Consumer-app Relationships A study on the strength of young consumers’ relationship with their smartphone applications Master thesis |Cand. Soc. Service Management Copenhagen Business School Gine Rosenberg Stauning Supervisor: Helle Haurum May 17, 2016 Charlotte Gade Agerskov 253,022 characters (111 pages) 1. Executive Summary 4 2. Introduction 5 2.1. Problem Statement 6 2.2. Research Question 6 3. DAYFAIR Company Profile 6 3.1. The DAYFAIR app 8 4. Delimitation 9 5. Clarification of Concepts 10 6. Philosophy of science 10 6.1. Research Paradigm 10 6.2. Ontology 11 6.3. Epistemology 11 6.4. Hermeneutic Heritage 12 7. Theoretical Foundation 13 7.1. Service Dominant Logic 13 7.1.1. Critique of SD-Logic 17 7.2. Co-Creation of Value 18 7.3. Experience Economy 19 7.3.1. Definition of Experience 19 7.3.2. Origin of Experience 20 7.3.3. Pine & Gilmore´s Experience Economy 20 7.3.4. What is an App Experience? 23 7.4. The Concept of Self and the Extended Self 24 7.4.1. Technology’s Influence on Self 26 7.5. Brand Relationship Theory 28 7.5.1. The Concept of Anthropomorphization 28 7.5.2. Fournier’s Relationship Theory 29 7.5.3. The Brand Relationship Quality Scale (BRQ) 31 Interdependence 31 Love and Commitment 31 Partner Quality 31 Self-concept of Connection 32 Nostalgic Attachment 32 Commitment 32 Intimacy 33 7.5.4. Limitations of Fournier 33 7.5.5. Paradox of Technology 34 7.6. Diffusion of Innovation Theory 37 7.6.1. Word-of-Mouth Marketing 41 8. Methodology 42 8.1. Research Design 42 8.1.1. Mixed Methods 43 8.2. Selection of informants 45 8.3. Presentation of Informants 46 8.4. Interviews 48 8.4.1. Interview Guide 48 1 8.4.2. Type of Questions 48 8.4.3. Two Interviewers 49 8.4.4. Structure of the Interviews 49 8.5. Transcription 50 8.6. Thematic Network Analysis 51 8.7. Software versus Manual Transcription and Thematic Analysis 52 8.8. Validity and Reliability 52 9. Findings and Analysis 54 9.1. Informants’ General Relationship with their phones 54 9.1.1. Smartphones Disturb Physical Social Interactions 56 9.1.2. Smartphone Applications 59 Time spent on Smartphone Applications 59 Sources of App Discovery 60 9.2. Communication 62 9.3. Part of a Network/Community 64 9.4. Fear of Missing Out (FoMO) 65 9.5. The Brand Relationship Quality Scale 68 9.6. Interdependence 69 9.6.1. Love/Commitment 71 9.6.2. Partner Quality 74 9.6.3. Self-Concept Connection 75 “Likes” and the perception of self 76 9.6.4. Deletion 77 9.6.5. Nostalgic Attachment 80 9.6.6. Intimacy 81 9.7. Consumer Shopping Behavior and Preferences 83 9.7.1. Informants’ Shopping Behavior 83 9.7.2. What is a good deal? 85 9.7.3. The Importance of App Design 86 10. Discussion 88 10.1. From BRQ to ARQ 88 10.2. The Effect of WOMM Strategies 91 10.3. Characteristics Contributing to the Rate of Adoption 93 11. Conclusion 95 12. Suggestion for Future Research 96 13. References 98 14. Appendixes 110 14.1. Appendix 1: DAYFAIR – App design 110 The first App design 110 The second app design 111 14.2. Appendix 2: The Four Realms of an Experience (Pine & Gilmore, 1998) 112 14.3. Appendix 3: Typology of Consumer – Brand Relationship Forms (Fournier, 1998) 113 14.4. Appendix 4: Four Social Media Communication Strategies (Kozinets, et al., 2010) 114 14.5. Appendix 5: Survey 115 14.6. Appendix 6: Interview guide 119 14.7. Appendix 7: Fournier’s Brand Relationship Quality Scale (2008) 121 14.8. Appendix 8: The Brand Relationship Quality Scale with added sub-facets 122 2 14.9. Appendix 9: Transcription of Semi-Structured Interview 123 Informant A - Sebastian 123 Informant B - Charlotte 126 Informant C - Elisabeth 130 Informant D - Christina 133 Informant E - Lili 136 Informant F – Kean 140 Informant G - Casper 142 Informant H - David 146 Informant I - Daniel 148 Informant J - Kirsa 151 Informant K - Cecilie 154 Informant L - Maja 157 Informant M - Anna 160 Informant N - Jacob 164 Informant O - Joakim 168 Informant P - Andreas 170 15. Appendix 174 15.1. Appendix 10: Overview of identified themes 174 15.2. Appendix 11: Results from Survey 175 15.3. Appendix 12: Informants top-3 Smartphone Applications 186 Prio 1 186 Prio 2 186 Prio 3 187 15.4. Appendix 13: Sub-facets chosen by informants (top-3) Prio 1-3 188 Prio 1 188 Prio 2 195 Prio 3 201 15.5. Appendix 14: App Relationship Quality (ARQ) 208 3 1. Executive Summary We’re living in a technological society where consumers increasingly enjoy great comfort of the advancement within technology. Especially, smartphones have become a vital part of consumers’ lives, always being within arm’s reach. Consumers have become dependent on their smartphones as they provide a wide range of advanced functionalities and services. Studies show that 90% of the time spent on these devices is dedicated to apps, a hyper-competitive market that continues to grow at unprecedented pace (Chin, 2015; Eddy, 2016). Guided by a general curiosity of what drives and determines young consumers’ relationships with these apps, this thesis aims to identify the key facets behind young people’s relationship with their smartphone applications. Prior studies show that consumers can attribute brands with anthropomorphic characteristics and develop relationships with these (Fournier, 1998; Blackston, 1993). In general, the marketing discipline has undergone a paradigm shift by having gone from a transaction based orientation to a relationship orientation. However, with smartphone applications being a relatively phenomenon not much yet exist on consumers’ relationships with these. Thus, this thesis develops a measurement scale for evaluating the quality and strength of consumer-app relationships. Fournier’s (1998) work on brand relationships was used in identifying the dominant dimensions of brand relationship quality. Methodologically, we applied the technique of triangulation as our empirical data was collected through a quantitative survey with 260 respondents and 16 qualitative, semi-structured in-depth interviews with young Copenhageners in the age 15-30 years old. Through this method we gained significant insight and identified six main facets of consumer-app relationships; interdependence, commitment, partner quality, self- connection, intimacy versus intrusiveness and FoMO (fear of missing out). Combined they constitute our proposal for an app relationship quality scale (ARQ) These facets can be individually present, however, if they are all present there’s a greater chance of building a strong consumer-app relationship. Especially, young consumers’ FoMO and their need to be part of a network/community and express who they are (both their actual and ideal self) prevails in explaining the strong relationship they have formed with certain apps. Contrary to Fournier (1998) who believes consumer-brand relationships to resemble interpersonal relationships, we found this not to be the case with consumer-app relationships, mainly due to the participating informants’ lack of deep affective feelings towards apps and the fact that they do not perceive apps to be living entities. Consumer-app relationships are thus not directly analogous to interpersonal relationships. 4 2. Introduction Over the course of a few years, especially with the advent of smartphones, phones have become significantly integrated into our lives. They have changed not only how we communicate and how we’re social but also redefined our perception of time and accessibility (Roberts, 2016). With smartphones also came smartphone applications, a market that is growing exceptionally fast (Eddy, 2016), and which provide consumers an unlimited range of apps offering everything from entertainment to task facilitation. Consequently, our phones have developed from being simply a means of dyad communication to an all-encompassing device that grant us constant access to information and social networks and allow us to perform daily tasks with only the tap of a screen. They have become virtually indispensable in today’s fast-paced world, always being within arm’s reach (Certeza, 2014). Consumers are seemingly in a strong relationship with this incl. their applications. The integration of apps in consumers’ lives have led to symptoms of addictiveness for some and popularized the phenomenon FoMO (Fear of Missing Out). FoMO occurs when consumers feel anxiety because they feel they are missing out on something and not keeping up with what’s going on, which may lead to a compulsive concern about being excluded (Busch, 2016). Even if wanting to, most consumers have troubles reducing their use of apps as they seem to have formed relatively strong relationships with these. For better or worse smartphone applications seem to have become, and probably will remain, an important part of consumers’ lives. But, what drives these strong consumer-app relationships? This thesis was originally inspired by an app developed by the Danish company DAYFAIR ApS. When the thesis process started the DAYFAIR app was still active and trying to make it in the intense, saturated and hyper- competitive market. However, during the thesis process DAYFAIR decided to temporarily withdraw the app due to poor penetration and feedback from users. This inspired us to research why DAYFAIR did not become a success and what drives consumers’ relationship with an app. Through our research we have explored young consumers’ relationships with their existing apps to try to understand their needs, expectations to and what drives these relationships. Taking an offset in Fournier’s (1998) relationship theory and brand relationship quality scale we set out to identify some of the key facets of consumer-app relationships. The thesis concludes with our proposal of a conceptual model for an app relationship scale, based on modifications applied to Fournier's BRQ scale, and a discussion of the interpersonal relationship analogy in regards to apps.