How targeting affects customer search: A field experiment

Research output: Contribution to journalArticlepeer-review

12 Scopus citations

Abstract

It has become common practice for retailers to personalize direct marketing efforts based on customer transaction histories as a tactic to increase sales. Targeted email offers featuring products in the same category as a customer's previous purchases generate higher purchase rates. However, a targeted offer emphasizing familiar products could result in curtailed search for unadvertised products, as a closely matched offer weakens a customer's incentives to search beyond the targeted items. In a field experiment using email offers sent by an online wine retailer, targeted offers resulted in decreased search activity on the retailer'swebsite. This effect is driven by a lower rate of search by customers who visit the site, rather than a lower incidence of search. There are several ways this could potentially hurt retailers and consumers, such as reduced cross-selling and fewer opportunities for customers to explore new products.

Original languageEnglish (US)
Pages (from-to)2353-2364
Number of pages12
JournalManagement Science
Volume63
Issue number7
DOIs
StatePublished - Jul 2017
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research

Keywords

  • Advertising and media
  • Electronic commerce
  • Field experiment
  • IT policy and management
  • Marketing
  • Promotion
  • Retailing and wholesaling

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