The Effects of Mobile Apps on Shopper Purchases and Product Returns

Posted: 2 Dec 2016

See all articles by Unnati Narang

Unnati Narang

Texas A&M University - Mays Business School

Venkatesh Shankar

Texas A&M University - Mays Business School

Date Written: December 1, 2016

Abstract

Do mobile apps influence shopper purchases and product returns? We model the effects of app adoption in the context of a large omnichannel retailer with 32 million shoppers. We leverage the launch of a mobile app by the retailer and use a difference-in-differences approach to identify and estimate the differences between app adopters and non-adopters in shopping outcomes, such as the incidence and monetary value of purchases and product returns. We find that app adopters buy 21% more often but spend 12% less per purchase occasion and return 73% more often than non-adopters in the month after adoption. Overall, app adoption results in a 24% increase in net monetary value of purchases. Our findings are robust to alternative explanations and measures. Furthermore, our analysis of the drivers of app use reveals that exposure to offers and rewards through the app plays a key role in driving shopping outcomes. Surprisingly, the number of unique app features accessed by the shopper has an inverted U-shaped relationship with shopping outcomes, suggesting managerial caution against “all-in-one” app designs.

Keywords: difference-in-differences, exponential Type II Tobit, mobile marketing, mobile apps, quasi-experiment

JEL Classification: M31, L81, C01, C23

Suggested Citation

Narang, Unnati and Shankar, Venkatesh, The Effects of Mobile Apps on Shopper Purchases and Product Returns (December 1, 2016). Mays Business School Research Paper No. 2878903. Available at SSRN: https://ssrn.com/abstract=2878903 or http://dx.doi.org/10.2139/ssrn.2878903

Unnati Narang (Contact Author)

Texas A&M University - Mays Business School ( email )

Wehner 401Q, MS 4353
College Station, TX
United States

Venkatesh Shankar

Texas A&M University - Mays Business School ( email )

Wehner 401Q, MS 4353
College Station, TX 77843-4218
United States
979-845-3246 (Phone)

HOME PAGE: http://www.venkyshankar.com

Register to save articles to
your library

Register

Paper statistics

Abstract Views
2,232
PlumX Metrics