This paper summarizes “Exploring the Effects of “What” (Product) and “Where” (Website) Characteristics on Online Shopping Behavior” by Mallapragada, Chandukala and Liu. The article was published in Journal of Marketing in 2016. The aim of the paper is to ascertain the influence of product character (utilitarian or hedonic) and website character (such as website design, layout, functionality, etc.), determine the amount of money spent for online purchase, which the authors call online transaction “basket value” (Mallapragada, Chandukala and Liu 21).
The literature review presented in the article shows that consumer online purchase is divided into two stages – browsing stage and purchase stage. The purchase decision and the basket value have a direct relationship with the consumer’s page view and visit duration. Consumers browse web pages to meet their shopping goal. This increases the importance of the product category. The literature review shows that depending on nature of the product – hedonic or utilitarian – the consumers decide whether to buy it of not. In the case of the hedonic products, the purchase decision is influenced by emotion and in the case of utilitarian products, it is based on reason (Mallapragada, Chandukala and Liu 24).
Further, the scope of the retailer will determine the basket value. For instance, in the case of Amazon, which is a broad-scope retailer, the consumer will have a higher overlap shopping as they provide better price deals and a large number of goods available in one place thus increasing a propensity to buy. This increases the basket value of a particular purchase (24). Thus, the basket value is expected to be higher in the case of broad-scope retailers, irrespective of the product category (24-25).
The model developed is based on the mixed-effects Type II Tobit model with a system of equations that help to explain the variation in the basket value (Mallapragada, Chandukala and Liu 30). Data for analysis are collected from ComScore Web Browser panel for 773,262 individual browsing sessions in 2011 (25). 9664 of them resulted in a purchase (25). The statistical data provided highlights 43 product categories in 385 online retailer stores (25).
The results show that the past behavior of the consumer is a consistent predictor of the purchase decision (Mallapragada, Chandukala and Liu 32). Further, there is a definite evidence of loyalty of consumers even for online purchases (32). The research findings show that broad scope retailers have a greater probability of attracting more customers which naturally leads to boost in sales (32). A negative relationship is established between hedonic product character and navigational functionality, which is probably due to the distraction caused by a navigational functionality as it steers consumers to various aspects of the websites (33). Thus, higher navigation functionality reduces the basket value in case of hedonic products. Conversely, it increases the value of utilitarian products (33).
The study has significant implications for the online purchase behavior of consumers. If website design of product assortment is changed frequently, it is likely to have a negative impact on the basket value, disregarding any models or plans. Such changes often are the root cause of customer’s frustration (Mallapragada, Chandukala and Liu 34). Research shows a 4.9% decrease in the basket value for hedonic purchase and 3.1% decrease in utilitarian purchases due to a unit change in the hedonic/utilitarian characteristics of the product. Further, the website’s product scope has a positive relation with the visit duration and the basket value (34).
There is a 2.9% increase in the basket value for broad-scope retailers (Mallapragada, Chandukala and Liu 34). It also shows a negative correlation between the communication functionality and the purchase probability, but also feature positive relation to the visit duration (34). However, communication functionality has a positive relation with purchase probability, the basket value, and visit duration (34).
Work Cited
Mallapragada, Girish, Sandeep R. Chandukala and Qing Liu. “Exploring the Effects of What (Product) and Where (Website) Characteristics on Online Shopping Behavior.” Journal of Marketing 80 (2016): 21-38. Print.