Product-Oriented Web Technologies and Product Returns: An Exploratory Study
30 Pages Posted: 4 Jun 2012 Last revised: 21 Aug 2014
Date Written: March 1, 2013
Internet retailers have been making significant investments in web technologies, such as zoom, alternative photos, and color swatch, that are capable of providing detailed product-oriented information and, thereby, mitigating the lack of “touch-and-feel,” which, in turn, is expected to lower product returns. However, a clear understanding of the relationship between these technologies and product returns is still lacking. This study attempts to fill this gap by using several econometric models to explore this relationship. Our unique and rich dataset from a women’s clothing company allows us to measure technology usage at the product level for each consumer. The results show that, in this context, zoom usage has a negative coefficient, suggesting that a higher use of the zoom technology is associated with fewer returns. Interestingly, we find that a higher usage of alternative photos is associated with more returns and perhaps more importantly, with lower net sales. Color swatch, on the other hand, does not seem to have any effect on returns. Thus, our findings show that different technologies have different effects on product returns. We provide explanations for these findings based on the extant literature. We also conduct a number of tests to ensure the robustness of the results.
Keywords: online shopping, product returns, type of information, product-oriented technologies, econometric models
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