Predicting Consumer Adoption of Branded Subscription Services: A Prospect Theory Perspective

Steven Day*, Janet Godsell, Donato Masi*, Wanrong Zhang

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

Drivers of and barriers to consumer adoption of product-service systems (PSS) deviating strongly from the current consumption paradigm remain unidentified. This study quantitatively investigates purchase intentions of a hypothetical branded fashion subscription service. This service features use- and result-oriented PSS attributes in a lack of ownership, newness, and choice, and is investigated from a Prospect Theory perspective using a mixed method design combining an experiment with a survey (n = 524). Results show that even if the PSS provider is highly trusted by consumers, this only mitigates some of the worries consumers have about wearing used clothing and being held financially liable for product damage. The only driver of adoption is the opportunity to save money. Additional specific product information is also explored and shows that PSS providers have scope to change consumer perceptions. Overall, it appears that fashion ownership and choice are lesser issues than the literature suggests, although financial incentives are important. Furthermore, having a trusted brand allows a potential PSS provider to alleviate only some of the concerns consumers have. The contribution of this paper lies in its empirical findings as well as in its validation of Prospect Theory as a valid approach to enquiring into reasons for or against consumer adoption of complex PSS such as subscription services.

Original languageEnglish
Pages (from-to)1310-1330
Number of pages21
JournalBusiness Strategy and the Environment
Volume29
Issue number3
Early online date20 Jan 2020
DOIs
Publication statusPublished - 1 Mar 2020

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Bibliographical note

This is the peer reviewed version of the following article: Day, S, Godsell, J, Masi, D, Zhang, W. Predicting consumer adoption of branded subscription services: A prospect theory perspective. Bus Strat Env. 2020; , which has been published in final form at https://doi.org/10.1002/bse.2435.  This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

Keywords

  • collaborative consumption
  • consumer adoption
  • fashion
  • product-service systems
  • sharing economy
  • subscription services

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