Clicks to conversion: the value of product information and price incentives

Abstract

Journal ArticleThis study uses clickstream data obtained from a large online durable goods retailer to examine how different types of information - product-related and price-related information provided by retailers - impact purchase-related outcomes for consumers. Using mixture-modeling techniques to analyze latent differences among customers, we find that consumers fall under three distinct categories - directed shoppers, deliberating researchers and browsers. In examining the impacts of information on purchase outcomes, we find that product and price-related information impacts consumers in these three shopping states differently. While product information highlighting features of product alternatives in a category has the strongest impact on deliberating researchers, specific price incentives related to category-level discounts increases the likelihood of purchase for both directed shoppers as well as browsers. Price incentives relating to site-wide free shipping have a positive impact on purchase for all consumers. Surprisingly, category-level discounts have a negative impact on deliberating researchers, while rich product information hampers the purchase process of directed shoppers. We discuss the managerial implications of our findings and the role of clickstream analytics in designing dynamic targeting and information provisioning strategies for online retailers