges as the Internet, the driving force of the new economy, has given rise to online fashion retailing as a new and increasingly popular way for retailers to sell clothing in the twenty-first century. Along with this opportunity comes the challenge of identifying and rectifying service failures. In spite of a proliferation of the number of studies on service failure and recovery in e-service settings, there is a paucity of knowledge in terms of how service failure and recovery practices are implemented in the fashion industry. The purpose of this study is to examine service failure and recovery strategies that are particularly effective in online marketing environments. As such, the conceptual framework that governs this research focuses on outcome- and process-related service failure and perceived justice theory. The specific focus of the study is the UK fashion industry. Due to the absence of touch-and-feel experiences that traditionally define the retail sector, and the absence of a salesperson in online retailing environments, the potential for service failure is amplified. Using a grounded theory methodology, data were collected via a series of semi-structured interviews and open-ended questionnaires with customers who had recent experiences of online shopping. These participants provided insights into online service failures and generated ideas about recovery performances in the UK fashion industry. Interviews were not audio-taped since permission to do this was not obtained. Instead, hand-written notations were taken and later analysed using the three-stage grounded theory approaches of open, axial and selective coding. The interviews were informed by the questionnaires which were designed to sensitise and gain access to participants, and these subsequently guided the semi-structured interviews that followed. Through a constant comparative method of open coding of interviews and questionnaires, eight open categories with unique attendant properties and dimensions emerged and these were subsumed into six main categories as a consequence of axial coding. The paradigm model was used to establish relationships amongst the categories. This formed the basis for selective coding which identified the core category and its relationships with the sub-categories and these were verified to develop a substantive theory of service failure and service recovery strategies. The practical implications highlighted by the study include the need for service managers to design online recovery strategies that meet customer needs in terms of interactional justice. The commitment to developing bespoke recovery strategies rather than applying standardised emails and texts that communicate politeness, concern and empathy to customers, and training customer services staff to provide live chat services to deliver interactional justice will ensure that customers are satisfied with online service recovery. Managerially, this study will benefit practitioners in many ways. Employees will be aware of the aspects that should be taken into consideration in recovering service failure. Employees can use the observations here to offer fair compensation, user-friendly procedures and effective communication to online fashion customers in the event of service failure. This will mitigate rates of dissatisfied customers switching to other online fashion retailers, and customers will appreciate proactive actions taken to recover failed service. The study builds upon previous research and fills a knowledge gap since it is the first of its kind to attempt systematically to combine service failure and service recovery literature together with perceived justice theory and, grounded theory to study customer evaluations of service failure and recovery. It is the first thesis to offer relevant recommendations to online fashion retailers that are informed by the approach described here. The substantive theory demonstrates that technology-mediated communications function as effective online service recovery strategies. Customer perceptions of fairness towards service failures and recovery strategies can improve customer satisfaction, reduce customer switching behaviour and encourage positive customer behavioural intentions. The study contributes to a new approach to better understanding the dynamics of service failures and recovery strategies in the service industry.

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