How Does the Mobile Channel Reshape the Sales Distribution in E-Commerce?

1 Dec 2020

Information Systems

Yongjin Park, Youngsok Bang, JaeHyeon Ahn 

Published in Information Systems Research, December 2020

This study empirically investigates, firstly, how sales distribution in a mobile commerce channel is different from that in a traditional PC channel, and secondly, how mobile commerce channel adoption (as a search and purchase channel) affects e-market users’ search intensity and their aggregate sales distribution. 

“Our analysis shows that transactions in the mobile channel are more concentrated on “head” products compared with PC channel sales,” says Yongjin Park of the Department of Information Systems. 

The subsequent user-level analysis, based on a difference-in-differences approach, reveals that mobile channel adopters search more but are less (more) likely to choose “tail” (head) products.  

“This finding is contrary to our previous belief that more search activities lead to more tail product sales. The relationship between search intensity and head (tail) product sales, however, largely depends on the product categories.” 

In the case of preference goods such as books, CDs, toys, and fashion items, adoption increased e-market users’ search activities and resulted in more tail product sales. For quality goods such as PCs, phones, cameras, and digital appliances, however, adoption intensified the search activities but resulted in more head product sales. Finally, for convenience goods such as home supplies and processed foods, adoption discouraged search activities and decreased the choice of tail products. 

The basic assumption behind the previous belief is that consumers have diverse tastes or product evaluations; thus, exploring alternatives enhances their chance of finding a better fit. The degree of consumer heterogeneity in a product evaluation can depend on the product categories, however, and consumers may be less heterogeneous within a certain product category. In their analysis, Park and co-authors find a positive association between search intensities and tail product sales for convenience and preference goods but a negative association in the case of quality goods.