The Value of Fit Information in Online Retail: Evidence from a Randomized Field Experiment

30 Pages Posted: 23 Oct 2015 Last revised: 30 Oct 2015

See all articles by Santiago Gallino

Santiago Gallino

University of Pennsylvania - Operations, Information and Decisions Department

Antonio Moreno

Harvard University - Technology & Operations Management Unit

Date Written: October 21, 2015

Abstract

With the growing relevance of online channels, retailers are exploring new ways in which they can overcome the impediments associated with selling products with non-digital attributes, such as apparel, without customers having physical access to products. Virtual fitting-room technologies can provide information about how a product fits a particular customer in a novel way and mitigate the stress that the existing information gap generates in the retailer’s supply chain. By implementing a series of randomized field experiments, we study the value of virtual fit information in online retail. Customers are randomly assigned to a treatment condition where virtual fit information is available or to a control condition where virtual fit information is not available. Our results show that offering virtual fit information increases conversion, basket sizes, average price of purchased products, and revisits to the site, while reducing fulfillment costs arising from returns and home try-on behavior, e.g., customers ordering multiple sizes of the same product. Furthermore, we find the effects are more intense for products that are more expensive and those with more sizes available. We discuss the consequences and implications for the online retailers' supply chains.

Keywords: Supply chain information, Supply chain innovation, Fit uncertainty, Online retail, Randomized field experiment, Virtual fitting room

Suggested Citation

Gallino, Santiago and Moreno, Antonio, The Value of Fit Information in Online Retail: Evidence from a Randomized Field Experiment (October 21, 2015). Available at SSRN: https://ssrn.com/abstract=2677404 or http://dx.doi.org/10.2139/ssrn.2677404

Santiago Gallino (Contact Author)

University of Pennsylvania - Operations, Information and Decisions Department ( email )

3730 Walnut Street
558 & 559 Jon M. Huntsman Hall
Philadelphia, PA 19104-5340
United States

Antonio Moreno

Harvard University - Technology & Operations Management Unit ( email )

Boston, MA 02163
United States

HOME PAGE: http://www.hbs.edu/faculty/Pages/profile.aspx?facId=1029325

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