The intangibility of e-services

This study examines the construct of intangibility within the e-services context and clarifies why business-to-consumer services are made more intangible when they are virtualized and offered as Internet e-services. Clarifying the intangibility of e-services and examining its consequents is important as service providers seek to encourage consumers to use lower-cost e-services. This research specifically develops theory to explain how and why an e-service's intangibility can increase consumer beliefs that it is risky to use, and furthermore removes the risk-reducing effect of the e-service's perceived ease of use. These consequents of an e-service's intangibility are important to clarify because e-service's usage is based in part on beliefs that they are safe and easy to use. Results from a structural equation model-based analysis of consumer survey data supported these two hypothesized effects. More specifically, the performance, financial, and privacy risk dimensions were most affected by consumers' experience of mental intangibility regarding the e-service. In addition, a qualification of a previously reported risk-reducing strategy for e-service providers was identified. Only when consumers' mental intangibility was low (i.e., they had a clear mental picture of the e-service) did the e-service's perceived ease of use function as a risk-reducing factor. An e-service's intangibility may indirectly impede consumer usage of a range of e-services. Theoretical and practical implications are offered.