Nav: Home

Do we really buy 'Top-Rated' deals online? New research may surprise you

July 11, 2018

Key Takeaways: The position of a product in a website ranking (i.e. Amazon or Expedia) does influence how consumers search, but in many cases, it does not have an additional effect on their actual purchase decisions; online product rankings reduce the consumer costs associated with searching for a service or product; and consumers save money because of their reduced search costs even if their choice was not high in the online rankings they examined.

CATONSVILLE, MD, July 11, 2018 - Anyone who shops online is familiar with those 'top-rated' products or services that rise to the top of their search on e-commerce intermediary sites like Amazon or Expedia. So, do those rankings really help those products or services get sold?

According to a new study, the answer is, "yes" and "no."

Raluca M. Ursu, of the Stern School of Business at New York University, conducted the research for the study, "The Power of Rankings: Quantifying the Effect of Rankings on Online Consumer Search and Purchase Decisions," which is published in the July edition of INFORMS journal Marketing Science.

The study found that products with high online rankings have a causal effect on what consumers search, but those rankings do not necessarily affect purchase decisions directly. Search intermediaries like Amazon and Expedia use rankings to influence purchases but only secondarily to their search decisions. The article emphasizes the importance of optimizing the search process, distinguishing it from assumptions that consumers are likely to make purchase decisions solely on a product's or service's high rankings.

In conducting her research, Ursu analyzed rankings and search data from a field experiment at Expedia, where she sought to clarify the causal effect of rankings on consumer search and purchase decisions. She then sought to quantify the effect of rankings on consumer search costs, and in the end, to show how rankings built on her research model's estimates can benefit consumers in the future.

"Constructing relevant rankings requires understanding of their causal effect on consumer choices," said Ursu. "For search intermediaries like Amazon and Expedia, measuring the causal impact of the ranking and separating it from the intrinsic quality of the product ranked, allows them to place relevant products at the top of the ranking, rather than ones that were chosen more frequently merely because of their past rank."

"This helps consumers find better-matching products more quickly, which in turn, benefits the search intermediary (Amazon or Expedia) through increased conversions and a higher probability of repeat visits."

More consumers than ever are shopping online, and as they do, e-commerce sites are working to enhance and optimize the online shopping experience through the use of model predictions based on optimal search order, data patterns, and data sets that use randomized control experiments to reveal the causal effect of variables of interest.

Consumers may notice this when intermediary sites inform them that, "Customers who bought this item also bought..." or "People who searched for this item also searched for..."

"The search for a product or a service can be very costly in terms of time and money for any consumer," said Ursu. "That is where online search intermediaries have found their greatest value, helping to efficiently match consumer needs with the most relevant product or service they are seeking. The goal of this research is to help identify the factors that can be used by intermediaries to provide even greater consumer benefit in the future."
-end-
The full study is available at https://pubsonline.informs.org/stoken/default+domain/MKSC-PR-07-2018/full/10.1287/mksc.2017.1072.

About INFORMS and Marketing Science

Marketing Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at http://www.informs.org or @informs.

Institute for Operations Research and the Management Sciences

Related Consumers Articles:

What's in a name? For young Chinese consumers, it's about culture mixing
Younger, more cosmopolitan Chinese consumers tend to favor brand translations that keep both the sound and the meaning of the original name, says U. of I. business professor and branding expert Carlos J.
Why do consumers participate in 'green' programs?
From recycling to reusing hotel towels, consumers who participate in a company's 'green' program are more satisfied with its service, finds a new study co-led by a Michigan State University researcher.
Consumers care about carbon footprint
How much do consumers care about the carbon footprint of the products they buy?
Consumers have huge environmental impact
You won't make big cuts in your environmental impact by taking shorter showers or turning out the lights.
Consumers' preferences for foliage plant attributes
Experiments investigated the effect of plant attributes on consumers' likelihood of purchasing indoor foliage plants.
New study finds adult fresh pear consumers had a lower body weight than non-pear consumers
The epidemiologic study, led by Carol O'Neil of the Louisiana State University Agricultural Center, used a nationally representative analytic sample to examine the association of fresh pear consumption with nutrient intake, nutrient adequacy, diet quality, and cardiovascular risk factors in adults.
How much do consumers know about new sunscreen labels?
Sunscreen labels may still be confusing to consumers, with only 43 percent of those surveyed understanding the definition of the sun protection factor value, according to the results of a small study published in a research letter online by JAMA Dermatology.
Saving money: Do consumers spend less if they think about the future?
Why is it so hard for consumers to save money?
When are consumers more likely to rely on feelings to make decisions?
Why do some consumers make choices based on their feelings instead of rational assessments?
How are ordinary consumers transforming the fashion business?
One of the most important shifts of the 21st century is the ability of consumers to participate in markets they love such as music and fashion.

Related Consumers Reading:

Consumers
by Godspeed Publishing

Following Christ in a Consumer Society: The Spirituality of Cultural Resistance
by John F. Kavanaugh (Author)

Consumer Reports Magazine April 2018 Auto Issue
by Consumer Reports (Publisher)

Consumer Behavior: Buying, Having, and Being (12th Edition)
by Michael R. Solomon (Author)

Consumer Mathematics student workbook
by AGS Secondary (Author)

Consumer Behavior
by Wayne D. Hoyer (Author), Deborah J. MacInnis (Author), Rik Pieters (Author)

A Consumer's Dictionary of Cosmetic Ingredients, 7th Edition: Complete Information About the Harmful and Desirable Ingredients Found in Cosmetics and Cosmeceuticals
by Ruth Winter (Author)

China's Super Consumers: What 1 Billion Customers Want and How to Sell it to Them
by Savio Chan (Author), Michael Zakkour (Author)

Decoding the New Consumer Mind: How and Why We Shop and Buy
by Kit Yarrow (Author)

Marketing to the Entitled Consumer: How to Turn Unreasonable Expectations into Lasting Relationships
by Nick Worth (Author), Dave Frankland (Author), Josh Bernoff (Author)

Best Science Podcasts 2018

We have hand picked the best science podcasts for 2018. Sit back and enjoy new science podcasts updated daily from your favorite science news services and scientists.
Now Playing: TED Radio Hour

Where Joy Hides
When we focus so much on achievement and success, it's easy to lose sight of joy. This hour, TED speakers search for joy in unexpected places, and explain why it's crucial to a fulfilling life. Speakers include inventor Simone Giertz, designer Ingrid Fetell Lee, journalist David Baron, and musician Meklit Hadero.
Now Playing: Science for the People

#499 Technology, Work and The Future (Rebroadcast)
This week, we're thinking about how rapidly advancing technology will change our future, our work, and our well-being. We speak to Richard and Daniel Susskind about their book "The Future of Professions: How Technology Will Transform the Work of Human Experts" about the impacts technology may have on professional work. And Nicholas Agar comes on to talk about his book "The Sceptical Optimist" and the ways new technologies will affect our perceptions and well-being.