It's not only what they buy,it's also what they keep: Linking marketing instruments to product returns

Online retailers implement various marketing instruments to boost their sales. These marketing instruments can not only impact sales, but also product returns. However, when assessing the performance of marketing instruments, retailers often ignore potential return effects. Theoretically, marketing instruments could increase or decrease returns, depending on how they affect expected and experienced costs and benefits related to a product. In this paper, we empirically examine whether, and how a comprehensive set of marketing instruments (newsletters, catalogs, coupons, free shipping, paid search, affiliate advertising and image advertising) affects product returns. We use data from two major online retailers and show that return effects vary largely across marketing instruments. Surprisingly, none of the instruments reduces product returns. Newsletters, paid search, catalogs and free shipping increase returns substantially by up to 18%. For free shipping and catalogs, the return effects emerge prevalently for fashion categories, whereas online advertising and newsletters increase returns of both fashion and non-fashion products. These findings enhance our understanding of how firm-initiated marketing instruments affect returns and provide guidance for online retailers in multimedia environments.     

The merchants of meta: A research agenda to understand the future of retailing in the metaverse

Due to rapid technological developments, the metaverse is quickly garnering attention from all areas of retailing. With a projected market of $800 billion by 2024, the metaverse is expected to radically reshape retailing in the digital world. However, very little is known about the metaverse from a customer, retailer, or brand perspective.This article summarizes how the metaverse has been conceptualized thus far in the literature and the popular press. The authors offer a new conceptualization of the metaverse that contains four distinct dimensions: online collaboration, high consumer immersion, unique digital assets, and digital personas.Considering that the technologies currently used to provide high consumer immersion (e.g., augmented reality, virtual reality) and unique digital assets (e.g., blockchain technology) are not fully developed or commercialized, the authors also propose the concept of a transitory metaverse to understand the current stage of metaverse development better.The authors conclude by providing 27 directions for future research based on a full factorial of how the metaverse dimensions amplify three customer touchpoints in the digital experience (digital economic exchange, complex social relationships, direct environment interaction) for the three main stakeholders of any retailing exchange (consumers, retailers, brands) along the entire customer journey (pre-purchase, purchase, post-purchase).     

Do offline and online go hand in hand? Cross-channel and synergy effects of direct mailing and display advertising

Despite the rise of digital, direct mailing as a marketing communication tool remains relevant and widely applied in practice. Nevertheless, research into the effectiveness of direct mailing in the online environment is scant. Key questions that remain entail how direct mails affect different online and offline consumer activity metrics throughout the purchase funnel and how they interact with digital marketing communication tools. The current paper, therefore, investigates these two questions by conducting two studies. First, we focus on the effect of direct mailing on zip-code level upper, middle, and lower funnel performance metrics over time by analyzing quasi-experimental data from a large European insurance firm. The results reveal that direct mailing significantly influences consumer activity metrics in the online channel (i.e., online search and clicking behavior), in support of cross-channel effects of direct mailing. Moreover, direct mailing is shown to be effective throughout the purchase funnel, both directly and indirectly, with a positive net sales effect. Second, we study the joint effect of direct mailing and display advertising by analyzing field experiment data from the same insurance firm. The results show positive synergy between direct mailing and display advertising. Therefore, despite the rise of digital, direct mailing still serves as an effective marketing tool, both by itself and in combination with digital marketing.     

Is Online Word of Mouth Higher for New Models or Redesigns? An Investigation of the Automobile Industry

Changing consumer preferences, entry of new competitors with better products, and product improvements by existing competitors make new products a necessary investment for most companies. In addition to the investments in R&D and production of new products, firms also need to invest in advertising to promote them. The growing use of social media by consumers therefore makes online consumer conversations an attractive additional format for firms to promote products at a lower cost. This is particularly so in the automobile industry where advertising costs are very high. Whether consumers discuss a newly introduced product, and help to promote it, however, may depend on how new the product is. This is the question that we investigate in the context of the automobile category. Specifically, we examine whether online consumer conversations are more likely for new models (e.g., Chevy Volt introduced in 2010) or redesigns of existing models (e.g., the redesign of Chevy Impala in 2010). We use data from two online sites where consumers discuss automobiles – consumerreports.org and edmunds.com – for our analysis. Our empirical investigation also accounts for the effects of sales on word of mouth and the simultaneity between sales and word of mouth. Additionally, we also consider the effect of satisfaction on word of mouth and the endogeneity of satisfaction. Our results across two datasets suggest that redesigns stimulate significantly more conversations than new models. Managerial and research implications of the findings are discussed.     

Newspapers' Content Policy and the Effect of Paywalls on Pageviews

This paper examines the impact of newspaper paywalls on daily pageviews, and how their impact varies across newspapers as a function of their content provisioning strategies. Our data consist of daily pageviews of 42 newspapers that introduced a paywall during the eight-year analysis period from January 1, 2010 to December 31, 2017. We find that a paywall has a negative impact on daily pageviews for most newspapers, but that the impact varies significantly across them. Newspapers that publish proportionately more articles on politics, business/economics, sports, and general social news tend to perform better with a paywall than newspapers that publish proportionately fewer articles on those topics. Interestingly, the effectiveness varies substantially across news topics. For example, increasing the proportion of business/economics news by 1% is nearly 1.4 times more effective than increasing the proportion of general social news by the same percentage in mitigating the negative impact of a paywall. We also find that newspapers with proportionately more unique content and papers with a more liberal slant experience a smaller drop in pageviews. These results have important managerial implications for newspapers—especially pure-play online news publishers (for whom online advertising is the primary revenue source)—regarding how to develop and manage their content policy with paywall adoptions.     

Cross-channel effects of omnichannel retail marketing strategies: A review of extant data-driven research

The authors review 50 empirical retailing research papers that have appeared over the last 20 years to take stock of what we know, need to know better, and do not know yet about within-retailer cross-channel effects of omnichannel retail marketing strategies on (a) consumer responses over their purchase journeys, i.e., online and/or offline search, purchase intention, frequency, amount, returns, loyalty, and (b) the retail firm's aggregate outcomes (e.g., sales, costs, profits, product returns) by channel and overall. Specifically, the authors focus on five strategies: (1) the addition of online channel by an offline retailer; (2) the addition (or subtraction) of offline channels by an online retailer; (3) addition of mobile shopping channel (website and/or app) by offline and/or online retailer; (4) cross-channel integration strategies; and (5) retail marketing mix strategies. The author/s integrate findings from empirical research on these strategies into a number of ‘insights’ about ‘what we know’. Prominent among these are the following: Adding a transactional online channel to an offline channel improves the retailer's overall sales even though offline channel sales can be cannibalized to some degree. Adding an offline channel by an online retailer, however, boosts online channel sales as well as overall sales of the retailer. Similarly, adding a mobile shopping channel usually increases customer purchase frequency and amount and overall sales of the retailer in the long-term. Strategies for greater cross-channel integration generally have a positive effect on a retailer's overall performance while online advertising has positive effects on offline channel consideration and sales as well as overall sales of a multichannel retailer. Other insights or findings that need further study or open questions are also identified. The paper closes with managerial implications of the derived empirical insights, and suggestions for future research.     

Consumer Product Redistribution

Abstract

Formats for product redistribution are emerging and evolving, creating alternative channel options for consumers' disposition of unwanted possessions. These retail formats operate in both informal (e.g., garage sales) and formal (online auctions) economies. As consumers participate in redistribution channels, some retailers are confronted with new competition and the potential for declining sales. This article expands on both recycling and disposition literature by examining consumer disposition behavior and the flow of used products through various redistribution channels. Strategies are offered to address consumer disposition behaviors as well as to assist retailers in combating traditional and non-traditional competition.     

Exploring the influence of online reviews and motivating factors on sales: A meta-analytic study and the moderating role of product category

Online reviews, which significantly influence product sales, have been a central research topic in the field of marketing. Meanwhile, some motivating factors related to online retailers have been linked to product sales. While several articles have examined the impact between online reviews and motivating factors on product sales, many of the conclusions drawn are contradictory. From 28 studies focusing on online reviews and sales, this study performs a meta-analysis to analyze the true impacts of six review-related factors (i.e., the number of reviews, star ratings, standard deviation of ratings, helpfulness, review length and sentiment), and two motivating factors (i.e., price discounts and special shipping) on product sales. Meanwhile, this paper also studies how one product-related factor (i.e., product age) and one reviewer-related factor (i.e., reviewer's reputation) influence the relationship between online reviews and product sales. In addition, to study the moderating effect of product category, we divide the selected literature into two subgroups which are search and experience products. The results indicate that only review length and special shipping have no significant impact on product sales, while product category has a valid and specific moderating effect on the relationship between these determinants and sales. The presented conclusions will have important implications for academic research and for future industry practice.     

Acquiring customers through online marketplaces? The effect of marketplace sales on sales in a retailer's own channels

Online retailers are increasingly using third-party online marketplaces (e.g., Amazon, Taobao) as an alternative sales channel to their website. While cross-channel sales elasticities have been established for many sales channel combinations (e.g., adding bricks to clicks), we lack an understanding of whether the use of third-party marketplaces grows or cannibalizes a retailer's sales. Practitioners argue that firms can build their e-commerce business through acquiring customers by selling on the marketplace. Indeed, a marketplace could complement a retailer's offering (e.g., acquiring new customer segments), although inventory effects might mitigate this complementarity. Alternatively, cannibalization might occur from losing customers from one's website to the online marketplace. The present research investigates which of the two opposing forces prevails using a time series of category sales data from one of the largest global marketplace sellers. The authors use vector autoregressive modeling to show that marketplace sales increase sales on a retailer's website (0.014% for every 1% in marketplace sales). This effect is strongest for categories with large choice and low product prices. Acquiring customers through the marketplace might be cheaper than through other sources (estimated at 24% of initial sales). However, online retailers should be aware that this strategy strengthens the marketplace and may have potential negative long-term consequences (e.g., through marketplace control of the customer relationship).     

网络口碑传播与数码产品销售研究

网络口碑传播对数码产品的销售工作有着显著的影响,通过不同传播形态流转的网络口碑对消费者的影响也各不相同。基于已有的研究成果,按照传播形态的不同对现有网络媒介进行划分,探讨不同传播形态之间发挥作用的差异。研究发现相比训话形态与注册形态,对话形态与协商形态的网络媒介对网络口碑受众的影响更深。     

“Retail is detail! Give consumers a gift rather than a bundle”: Promotion framing and consumer product returns

Retailers often use the promotion strategy of offering supplementary products (e.g., free gift, bundle) to attract consumers and increase sales. Despite the growing literature on the promotions that are differently framed but offer economically identical values, little research has examined the link between promotion framing and consumer product returns. The current article sheds light on this relationship, hypothesizing that a free gift promotion would be superior to a bundle promotion in reducing consumer product returns. The findings suggest that a gift‐framed promotion leads to a lower product return intention than an economically equivalent bundle promotion, because consumers tend to perceive more loss from giving up the gift‐framed (vs. bundle‐framed) deal. Further, this study examines a moderating role of brand familiarity (familiar vs. unfamiliar) and shows that the merits of free gift framing on product return intention via perceived loss are amplified (attenuated) when the promoted brand is familiar (unfamiliar). Overall, the investigations of this study imply that it is better to frame a promotion as a “free gift” than a “bundle” to increase perceived loss in returning the purchase and thus to decrease consumer product returns. This strategic intervention works especially when the gift is offered by familiar brands.     

Financial consequences of adding bricks to clicks

Many e-commerce retailers are adding “bricks to clicks” – that is, opening an offline channel in addition to their digital sales channel(s). Taking the perspective of such an online pure player, this research assesses the effects of offline channel additions on the financial performance (e.g., sales, profits) and customer behavior (e.g., basket size, return rate) in the extended channel network as well as the initial online channel of the retailer. Across two studies, one at the zip code level and the other at the customer level, we find that the channel addition of a fashion and lifestyle retailer is synergistic in terms of increasing not only overall sales but also profits. At the same time, the new offline channel does not significantly cannibalize the existing online shop, as new customers are attracted through the channel addition. The effects of channel additions, however, are influenced by characteristics of customers gained before the channel addition and of the trade area around the newly opened stores: among existing customers, those who bought more in the online channel do not react as positively to the addition of an offline channel, and trade areas with socioeconomic characteristics that are often viewed as disadvantageous for digital retailing (e.g., an older population, lower average income) show a stronger positive sales effect of a brick-and-mortar addition. The attractiveness of the offline channel for these customer segments highlights that adding bricks to clicks might be most attractive for those customers who were previously unwilling to purchase from an online-only retailer.     

If You Blog,Will They Follow? Using Online Media to Set the Agenda for Consumer Concerns on “Greenwashed” Environmental Claims

Agenda-setting theory is used to investigate if consumers' online opinions on “greenwashed” advertisements (misleading green advertisements) are influenced by the agenda set by online newspaper articles and environmental nongovernmental organization (NGO) blogs. Leximancer is initially used to obtain attributes and identify themes from four different online stakeholder discussions on greenwashing. Content analysis and cross-lagged correlations are further used to verify if blogs and news articles set the substantive attribute salience in the consumer discussions over a 12-month period (January–December 2009). We found two significant themes in the various stakeholder discussions on greenwashing: marketing communication credibility and impact on natural environment. Results also indicate a bidirectional agenda-setting relationship between consumers and other stakeholders from the same country.     

Human-like bots are not humans: The weakness of sensory language for virtual streamers in livestream commerce

In the last few years, virtual streamers (i.e., digital characters with human-like appearances) have been heavily utilized in the field of livestream commerce. This work examines how virtual streamers’ use of sensory language (e.g., words like “tasty” and “smooth” that engage the senses) shapes consumer responses to the sponsored products. A multi-method investigation, combining three online scenario-based experiments and one focus group, demonstrates that sensory language leads to a decrease in purchase intention. This negative effect is driven by the violation of language expectancy, which states that sensory language should not be used because bots cannot actually use and experience products. However, the effect changes from negative to positive when viewers realize that a virtual streamer is controlled by a human operator instead of an artificial intelligence program. These findings shed light on how language shapes consumer responses to virtual streamers as well as how to enhance virtual streamers’ success in livestream commerce.     

Assessing cross-cultural marketing theory and research

A content analysis of 99 articles focuses on the comparative cross-cultural marketing research in 14 leading marketing and business journals from 1990 to 2008. The content analysis indicates strong growth in cross-cultural studies, especially in terms of studies on consumer attitudes and behavior and on promotion-related topics. This study classifies articles according to a series of conceptual (e.g., cultural dimensions employed in the study) and methodological (e.g., use of analytical technique) criteria. Although researchers have advanced in both conceptual and methodological respects, the studies still focus strongly on the dimensions from Hofstede (2001); methodologically, the dominance of two-country studies is problematic. Further, survey data from North America and Europe and researchers based and trained in North America and Europe are still dominant in the research field.     

The determinant of customer profitability on the financial institution

This paper aims to examine the influences of personal attributes of salaried customers, product transaction strategies, and sales personnel as three dimensions on the profitability contributed by customers in the wealth management business of the banking industry. The multiple regression analysis is performed for an empirical test. The results show that four variables, i.e. the quantity of the products held, purchasing frequency of investment products, level of financial advisers, and degree of customers' satisfaction have significantly positive influences on the profitability contributed by customers. This paper provides a reference for the financial industry to formulate the management strategies targeting at the optimal customers in wealth management.     

Disentangling the effect of services on B2B firm value: Trade-offs of sales,profits, and earnings volatility

In the face of declining business and growing pressures from low-cost competitors, many business-to-business (B2B) manufacturers have moved from their previously successful product-centric strategies to more service-oriented business models. Yet despite their substantial investments in services, firms fail to understand the performance ramifications of these offerings. With a longitudinal data set (2001–2016) of 227 B2B manufacturers listed in the S&P 1500 index, this study disentangles the simultaneous effects of financial-based mechanisms that link the service ratio (i.e., share of a firm's revenue generated from selling services) to firm value. The findings reveal significant trade-offs across these mechanisms. Although the service ratio monotonously boosts sales growth, it has U-shaped curvilinear relationships with profitability and earnings volatility. These effects also depend on industry- and firm-level factors. Industry maturity positively moderates the effects of the service ratio on sales growth and profitability. However, business scope has an adverse effect on the service ratio–profitability relationship. Finally, industry turbulence negatively moderates the effect of services on earnings volatility.     

A proposed model of online consumer behavior: Assessing the role of gender

This research examined the influence of Internet experience and web atmospherics on consumer online behavior. It developed a model of web navigation behavior where these antecedent variables drove website exploratory behavior and website involvement, which in turn, drove site attitudes and pre-purchase evaluations. These relationships were tested and confirmed in the context of a pharmaceutical website. Further, men and women differed in web navigation behavior, with men engaging in less exploratory behavior and developing less website involvement than women. However, across the two sexes, entertainment, challenge, and effectiveness of information content were the key drivers of website attitudes. The findings provide several guidelines for online communication strategy.     

The impact of market orientation on product innovativeness and business performance

The paper reports a study of the impact of market orientation on business performance. The use of product innovativeness is proposed as a mediator of the influence of market orientation on business performance. Product innovativeness is defined along two dimensions: use of new-to-the-firm and use of new-to-the-market products. Business performance was represented by relative price premium, sales growth, capacity utilization, and profitability. The findings provide support for the positive influence of market orientation on both dimensions of product innovativeness. However, only use of new-to-the-market products turns out to be a positive contributor to business performance.     

The effect of default options on choice—Evidence from online product configurators

Many firms use product configurators to enable customers to specify their desired products online. In such systems, defaults are pre-specified for levels of product features by the manufacturer or dealer. For example, when configuring a racing bike online, a default is predefined (e.g., the Shimano Ultegra model) for all required features (e.g., the gearshift levers). Such defaults, which may even adapt to previous choices, ensure that a functional and fully defined product emerges at the end of the configuration process. However, when designing sales systems, companies often fail to realize that these defaults also affect customer decision-making. We demonstrate the effect by a study that makes use of a fully simulated racing bike configurator. We find the following results: Moving the default of one feature (e.g. wheels) from the lowest to the highest level results in an increase in sales. In addition, the feature level defined as the default also acts as a reference point by increasing the sales of levels near to it. In order to maximize sales, the default should be set at the level of a feature that is between the medium and the highest price level. To conclude we discuss how manufacturers and dealers subtly yet powerfully influence the decision-making process with their sales systems.