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College of Business Administration
University of Rhode Island
2004/2005 No. 3
This working paper series is intended tofacilitate discussion and encourage the
exchange of ideas. Inclusion here does notpreclude publication elsewhere.
It is the original work of the author(s) andsubject to copyright regulations.
WORKING PAPER SERIESencouraging creative research
Office of the DeanCollege of Business AdministrationBallentine Hall7 Lippitt RoadKingston, RI 02881401-874-2337www.cba.uri.edu
William A. Orme
Miao Zhao and Ruby Roy Dholakia
Effects of Online Store Attributes on Customer Satisfaction & Loyalty
Effects of Online Store Attributes on
Customer Satisfaction & Loyalty
Miao Zhao, Ph.D*. Assistant Professor of Marketing
Roger Williams University One Old Ferry Road
Bristol, RI 02809 Ph: 401-253-5351
Email: [email protected]
And
Ruby Roy Dholakia, Ph.D. Professor of Marketing & Electronic Commerce
The University of Rhode Island College of Business Administration
Ballentine Hall, 7 Lippitt Road Kingston, RI 02881-0802
Ph: 401-874-4390; Fax: 401-874-4312 Email: [email protected]
* Contact Author
Effects of Online Store Attributes on
Customer Satisfaction & Loyalty
Abstract
With a choice of many online store attributes, retail managers are concerned about which
attributes to include and how to operationalize them as well as their impact on customer
satisfaction and loyalty. There is a lack of consensus regarding online store attributes and their
categories, and there is very limited empirical research regarding their effects. This paper uses a
widely cited secondary source (Bizrate.com) that generates ratings on a wide variety of retail
sites to look at the relationships. Based on the selected attributes included in the Bizrate data set,
the analyses find varying relationships between specific online store attributes and site design,
satisfaction and loyalty. The discussion, taking the methodological limitations in mind, draws
certain conclusions between the online store attributes and the key dependent variables.
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Introduction
With the emergence of computer-mediated communication (CMC), online stores are
experimenting with attributes that are unique to the new media. There is a choice of many
attributes (such as search engine, ordering system, order status tracking, customer survey,
personalization, and virtual reality display, etc.), each performing a specific function and distinct
from other attributes within the website. In addition to deciding which attributes to include and
how to specifically operationalize the selected attributes, online store managers are also
concerned about the impact of an attribute or a set of attributes on customer satisfaction and
loyalty. While there is an established body of literature and decades of experience regarding the
design of physical stores, the new world of online stores and website attributes are now
beginning to receive attention (e.g. Burke 2002; Eroglu, Machleit and Davis 2003; Park and Kim
2003).
In this paper we examine online retail store attributes and their effects on customer
satisfaction and loyalty. Unlike previous research, we do not create an online store with specific
attributes rated by student respondents; instead, we utilize secondary data on customer ratings of
real-world online stores. Characteristics of the secondary data allow us to separate the
contribution of website attributes at the time of placing an order as well as after receiving
delivery of the ordered merchandise.
The paper is organized as follows. First, the paper briefly reviews the literature on
website attributes and their relationship to customer satisfaction and loyalty. Given the growing
literature on interactivity, which is one of the important website attributes, selected literature on
interactivity and its effects on customer satisfaction and loyalty is also reviewed. Next, the
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design of the empirical study, specifically the secondary data source, is described. The paper
concludes with presentation and discussion of the analysis of the secondary data.
Literature Review
A website consists of multiple attributes. Emerick (1995) identified “end users group”,
“end user information gathering”, “product/service utilization service”, “product/service
explanation and problem solving”, and “ordering” as attributes adopted by Internet Presence
Sites (IPSs). Marrelli (1996) focused on operational attributes to analyze the Zima website
(www.zima.com) and indicated that attributes such as “email feedback loop”, “multimedia
presentation”, “web questionnaire”, “affinity groups”, and “software downloading” play
important roles in building a highly interactive Internet Presence Site (IPS). Lii, Lim and Tseng
(2004) listed 8 attributes, termed operational factors, including content, attractiveness, ease of
use, personalization, interactivity, online community involvement, security, and maintenance
level. Burke (202) organized 31 features into four groups and used consumer surveys to list“must
have” and “should have” attributes. In addition to dimensions important in offline shopping,
Zeithaml, Parasuraman and Malhotra (2000) discovered several other attributes critical in the
online environment. Ghose and Dou (1998), listed 23 attributes used by IPSs and further
classified them into five groups: “customer support”, “marketing research”, “personal-choice
helper”, “advertising/ promotion/ publicity” and “entertainment”.
Given the large number of possible attributes as well as the changing nature of
technology that makes new attributes increasingly possible, it is not surprising that there is a lack
of consensus regarding “must have” and “optional” attributes. Using Ghose and Dou’s (1998)
classification of website attributes, Table 1 lists potential attributes across four different types of
websites – communication, entertainment, information and transaction (online store). A “X”
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indicates that a specific attribute is more likely to be included in corresponding type(s) of
websites; however, a blank does not mean that the attribute cannot be included in a specific type
of website. For example, the attribute “games” is more likely to be included in an entertainment
website; however, some information websites such as www.electrolux.com also offer several
games that can be related to the firm’s products, even though “games” is not a typical attribute
for an information website.
Table 1: Types of Websites and Typical Website Attributes Website Type
Attribute
Informa-tion
Entertain-ment
Transac-tion (Online retail)
Commu- nication
Keyword Search X X X X Recommendation X My Account/File X X X X Dealer Location X
Personal Choice Helper
Virtual Reality Display X X X Software Downloading X X Online Problem Diagnostics X E-form Inquiry X X X X Order Status Tracking X Comment X X X X
Customer Support
Feedback X X X X Site Survey X X X X Product Survey X
Marketing Research
New-product Proposal X Electronic Coupon X Online Order X Bulletin Board X X Chat Room X Short Message X Email X Sweepstakes/prize X
Advertising, Promotion and Publicity
Banner ads. X X X X Games X Surfer Postings X X
Entertainment E-card X
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With so many website attributes to choose from, Table 1 suggests that transaction (or
online store) sites are more likely to include certain types of attributes. It also suggests that
online stores are “attribute rich” - potentially containing the maximum number (16) of the 25
specific attributes. It is also very likely that online stores will differ not only on the number of
specific attributes incorporated within specific websites, but also how a specific attribute such as
“customer support” is operationalized. These variations create important challenges for research
on the effects of individual attributes on customer satisfaction and loyalty.
Interactivity as Key Attribute
Interactivity, identified as one of the key dimension of websites, has received perhaps the
most attention among website attributes. While it is recognized as a multi-dimensional construct
(Dholakia et. al. 2001), agreement is lacking regarding the number and specifics of interactivity
dimensions. Liu and Shrum (2002) examined several on-line marketing tools along three
dimensions of interactivity – active control, synchronicity and two-way communication – and
found online stores to be second only to “web community” on interactivity. Lii, Lim and Tseng
(2004) listed interactivity as one attribute and while they failed to determine the underlying
factor structure, they identified three factors - labeled “reliability”, “accessibility” and “feature
enhancement” - that had an impact on operational effectiveness as well as online marketing
performance.
Attempts to specify interactivity beyond its conceptual definitions (Liu and Shrum 2002;
Zhao 2003) have led to measurement of interactivity effects in a variety of contexts. One of the
early pioneers was Fortin (1997) who examined interactivity within the context of banner
advertisements as did Cho and Leckenby (1999).. At the website level, Wu (1999)focused on
interactivity of entertainment websites; Ha and James (1998) chose interactivity of business
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websites; and Ghose and Dou (1998) studied interactivity of Internet Presence Sites (IPSs).
Raney et. al (2003) compared interactive websites with other forms of entertaining websites on
attitudes toward auto brands, auto websites and purchase intentions. Similarly, Coyle and
Thorson (2001) and Wu (1999) empirically tested the influence of website interactivity on users’
attitude toward the website.
Relationship between Store Attributes, Satisfaction, and Loyalty
Support for a positive satisfaction-loyalty relationship (Rust and Zahorik 1993) is also
evident for retail stores. For example, Bloemer and Ruyter (1998) have shown that customer
satisfaction is an antecedent to store loyalty while Baker-Prewitt and Sivadas (2000) found that
satisfaction positively affects store loyalty through repurchase intentions.
Even though the importance of customers’ length of store visit has been recognized in
both academia and practice, retailer loyalty is primarily measured through repeat patronage (e.g.
Sivadas and Baker-Prewitt 2000; Corstjens and Lal 2000). Morrison (2001), for example,
pointed out the role of store atmosphere in customer visit lengths; however, measurement
difficulties prevent its operational use.
Loyalty to a website is similar to loyalty to a retail store in the offline environment. In the
online environment, loyalty is frequently measured as repeat visits to websites. It is feasible,
however, to measure behavioral stickiness in terms of length of the time a user stays within a
website. Gillespie, et. al. (1999), focusing on the cognitive component of loyalty, defined loyalty
to a website as the degree to which it attracts users to stay at the site and to get users to return for
repeat visits. Crockett (2000) focused on the behavioral component of loyalty and argued that
the two dimensions of online loyalty are (1) the number of minutes visitors stay at a site and (2)
the frequency with which they return.
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Empirical research on relationships between online store attributes and satisfaction and
loyalty is limited. While Baker (1986) and Bitner (1992) proposed categories of attributes that
impact consumer responses to retailer cues, Eroglu, Machleit and Davis (2003) argue that these
typologies do not easily translate into the online world. Instead, they separate cues into high-task
and low-task relevant and attempt to relate their influence on satisfaction mediated through
responses such as pleasure and arousal. Similarly, Park and Kim (2003) propose a specific
concept of “information satisfaction” conceptualized as “an emotional reaction to the experience
provided by the overall information service” (p. 18) which is impacted by online attributes such
as “user interface quality”, “product information quality” etc. Limited research exists to support
a positive relationship between interactivity and satisfaction (Rafaeli 1988; Rafaeli and
Sudweeks 1997; Liu 2002; Liu and Shrum 2002; Dholakia et. al. 2001). For example, Liu and
Shrum (2002) argued that all three dimensions of interactivity - active control, two-way
communication, and synchronicity - are positively related to user satisfaction since
controllability leads to general psychological well-being, and two-way communication and
synchronicity decrease the frustration related to waiting and feeling of ignored. Liu (2002)
empirically proved the positive impact of interactivity on satisfaction in an online environment.
The literature review above suggests that our knowledge regarding online store attributes
and their effects is still evolving. There is no consensus regarding store attributes or the process
by which they impact satisfaction and loyalty. Some of the research have focused on mediating
variables such as pleasure and arousal (Eroglu et. al 2002); others have used specific definitions
of satisfaction such as information satisfaction which is distinct from “overall satisfaction that
refers to the consumers’ overall evaluation.” (Park and Kim 2003). The following study is an
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attempt to shed additional insights into the relationships between website attributes and their
effects on customer satisfaction and loyalty using secondary data.
An Empirical Investigation of Website Attributes and Their Effects on Customer Satisfaction and Loyalty
An empirical study was designed to test whether retail store site attributes affect users’
satisfaction with and loyalty to the website. Secondary data, collected at the online store level,
were compiled directly from www.bizrate.com in August 2003. Customer ratings on 1079
individual online stores were collected.
Secondary Data source
Bizrate (www.bizrate.com) collects, analyzes, and reports real customers’ online store
ratings. It combines consumer feedback from two different customer groups to create
comprehensive store ratings: a) directly from online customers as they make purchases; b) as
well as from a panel of Bizrate members who have volunteered to rate online stores.
After purchasing at a Bizrate affiliated website, each customer is asked to rate the website twice.
First, immediately after completing the online transaction, Bizrate asks a store's customer to
evaluate his/her attribute-level shopping experience (after check-out). Then, as an "after
delivery" follow-up, the customer is asked to rate the remaining shopping experience attributes,
overall shopping experience and revisit intention. An online store’s ratings are publicly reported
only when at least 30 customers have rated the store. Each rating is the weighted average of
evaluations from both customers and Bizrate members during the past 90 days.
Measures
Rating attributes and their explanations from www.bizrate.com are listed in Table 2.
Shoppers and panel members rated website-related attributes – eight, including “overall look and
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design of site” at “checkout” and seven, including satisfaction and loyalty “after delivery”. Each
measure is rated on a 1-10 scale.
Table 2: Attribute Ratings and Their Explanations in Bizrate
Rating Explanation Source A. Attribute Measures Ease of finding what you are looking for
How easily were you able to find the product your were looking for at checkout
Selection of products Types of products available at checkout
Clarity of product information How clear and understandable was the product information at checkout
Prices relative to other online merchants Prices relative to other web sites at checkout
Shipping charges Shipping charges at checkout Variety of shipping options Desired shipping options were available at checkout
Charges stated clearly before order submission
Total purchase amount (including shipping/handling charges) displayed before order submission
at checkout
Availability of product you wanted
Product was in stock at time of expected delivery after delivery
Order tracking Ability to track orders until delivered after delivery
On-time delivery Product arrived when expected after delivery
Product met expectations Correct product was delivered and it worked as described/depicted after delivery
Customer support Any post-purchase activity such as: questions, complaints, replacements, and returns
after delivery
B. Overall Measures
Overall look and design of site Overall look and design of the site at checkout
Would shop here again Likelihood to buy again from this store after delivery
Overall rating Overall experience with this purchase after delivery
Despite several disadvantages, secondary data can be quite useful. The major advantage
of using the Bizrate data is its external validity since it was collected from real customers making
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purchases at actual merchant sites. Retail sites for a large number of product categories are
included in the database and the ratings take place twice, although not on the same set of
attributes.
Analysis and Results
The primary analytical procedure used was regression analysis. First, multicollinearity
among the thirteen attributes was assessed using the variance inflation factors (VIFs). According
to Belsley, Kuh, and Welsch (1980), a VIF of less than 10 indicates lack of a significant
multicollinearity; all thirteen had a VIF of less than 10 and twelve of thirteen VIFs in our model
were less than 5, indicating a low level of mulitcollinearity. Factor analysis of 12 attributes
(excluding “overall look and design of site”) indicates that the time at which the measures were
taken contributed to the factor loadings; hence the two factors are labeled “at check out” and
“after delivery” (Table 3). The two factors explained 68 percent of the variance.
Table 3: Factor Analysis of Bizrate Store Attribute Ratings
Factor 1 “After Delivery”
Factor 2 “At Check Out”
Ease of finding what you are looking for .770
Selection of products .697
Clarity of product information .641
Prices relative to other online merchants .723
Shipping charges .669
Variety of shipping options .679 Charges stated clearly before order submission .746
Availability of product you wanted .781
Order tracking .901
On-time delivery .927
Product met expectations .773
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Customer support .893
Variance Explained 36.18% 32.02%
Regression Analysis
The first analysis involved examining the effect of individual attributes on “overall look
and design of site” measured at check out (Table 4). In drawing managerial implications for e-
stores from their study on brick-and-mortar stores, Baker et.al (2002) speculate that “design of e-
stores (e.g. appearance and layout of home pages) may affect e-shoppers’ perceived psychic
costs significantly and thus impact their propensity to shop at those stores” (p. 138).
Table 4: Online Store Attributes and Site Design Overall look and design of site
Ease of finding what you are looking for .48**
Selection of products -.02
Clarity of product information .40**
Prices relative to other online merchants -.16**
Shipping charges .02
Variety of shipping options .03
Charges stated clearly before order submission .09**
Adj. R2 .67
** p < .05
The regression analysis suggests that “ease of finding what you are looking for”, “clarity
of product information” and “charges stated clearly before order submission” significantly
impact evaluation of overall look and design of site. “Prices relative to other online merchants”,
has, however, a negative influence on overall look and design of site. “Selection of products”,
“shipping charges” and “variety of shipping options” do not appear to contribute to overall look
and design of site.
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To examine the impact of online store attributes on satisfaction and loyalty, the next
regression analysis included all the store attributes, including the ratings collected after delivery.
Several sets of regression analyses are conducted (Table 5).
Table 5: Relationship of Online Store Attributes And Customer Satisfaction and Loyalty
Overall satisfaction Loyalty
Overall Site Design .01 .03*
At Checkout factor .06** .03*
After Delivery factor .93** .91**
Overall Satisfaction .96**
Adj. R2 .93 .92 .88
* p < .05, ** p < .01
First, it is quite clear that overall satisfaction is the most important explanation of
behavioral intention (loyalty); the simple regression alone offers the strongest explanation of
consumers’ intentions to revisit a retail site. Second, the “after delivery” factor is very strongly
related to satisfaction as well as behavioral intention. In both these cases, the main reason is
likely the time of measurement – since these attributes were measured at the same time as the
two dependent variables and so there is a very strong temporal association. However, the
attributes measured at check out, so not temporally associated, are also significant although their
contributions are much smaller. It is also interesting to note that “overall site design” measured at
check out appears to make no difference on the satisfaction rating, but does impact behavioral
intention.
When we attempt to disaggregate the specific attributes and their contributions (Table 6)
we find that satisfaction is impacted most by “on-time delivery”; “product meeting expectations”
and “customer support” are also very important. For loyalty, “customer support” is most
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important followed by “product meeting expectations” and “on-time delivery”. “Availability of
product wanted” and “order tracking” are both significant but not as important as other items
rated also after delivery. Among the at-checkout attribute ratings, “charges stated clearly before
order submission” is significant for both dependent variables. “Clarity of product information”
and “variety of shipping options” are not significant for either of the two dependent variables.
Table 6: Disaggregating the Effects of Online Store Attributes On Customer Satisfaction and Loyalty
Satisfaction Loyalty
At Checkout Attributes
Ease of finding what you are looking for -.01 -.076* -.076** .014
Selection of products -.01 .086** .049** .027
Clarity of product information .013 .277** .018 .268**
Prices relative to other online merchants .019* -.04 .008 -.022
Shipping charges .035** -.001 .005 .023
Variety of shipping options -.014 .143** -.013 .147**
Charges stated clearly before order submission
.032** .260** .049** .242**
Overall look and design of site .024* .035** .073
After delivery attributes
Availability of product you wanted .105** .048**
Order tracking .038** .061**
Ontime delivery .398** .266**
Product met expectations .241** .286**
Customer support .245** .338***
Adj. R2 .94 .90
*p < .10, ** p < .05
There are other interesting differences. “Shipping charges” has a significant influence on
satisfaction, but not on loyalty; similarly, “prices relative to other online merchants”. However,
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the relationships are reversed for “ease of finding what you are looking for” and “selection of
products” which are significant for loyalty but not for satisfaction.
In order to determine how memory might have influenced the relationship between online
store attributes and satisfaction and loyalty, since the customer ratings occurred at two time
points, a second set of regression analysis was conducted with only the attributes rated at check
out. “Charges stated clearly before submission” remain important for both satisfaction and
loyalty; “clarity of product information” and “variety of shipping options” become significant
when only this set of attributes is considered. “Ease of finding what you are looking for” and
“selection of products” emerge significant for satisfaction and lose their significance for loyalty.
Discussion and Conclusion
From the analysis of the customer ratings, some conclusions emerge regarding the
influence of online store attributes on site design, satisfaction and repeat purchase intentions.
First of all, “ease of finding what you are looking for” and “clarity of product information” are
the two most important attributes for generating positive ratings of overall look and design of the
site. This is consistent with other research that have focused on the content and presentation of
product and service information (e.g. Park and Kim 2003). As Baker et al (2002) conclude,
design cues are the most significant and consistent influence on shopping experience costs and e-
stores have to similarly pay attention to design factors such as appearance and layout of home
pages.
The analysis also suggests that how specific attributes are operationalized are as
important as whether or not a specific attribute is included. Clearly, “charges stated clearly
before order submission” is very important – it influences overall look and design of site as well
as satisfaction and loyalty. However, another cost-related information, “prices relative to other
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online merchants” is not at all important in the customer ratings of retail sites. Similarly, it
appears providing a “variety of shipping options” does not influence overall look and design of
site, satisfaction or loyalty ratings; however, specifying “shipping charges” does impact
satisfaction.
When there is a time gap between interacting with a site and evaluating the experience or
indicating revisit intentions, not all dimensions of the interactions persist in their impact.
“Charges stated clearly before order submission” is clearly very important – it is significant
when we look at its impact on site design (measured concurrently), on satisfaction and loyalty
(measured later). “Clarity of product information” and “variety of shipping options” are
significant for both satisfaction and loyalty only when the set of attributes measured at check out
is considered; this suggests that their salience gets drowned by attributes measured concurrently
with satisfaction and loyalty. “Ease of finding what you are looking for” and “selection of
products” (site design factors) have different relationships to satisfaction and loyalty suggesting
that recall of these attributes follow a different path than the other attributes.
Methodological issues need to be considered in the interpretation of the results. While the
customer ratings were acquired twice, the temporal association of the second set of attribute
ratings with the dependent variables seems to be the primary reason for the observed
relationship. It would have been useful to obtain measures of satisfaction and loyalty (via
intentions) also at the time of check out; this would have allowed capturing customer evaluations
immediately after interacting with the site.
Once the customer rated the online store after delivery, it is not surprising that
“fulfillment” variables such as “on time delivery”, “product met expectations” became the
dominant attributes influencing online store ratings. These fulfillment variables are biggest
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challenges to all non-store retailing, including internet retailing. In the physical stores, customers
can touch and examine products before they buy, and can take possession of them once they
make a purchase. However, buyers cannot see, touch and take immediate possession online;
Therefore, it is very important to receive delivery of the expected products at the expected time.
To satisfy online buyers and attract them to repurchase, a website should control out-of-stock
conditions, enable customers to track orders online, deliver on time, ensure that the products
actually match the descriptions on the site, and offer timely support to customers with questions
and problems. This suggests that the most creative, interactive, vivid online site won’t
compensate for weak fulfillment and customer support capabilities.
Limitations and Future Directions
Using secondary data from Bizrate had several limitations, but the following are most
relevant for this analysis. There are more attributes in a transactional website than the attributes
selected by Bizrate; therefore, the analysis could focus on only those selected attributes. Despite
some literature on interactivity as a key attribute, the Bizrate set of attributes can only be linked
to this concept in a limited way. This restricts our ability to relate the findings with the available
literature.
Second, the two dependent variables - satisfaction and loyalty - were both measured with
a one-item scale. Multiple-item scales would have provided more reliability. Eroglu et. al
(2003), for instance, used 4 items to measure satisfaction (alpha=.81) but their research design
involved a hypothetical site and 48% of the respondents had never purchased online. Given the
attractiveness of Bizrate data involving real customers and real retail sites, a longer scale with
multiple items for constructs and additional attributes, would have probably depressed
completion rates.
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The study design did not include any variables that may have acted as potential
mediators; Eroglu et.al (2002) measured pleasure and arousal which can be more directly related
to site design variables. Similarly, Park and Kim (2003) used “information satisfaction” to
mediate the relationship between specific site related variables and “site commitment”. Future
research would have to make the trade-offs between internal and external validity.
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The creation of this working paper serieshas been funded by an endowmentestablished by William A. Orme, URICollege of Business Administration,Class of 1949 and former head of theGeneral Electric Foundation. This workingpaper series is intended to permit facultymembers to obtain feedback on researchactivities before the research is submitted toacademic and professional journals andprofessional associations for presentations.
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