How does apology matter? Responding to negative customer reviews on online-to-offline platforms

Online customer review is one core component of online-to-offline (O2O) commerce. Negative customer reviews are evitable and threaten O2O business performance. How O2O business responds to negative reviews is highly visible to potential customers and has the potential to mitigate the detrimental effect of negative customer re-views. In this study, an experimental research was conducted by setting up a scenario of a failed restaurant service booked through an O2O platform. By analyzing data from 1,062 participants, we revealed that apology increases potential customers' affective and cognitive trust, which results in increased purchase and recom-mendation intention. Interestingly, the reduced perceived risk caused by apology increases potential customers' recommendation intention but does not affect their purchase intention. The findings are discussed from both theoretical and managerial perspectives.