Why getting too personal may harm e-Commerce!

Gone are the days when the only way to buy something was to go to a nearby shop. In this fast-paced and technology-enabled world, one can get the products sitting comfortably at one’s home or office through online shopping. The craze of online buying is quite evident by the increasing share of the e-commerce industry in total buying space in India.

Ever since the Internet made its debut in India (around the year 1995), it is revolutionizing every aspect of our life. The technology is constantly evolving with newer and more improved applications to make the users’ lives better. One of the most significant uses of the internet is online shopping which has got a major push due to the simultaneous start of digital banking, and thereafter the introduction of smart phones. To attract buyers, online buying websites use a feature called web personalization where the buyer is shown/advertised related products based on their web search history. Due to this, one gets bombarded with advertisements to say “a pair of jeans” when one earlier searched for a pair of jeans. Web personalization not only helps the companies to increase their sales, it also helps the customers to get reminded about the need for the product and the great discounts available on the same. This strategy works for most of the products. However, there are several products such as undergarments, cosmetics etc. where the buyers feel embarrassed to be bombarded with advertisements ruining their online buying experience.

A team of researchers from IIT Madras decided to study if this kind of advertising is also helpful to increase the sales of embarrassment products like under-clothes or will it ruin the buying experience for the customers leading to fewer sales. Their research shows that if a product comes under the embarrassment category, the buyers try to quickly end the purchase to save themselves from associated embarrassment and therefore web personalization may not be relevant for such products. The results of this research has been published in the journal The Data Base for Advances in Information Systems.

“Online firms today use customers’ personal information to design personalized offerings and provide improved services. While purchasing products from an e-Commerce site, each and every trace in searching or buying a product will be generally recorded by the online merchant to profile and enhance customers’ buying experience. We intended to understand how an individual’s buying behavior in an online environment differs when the category of products they search is embarrassing products, say under-clothes and how does the category of embarrassing products interact with web personalization and together influence online buying behavior?” says Prof. Saji K. Mathew, Professor at IIT-Madras and one of the members of the research team.

“The results of the study can help e-commerce companies decide on the optimal level of personalization and strategize accordingly to benefit the business. Another important aspect of the study is that it encourages a dialogue on the ethical issues related to personalization,” says Dr. Arun Elias, Associate Dean at the Victoria Business School, New Zealand and who is unrelated to the study.

Major industry giants understand the importance of this technology for their businesses and are constantly trying to increase their online presence to increase sales. Currently, various e-commerce companies are in the online shopping space and are using strategies such as discounts and coupons to increase the sales on their websites. One of the tactics used by shopping websites to increase their sale is web personalization. In web personalization, a buyer is shown advertisements of the product/related product to their needs, preferences and behavior which is analyzed based on their past browsing histories. This is the reason why one gets bombarded by advertisements of “a pair of jeans” when one earlier searched for a pair of jeans. While web personalization helps the companies to increase their sales, it is also helpful for customers as they get reminded about the need for the product and also about the great discounts available on the same. This strategy works for most products. However there are several products such as undergarments, cosmetics etc. where the buyers feel embarrassed to be bombarded by advertisements ruining their online buying experience.

For this research, the team first conducted a focused group (included both male and female participants) discussion with MBA graduate students to make a list of products that they considered as embarrassment products. The male category considered underwear and hair growth care products as embarrassing whereas females found underwear and body shaper products as embarrassing. Further, the team planned a pilot study involving students from the management studies and fourth-year students of engineering program students with age group ranging from 19-25 years and those who were seated in an IT laboratory of a local college. Four types of websites were created for this study based on the relevance of the content (relevant/irrelevant) and level of embarrassment (high Embarrassment products like underwear etc. and low embarrassment products like pen). The students were divided into four groups and each group was asked to register and browse a particular website allotted to them to buy products.

The online buying behavior of the participants was assessed based on three parameters: time taken, number of clicks and number of products added to the cart. The results of the study show that buyers complete the online buying process in minimum time in case of high embarrassment products despite the provisioning of personalization. The researchers believe that the findings of this study would help e-commerce service providers to fine-tune their web personalization and recommendation strategies to ensure that they do not embarrass customers while trying to increase their sales.

“I found the study interesting due to three reasons. Firstly, it contributes to the behavioral aspect of management which is very often neglected. Secondly, the methodology of conducting controlled experiments to look at the behavior of subjects to special/embarrassing products is commendable and thirdly the strength of the study is its interdisciplinary nature where management and psychology are combined and the practical applications of psychology could be seen” added Dr. Elias.

The research team of Prof. Mathew includes Kanishka Priyadharshini Annamalai from Cisco Systems, Inc. and Lakshmi S Iyer, Professor at  Appalachian State University, USA

Article by Aditi Jain
Article: https://dl.acm.org/doi/10.1145/3371041.3371048


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