The Moderating Effect of Transaction Experience on the Decision Calculus in On-Line Repurchase

Sumeet Gupta and Hee-Woong Kim
International Journal of Electronic Commerce,
Volume 12, Number 1, Fall 2007, pp. 127.

Abstract: Repeat customers are five times more profitable than new customers. Internet vendors have to retain customers to reap the benefits of repeat sales, but more than 50 percent of repeat customers seldom complete a third purchase. One reason is the inability of on-line vendors to manage customers’ changing expectations. Vendors need to understand the decision calculus of repeat customers at every stage of their transaction experience with the vendor. This study uses a customer repurchase decision-making model to examine the effect of transaction experience on customers’ decision calculus in on-line repurchases. The model shows that the effects of perceived convenience and perceived price change over the transaction experience, whereas the effects of perceived value and pleasure do not. These findings have significant theoretical and practical implications.

Key Words and Phrases
: Internet shopping, mental accounting theory, repurchase decision calculus.