Tandem 3

Prof. Oliver Emrich, Ph.D. + Prof. Sven Pagel, Ph.D. Susan Glaser + Elena Höfer Internet use is steadily increasing, and people are spending more and more time in digital environments. According to a representative ARD/ZDF online study, approximately 77 percent of all Germans used the Internet daily in 2018. By comparison, just three years earlier, the figure was only 63 percent of the total German population (Frees & Koch, 2019). Globally, too, internet usage has risen from around 18 percent in 2006 to approximately 49 percent in 2016 (International Telecommunication Union, 2018). Digital environments connect people with one another and are increasingly supplementing or even replacing contact between individuals and businesses. Brick-and-mortar retail is steadily losing market share to online retail. For example, the share of online sales in total German retail grew from 2.4 percent in 2007 to 9.5 percent in 2017 (German Retail Association, 2018). European e-commerce revenue rose from 307 billion euros in 2013 to 534 billion euros in 2017 (Ecommerce Europe, 2018). In many product categories, consumers perceive offerings in digital channels as better suited to their existing preferences (e.g., due to time savings, price advantages, and variety of offerings; Verhoef, Neslin & Vroomen, 2007). Companies with existing brick-and-mortar stores can also leverage this as a competitive advantage by more closely integrating their distribution channels in terms of services (Herhausen, Binder, Schoegel & Herrmann, 2015), product assortment (Emrich, Paul & Rudolph, 2015), or design (Emrich & Verhoef, 2015). The importance of social platforms such as Facebook, Twitter, Instagram, Snapchat, and sharing platforms is also constantly increasing in terms of consumer usage. However, many companies struggle to develop strategies that enable them to transform consumer interactions into value-adding value propositions. For example, a large-scale experimental study involving companies on social networks found that consumer participation in brand communities does not lead to an increase in sales, brand image, or the intention to recommend the brand; rather, there is even a weak negative correlation with economic value overall (John, Emrich, Norton & Gupta, 2017). This raises the question of how companies can more effectively expand their distribution channels through digital elements to create sustainable customer value. To date, only a few studies have systematically examined, using experimental methods, how the design of digital environments causally affects customer behavior (e.g., Lynch & Ariely, 2000). The existing studies focus on the acceptance, evaluation, and use of digital offerings based on consumers’ existing preferences (Lamberton & Stephen, 2016). However, it is conceivable that experiences in digital environments also influence preferences themselves—that is, consumers’ motivations, goals, and orientations may shift as a result of digital media use. The influence of the environment on preference formation occurs in a social context—for example, impulsivity in purchasing behavior increases when consumers shop with others (Luo, 2005). The temporal preference for consumption in the present or in the future is also significantly influenced by stimuli in a consumer’s perceived environment (Hershfield et al., 2011). Finally, digital environments can also alter the weighting of attributes—such as price or quality criteria—in preference formation, as demonstrated, for example, in experiments with website background images (Mandel & Johnson, 2002). However, to date, there is no research on how narrative elements and structures in digital environments influence consumer preference formation. Motivated by this, the following research question will be examined: How does the experience of narrative elements (e.g., text, audio, video, infographics) and narrative structures (e.g., storytelling, gameplay) in digital media environments influence consumers’ preference formation and long-term behavior? Technological capabilities in digital environments are evolving rapidly; consequently, companies are increasingly using not only the design of individual visual and verbal elements on websites (verbal and visual elements) (Bleier, Harmeling & Palmatier, 2019) to increasingly incorporate dynamic representations (multimedia animations, videos, interactive graphics such as maps, etc.). These dynamic representations have great potential to influence needs, motivations, and orientations by conveying meaningful content through narrative design (i.e., storytelling) that is perceived as meaningful (Van Laer, De Ruyter, Visconti & Wetzels, 2013). The integration of these digital narrative media elements is highly significant for brand perception and could therefore enable companies to gain competitive advantages. Overall, this raises the question of how digital media use should be linked to a company’s existing distribution channels in order to sustainably drive customer value. After all, there is currently a lack of systematic studies on how engaging, narrative media environments on the Internet affect long-term consumer behavior and customer loyalty. Consequently, the first, consumer-oriented research question is complemented by a second, business-oriented one: How can companies design narrative elements and storytelling structures in the digital media environment to achieve stronger customer loyalty in the face of online competition, and how must digital media design be integrated with existing distribution channels to increase customer value? The work conducted within the Research College aims to contribute to findings in motivation research, which is currently increasingly examining the influence of the experienced environment on individuals’ goal-setting (Fiske & Taylor, 2017). There is a lack of research that specifically examines the interaction between the experienced real-world environment and digital media and investigates its impact on the formation of preferences (Lamberton & Stephen, 2016). This issue is of critical importance for companies seeking to hold their own in changing markets against global players who are constantly optimizing their digital environments using massive amounts of customer data.