Predicting consumer adoption of branded subscription services: A prospect theory perspective

Abstract

AbstractDrivers 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.