The Effect of Perceived Value of Distance Selling on Psychological Distance and Customer Loyalty

Purpose - This study is to examine whether the perceived value of customers who purchase through a distance selling method such as an Internet shopping mall affects the psychological distance and how this leads to customer loyalty. Also, by analyzing the mediating effect of psychological distance, it was verified whether psychological distance plays a mediating role between the perceived value of distance selling and customer loyalty. Design/Methodology/Approach - Data collection was conducted for foreigners residing in Korea. We asked 250 people in various occupations in Korea to respond voluntarily by sending out a questionnaire made with Google Forms via email and KakaoTalk. Emails sent to respondents and KakaoTalk contain links to online questionnaires. Finally, 203 survey respondents were used for the analysis. Findings - First, the perceived value of distance selling was found to have a significant effect on psychological distance. It was found that functional value and financial value had a significant negative (-) effect on psychological distance, and emotional value had a significant positive (+) effect. However, social value did not affect psychological distance. This means that the better the quality and service, and the more money you save, the less time, space, and social distance you feel. On the other hand, it can be seen that the stronger the desire or emotion to purchase, the more psychological distance is felt. Second, it was found that the psychological distance feeling for long-distance purchase had a negative effect on customer loyalty. This means that as the distance purchasing customers feel a sense of temporal, spatial, and social distance, their repurchase or recommendation intention decreases. Third, as a result of analyzing the mediating effect of psychological distance, it was confirmed that the perceived value of distance selling leads to customer loyalty through psychological distance. This means that distance sellers need marketing efforts to reduce the psychological distance that customers feel in order to increase customer loyalty. Research Implications - It is difficult for customers who make distance purchases through online shopping malls to judge perceived values such as functional values of products. Therefore, reducing the psychological distance of consumers by providing detailed information on the producer, production location, and production process to the distance selling site will increase the repurchase intention. Also, distance sellers need marketing efforts to build customer trust in order to increase perceived value and reduce customers’ psychological distance.