Executive Summary
Traditionally, marketers have distinguished between search and experience goods on the basis of consumers’ ability to ascertain product quality before purchase. By lowering the costs of gathering and sharing information and offering new ways to learn about products before purchase, the Internet reduces these traditional distinctions. At the same time, differences in the type of information sought can change the process through which online consumers gather information and make decisions for search and experience goods. The authors conduct a preliminary experiment that compares consumers’ perceptions of their ability to obtain product quality information for search and experience goods in online versus traditional retail settings. Next, using data collected by placing tracking software on the browsers of a representative sample of U.S. households, the authors compare online browsing and purchase behavior for search versus experience goods. In support of the idea that the Web makes all attributes “searchable,” they find that differences between search and experience goods, in terms of the perceived ability to assess product quality before purchase, are lower in online shopping than in traditional retail settings. Correspondingly, in examining the browsing data, they find that consumers spend similar amounts of time searching online for information on search and experience goods. However, they find significant differences in the way that consumers search and purchase these two types of products online. In particular, experience goods involve greater depth of search (characterized by more time spent per product page), whereas search goods involve greater breadth of search (characterized by more product pages viewed). They also find that free riding (buying from a retailer other than the primary source of product information) is more acute for search than for experience goods. Finally, they find that mechanisms that Internet vendors use to allow consumers to learn from the experience of others or to experience product attributes before purchase (e.g., consumer feedback, third-party recommendations, multimedia presentations) increase the time spent on a Web site and the likelihood of purchase from that Web site to a greater extent for experience than for search goods. These differences in consumer behavior for search and experience goods emphasize the need for differences in Web site design for the two product categories. For experience goods, the Internet provides a convenient channel to disseminate quality information and “experience” the product before purchase, and consumers are likely to benefit from more complex and informative Web sites that incorporate multimedia presentations and consumer feedback to illustrate product features. For experience goods, these investments benefit online retailers directly through increased time spent at the Web site and increased sales. For search goods, investments in consumer feedback mechanisms may not be as important. Because free riding is more acute for search than for experience goods, vendors of search goods may benefit from strategies that enable them to sell at lower cost. Finally, retailers with sophisticated information technology infrastructures that incorporate consumer feedback, third-party recommendations, and multimedia presentations at the Web site will benefit by focusing more on experience rather than search goods.
Biography
Peng Huang is a doctoral student in the College of Management at the Georgia Institute of Technology. His current research interests include consumer behavior and decision making on the Internet and public policy issues associated with electronic commerce. He received his master’s degree from the Catholic University of Leuven, Belgium, and his BS from Fudan University, China.
Nicholas H. Lurie is Assistant Professor of Marketing at the Georgia Institute of Technology and conducts research on how the information environment affects consumer and managerial decision making. His research has been published or is forthcoming in Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, Journal of Consumer Psychology, Journal of Retailing, Journal of Service Research, Organizational Behavior and Human Decision Processes, and Journal of Public Policy & Marketing. His article “Decision Making in Information Rich Environments: The Role of Information Structure” won the Ferber Award for the best article in Journal of Consumer Research based on a doctoral dissertation. He received his PhD from the Haas School at the University of California at Berkeley, his MBA from the Kellogg School at Northwestern University, and his AB from Vassar College.
Sabyasachi Mitra is Associate Professor of Information Technology Management and the William H. Andersen II Term Professor in the College of Management at the Georgia Institute of Technology. He is also the faculty director for the Global Executive MBA program at Georgia Institute of Technology. His current research interests include electronic commerce, information security, business value of information technology, and information technology infrastructure design. His research has been published or is forthcoming in several journals such as Information Systems Research, Journal of Operations Management, INFORMS Journal on Computing, IEEE Transactions on Knowledge and Data Engineering, and Journal of Management Information Systems. He obtained his PhD from the University of Iowa and his Bachelor of Technology from the Indian Institute of Technology, Kanpur.
Journal of Marketing, Volume 73, Number 2, March 2009
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