If you have ever shopped online, you must be familiar with the products that appear on top of your search queries and are often “top-rated”. Do these rankings, on almost every e-shopping website like Amazon, eBay actually raise the sales for these products? A new study claims that the answer might be both yes and no.
Raluca M. Ursu, from the Stern School of Business at New York University, conducted the study called “The Power of Rankings: Quantifying the Effect of Rankings on Online Consumer Search and Purchase Decisions,” which has been published recently in the journal Marketing Science.
The results of the study show that products which were rated highly online do have a ‘casual effect’ on what customers were looking for but they did not necessarily affect the purchases made by the customers. Amazon and Expedia -whom the research team called “search intermediaries”- use rankings to prompt customers to buy certain things but this is secondary to the search decisions.
The study talked about how companies should be focusing on search optimization- differentiating it from this idea that customers will likely buy the products based only its rankings.
For the study, Ursu analysed rankings and search data from a previously done field experiment at Expedia. She tried to see how rankings affected the search and purchase decisions of customers. She then tried to figure out how the rankings influenced consumer search costs and also how rankings that were built on her research model will help consumers in the future.
“Constructing relevant rankings requires understanding of their causal effect on consumer choices. 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”, said Ursu.
“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”, she added.
More and more people are choosing to shop online and to make their experience a good one- e-commerce sites are working constantly to optimize their services by taking the help of model predictions based on optimal search order, data patterns, and data sets that employ randomized control experiments.
This is especially noticeable when sites inform their customers 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,” concluded 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.”