Scholarly article on topic 'Mobile App Usage and its Implications for Service Management – Empirical Findings from German Public Transport'

Mobile App Usage and its Implications for Service Management – Empirical Findings from German Public Transport Academic research paper on "Economics and business"

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Abstract of research paper on Economics and business, author of scientific article — Christoph Schmitz, Silke Bartsch, Anton Meyer

Abstract By drawing on self-service technology literature, the technology acceptance model (TAM), and on results of qualitative research, a model is presented to explain consumers’ intentions to use mobile apps of service companies. Additionally, the research identified outcomes of actual mobile app usage. The model was tested by collecting data from 197 public transport app users in Germany. Results indicate that information fit to task, convenience value, and speed of transaction affect perceived usefulness of mobile apps. Moreover, ease of understanding, intuitive handling, and reliability were found to drive perceived ease of use. The research also identified perceptions of overall service quality, firm innovativeness, and subjective firm knowledge as three outcomes of app usage. These findings emphasize the benefits of developing company owned mobile apps and have important implications for encouraging customers to use such programs.

Academic research paper on topic "Mobile App Usage and its Implications for Service Management – Empirical Findings from German Public Transport"

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Procedía - Social and Behavioral Sciences 224 (2016) 230 - 237

6th International Research Symposium in Service Management, IRSSM-6 2015, 11-15 August

2015, UiTM Sarawak, Kuching, Malaysia

Mobile App Usage and Its Implications for Service Management -Empirical Findings from German Public Transport

Christoph Schmitza*, Silke Bartschb, Anton Meyerc

abcLudwig-Maximilians-University Munich, Geschwister-Scholl-Platz 1, Munich 80539, Germany

Abstract

By drawing on self-service technology literature, the technology acceptance model (TAM), and on results of qualitative research, a model is presented to explain consumers' intentions to use mobile apps of service companies. Additionally, the research identified outcomes of actual mobile app usage. The model was tested by collecting data from 197 public transport app users in Germany. Results indicate that information fit to task, convenience value, and speed of transaction affect perceived usefulness of mobile apps. Moreover, ease of understanding, intuitive handling, and reliability were found to drive perceived ease of use. The research also identified perceptions of overall service quality, firm innovativeness, and subjective firm knowledge as three outcomes of app usage. These findings emphasize the benefits of developing company owned mobile apps and have important implications for encouraging customers to use such programs.

© 2016 The Authors.Publishedby ElsevierLtd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.Org/licenses/by-nc-nd/4.0/).

Peer-review under responsibility of the Universiti Teknologi MARA Sarawak

Keywords: mobile apps; self-service technologies; technology acceptance model; service quality

1. Introduction

The rise of smartphones and mobile apps is changing the way we live, communicate, and do business. An increasing number of firms introduce company-owned apps as a way to create better individual experiences on the "Internet of Me". For service companies, there is a long tradition of technology infusion to overcome issues with special characteristics of services and to enable customers to participate in the service delivery process (Dabholkar, 1996). Hence, many service businesses have shifted from high-touch, low-tech to high-tech, low-touch (Bitner,

* Corresponding author. +49 (0) 89 / 2180 - 5735; fax: +49 (0) 89 / 2180 - 3322. E-mail address: c.schmitz@bwl.lmu.de

1877-0428 © 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Peer-review under responsibility of the Universiti Teknologi MARA Sarawak doi:10.1016/j.sbspro.2016.05.492

Brown & Meuter, 2000; Giebelhausen et al., 2014). Despite various empirical research on self-service technologies (for a review see Wang, Harris, & Patterson, 2013), there is generally a lack of service research on the usage of mobile apps.

In comparison to classic self-service technologies, mobile apps offer new smart features that service managers can use to enrich their service offering. At the same time, consumers increasingly spend time on using their smartphone and specifically mobile apps at the expense of other media. In fact, smartphone penetration in the U.S. has risen to 56% of the population in 2013 and 83% of these users do not leave home without their smartphones. Consumers use their mobile devices for a multitude of different activities, such as looking for local information, searching the web, research products and services, or making actual purchases (Google, 2013). Interestingly, most of these activities are performed by mobile apps. Smartphone owners spend 86% of the time using their smartphone on mobile apps emphasizing the enormous potential of these programs (Nielsen, 2013).

2. Mobile apps and self-service technologies

Smartphone apps have been defined as "end-user software applications that are designed for a cell phone operating system and which extend the phone's capabilities by enabling users to perform particular tasks" (Purcell, Entner, & Henderson, 2010). This definition clearly reflects the relationship of the smartphone as a platform on the one hand and mobile apps as the software that makes the device valuable to consumers by providing content on the other. In fact, "smartphones aren't very "smart" without the software apps that give them their usability and versatility"(Voas, Michael, & van Genuchten, 2012). When it comes to company owned apps, managers are very much interested in developing mobile apps that incorporate the company's brand. These branded apps are defined as "software downloadable to a mobile device which prominently displays a brand identity, often via the name of the app and the appearance of a brand logo or icon, throughout the user experience" (Bellman et al., 2011). As this research focuses on mobile apps that are owned by service companies, there will be an emphasis on branded apps as defined above.

Academic research on mobile apps is scarce given that the penetration of smartphones is a very recent phenomenon. Although there are some studies with regard to smartphones and smartphone usage (Verkasalo et al., 2010; Park & Chen, 2007; Jung, 2014; Andrews, Drennan, & Russell-Bennett, 2012; Kim, Lin, & Sung, 2013), there is generally a lack of research on the implementation of smartphone apps in the service delivery process. One area of research that seems promising is the literature on self-service technologies (SST) that have been defined as "technological interfaces that enable customers to produce a service independent of direct service employee involvement" (Meuter et al., 2000). Generally, based on literature, SST have been categorized according to specific interfaces serving different purposes from the customer perspective (Forbes, 2008; Meuter et al., 2000). Thereby, the differentiation of internet and non-internet SST seems most appropriate for classifying mobile apps. In particular, many of the purposes of online based interfaces identified by Meuter et al. are nowadays served by mobile apps (package tracking, financial transactions, health information, self-training etc.). Compared to non-internet SST, empirical research on online based SST is less elaborated (van Beuningen et al., 2009; Collier & Kimes, 2013; Curran, Meuter, & Surprenant, 2003). As aforementioned, studies on mobile apps as technological interfaces that are included in the process of service delivery are completely absent.

However, before addressing the described research gap, it is important to clarify the differences between classic self-service technologies and mobile apps. According to literature and qualitative research conducted for the underlying studies, there are three major coherent differences:

• Bidirectional access to real-time data: similar to the practice of contextual marketing, companies can provide personalized information to customers via the app in real-time (Xueming & Seyedian, 2003; Kenny & Marshall, 2000). Conversely, customers provide real-time data to companies (e.g. their location). Hence, smartphone apps enable an exchange of data to serve the customer's needs as required. Advancing standards for wireless communication of high-speed data and rising availability of wireless local area networks additionally favor the access to real-time data.

• Ubiquity at all times: mobile apps fulfill the customer need of accessing information and services at any time and from anywhere (Andreassen, Lervik-Olsen, & Calabretta, 2015). As smartphones are always with

consumers, services that support consumers in everyday activities are constantly available (Tossel et al., 2012). This stands in sharp contrast to stationary or location based SST.

• Ownership: smartphones are owned by consumers and as a result of psychological ownership higher levels of personalization and perceived control can be achieved (Pierce, Kostova, & Dirks, 2001). Via mobile apps smartphones are individualized and enable users to reach a variety of goals (Jung, 2014; Tossel et al., 2012). However, most SST that have been researched are owned by the service company not providing consumers much space to individualize the technology or to perceive a certain sense of control. Additionally, smartphone apps, as a software enabling self-services, are embedded into the operating system. Thus, consumers perform tasks on their smartphone in a familiar rather than an unknown setting.

3. Drivers and outcomes of mobile app usage

As mentioned before, smartphones and mobile apps are increasingly gaining importance and becoming essential in consumers' lives. Furthermore, companies have also anticipated the potential that this technology offers. However, due to the described lack of research on smartphone apps of service companies, there are no studies that investigate which characteristics encourage consumers to use such apps and more importantly, which outcomes service managers can expect when considering to develop an app. Therefore, the present research aims at clarifying two questions:

• What determines the intentions of consumers to use apps of service companies?

• Which outcomes for service companies can be achieved by actual app usage of consumers?

The first research question can be elaborated by drawing on the technology acceptance model (TAM) that is largely based on the theory of reasoned action (Adams, Nelson, & Todd, 1992; Davis 1989; Davis, Bagozzi, & Warshaw, 1989; Ajzen, 1991). According to TAM, ease of use and perceived usefulness of a technology are essential drivers of the attitude toward using the technology and finally the intentions to use the technology. Therefore, the first question aims at identifying technology-specific characteristics that make an app useful and easy to use. Unsurprisingly, there is a lot of research employing the TAM for explaining the use of different SST (Curran, Meuter, & Surprenant, 2003; Weijters et al., 2007; Dabholkar & Bagozzi, 2002). However, the question of what makes smartphone apps useful and easy to use remains open.

More interestingly from the perspective of service companies is to investigate what advantages can be achieved by encouraging consumers to actually use smartphone apps. This is a specifically relevant question, as it extents the TAM to potential outcomes. Obviously, if a technology is useful and easy to use for consumers it does not mean that it makes sense for companies to introduce this technology. Therefore, clarifying the second research question also aims at deriving implications on whether it makes sense for service companies to launch an own app.

4. Stage 1: The qualitative study

4.1. Research methodology

In order to identify drivers and outcomes of mobile app usage, three focus groups were conducted. Qualitative research is very common in the field of SST (Meuter et al., 2000; Howard & Worboys, 2003; Walker et al., 2002; Pujari, 2004). The discussions broadly followed a guideline and were moderated by experienced interviewers. In total, 18 people participated and were equally distributed into the three groups. Consumers discussed how they use smartphone apps, if and when smartphone apps of service companies are used as well as characteristics that make some apps better than others and specifically useful as well as easy to use. Additionally, it was discussed if and how an app potentially changes the way a company and its services are perceived by consumers. The duration of the discussions varied from 60-90 minutes. Participants of the focus groups were all active users of smartphone apps and therefore mostly students. The youngest participant was 15, the oldest 33. All discussions were recorded, transcribed and imported into MAXQDA 11 software for analytical coding. Two coders coded each discussion with

the code system that was developed by one of the coders before. The coefficient of agreement throughout all three focus groups was 76%.

4.2. Results perceived usefulness:

Perceived usefulness has been defined in Davis' study on the adoption of computers by employees as "The degree to which a person believes that using a particular system would enhance his or her job performance" (Davis, 1989, p.320). Three core themes were found to affect consumers' perceptions of perceived app usefulness: savings, convenience, and fit of information. Savings refer to value that is delivered due to higher speed of transaction or financial advantages that using the app offers. Focus group participants frequently referred to savings as an important driver of usefulness, as illustrated by the following comments: "Apps are just much quicker than navigating in the browser" or "I have the ticket on my smartphone and that is a lot cooler because I don't need to print anything". The role of convenience has also been confirmed by other research on SST (Meuter et al., 2000; Collier & Kimes, 2013). It has been defined "as the perceived time and effort required in finding and facilitating the use of a self-service technology" (Collier & Sherrell, 2010). Focus group participants commented: "Most of the time data is stored in the app. I can just open the app and use it. For example when I order a taxi, my address is already stored in the database". Lastly, fit of information refers to how well the information offered in the app fits to what the service company wants the customers to do by themselves. Consider the following comment: "Information when I need it and in a condensed manner so I can quickly find what I want to know".

4.3. Results perceived ease of use:

Perceived ease of use is defined as "The degree to which a person believes that using a particular system would be free of effort" (Davis, 1989, p.320). App design, intuitive handling, ease of understanding, and reliability were the key themes mentioned. The first theme of design refers to the shapes and colors of the app. During the exploratory study participants discussed design as an important app feature as emphasized by this comment: "Buttons and logos that look cool, that is, modern and up to date". Intuitive handling as an app's "ease of operation" and ease of understanding were mentioned in the qualitative research and have also been identified by prior research employing the TAM (Loiacono, Watson, & Goodhue, 2007). Here, participants stated that the app should be "easily structured" and should have "basic functions that are easily understandable". Lastly reliability "refers to the correct technical functioning of an SST and the accuracy of service delivery" (Weijters et al., 2007). Generally, this construct has widely been applied in the literature on SST (Dabholkar, 1996; Dabholkar & Bagozzi, 2002), service quality (Parasuraman, Zeithaml, & Berry, 1988), and electronic service quality (Parasuraman, Zeithaml, & Malhotra, 2005). Comments such as "The app shouldn't crash" or "It should simply work" indicate that reliability is also a critical theme for apps.

4.4. Other drivers of intentions to use:

In addition to perceived usefulness and ease of use, entertainment value and security were two constructs that were mentioned in the qualitative research. Similar to other technologies, entertainment value indicates that intentions to use an app sometimes cannot be captured by utilitarian aspects only (Loiacono, Watson, & Goodhue, 2007; van der Heijden, 2004). Furthermore, the security dimension was also discussed by participants as suggested by previous research (Wolfinbarger & Gilly, 2003). Both are expected to directly influence intentions to use as an extension of the TAM.

4.5. Results outcomes of app usage:

In the explorative study and by consulting service management literature, outcomes of app usage were also identified. Thus, three core themes were found as outcomes: perceived service quality, perceived firm innovativeness, and subjective knowledge about the service firm. Perceived service quality, in essence, refers to "the consumer's judgment about the superiority or excellence" of a service offering (Zeithaml, 1988). Participants in the

focus groups used mobile apps to completely produce the service via the app (e.g. language school) or to support the service delivery (e.g. airline check-in). Thus, as the app potentially improves the service process by making it more efficient, overall service quality might be affected. Thereby, the link between perceptions of service quality and the service process is very well established in literature (Gronroos, 1984; Meyer & Mattmuller, 1987). Perceived firm innovativeness, defined as the "consumer's perception of an enduring firm capability that results in novel, creative, and impactful ideas and solutions for the market" (Kunz, Schmitt, & Meyer, 2011) was also discussed in the explorative study. App users in the focus groups frequently made comments, such as "By offering an app, the company appears innovative" or "If there is a company that does not offer an app, I think this company is behind the market", to emphasize that an app can have a positive effect on perceived firm innovativeness. Finally, subjective knowledge as "a consumer's perception of the amount of information they have" (Flynn & Goldsmith, 1999) on a specific company and its offerings was discussed in the focus groups. By frequently using an app of a service company, consumers are confronted with information that the firm is delivering via the app. Therefore, the construct is also added as an outcome of actual app usage.

5. Stage 1: The quantitative study

5.1. Research methodology

Data were collected from 197 app users of public transportation in Germany. This industry was chosen because participants in the focus groups frequently mentioned that they use such mobile apps. The specific app had to be owned and operated by the same service company that delivers the transportation in order to test the abovementioned constructs. The quantitative data was obtained online by using QuestBack's EFS Survey. 59% of participants were female, the average age was 24 years. Most respondents were students (70%) and used their smartphone for about 4 hours a day.

5.2 Measures

Scales from prior research were adjusted to the app context and public transport. All items were measured on a five-point Likert scale ranging from 1=disagree to 5=agree. Sources of the scales are illustrated in Figure 1.

5.3 Results

Partial least squares structural equation modeling was selected due to the explorative character of the study and the relatively small sample size (Hair, Ringle, & Sarstedt, 2011). By evaluating the measurement models, some items had to be deleted (two items of the entertainment construct, one item of financial value construct, and five items of perceived firm innovativeness) due to low relevance of their outer loadings. Subsequently, all constructs showed high composite reliability as well as convergent and discriminant validity (Hair et al., 2014). The structural model was assessed by firstly evaluating the path coefficients. For perceived usefulness, information fit to task, convenience value and speed of transaction were significant. The coefficient of determination (R2) for perceived usefulness was 0.540 indicating predictive accuracy. For ease of use, intuitive handling, ease of understanding and reliability turned out as significant after testing. R2 of ease of use was 0.68 also showing predictive accuracy. Furthermore, the present research confirmed the applicability of the TAM to mobile apps. Perceived usefulness and ease of use both exert a significant influence on intentions to use. Entertainment and security were not significant. However, this result may not hold for other service industries (e.g. an app of a cinema operator or banking apps). Finally, as suggested by literature, intentions are a strong indicator for behavior (Ajzen, 1991). For the second research question, actual app usage had a strong and significant influence on all three identified outcomes. These results are specifically contributing to service marketing research because of the lack of research on technology usage in general and app usage in particular. All the results are summarized in Figure 1.

Fig. 1. Assessing the model.

6. Implications and limitations

In essence, the present research found dimensions that service managers can use to enhance app usage. Thereby, companies should focus on the most important features that consumers need in order to produce a service independent from employees (information fit to task). In this manner, the advantages of the technology should be exploited, emphasizing that apps can be used anywhere and anytime to increase the service delivery process (convenience value, speed of transaction). Clarity, understandability and technical reliability of the app additionally help to convince consumers of an app (ease of understanding, intuitive handling). More importantly for service managers, the present research investigates outcomes of using an app, emphasizing the relevance of the identified dimensions. Perceptions about a company's service quality and innovativeness as well as the subjective knowledge that consumers have about a firm and its offerings can be increased by encouraging them to use the app.

However, like any empirical research, the study has limitations. Firstly, the results have only been tested in one industry. There is no empirical proof that the identified dimensions are also valid for other service industries. The same is true for the outcomes that can be achieved by app usage. Additionally, the role of security and entertainment might be relevant for certain industries that depend on these characteristics (e.g. cinema or banking). Secondly, data was only collected in Germany. Studies in countries with higher or lower smartphone penetration may lead to different results. Moreover, the effect of app usage on perceived innovativeness or service quality needs to be tested for non-student samples, as other generations might experience app usage as more innovative leading to new opportunities to create the service process more efficiently.

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