An Empirical Investigation of the Effects of Product-Oriented Web Technologies on Product Returns

Prabuddha De, Yu Jeffrey Hu, Mohammad Saifur Rahman
2012 Social Science Research Network  
Internet retailers have been making significant investments in advanced technologies, e.g., 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 impact of these technologies on product returns is still lacking. This study attempts to fill this gap by using several econometric models to
more » ... the relationship between product-oriented technology usage and product returns. Our unique and rich dataset allows us to measure technology usage at the product level for each consumer. The results show that zoom usage has a negative coefficient, suggesting that a higher use of the zoom technology leads to fewer returns. Interestingly, we find that the use of alternative photos increases the likelihood of returns. Perhaps more importantly, its use has a negative effect on net sales. Color swatch, on the other hand, does not seem to have any impact 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.
doi:10.2139/ssrn.2077135 fatcat:5ffsdf65dza65fj4wobqztx67u