Start Date
10-12-2017 12:00 AM
Description
As a new transaction channel, the purchase feature in social media mobile apps enables consumers to pay merchant accounts directly. The convenience of mobile payment and the richness of product information and promotions may trigger more demand. The aim of this study is to quantify the effect of such a purchase feature on business sales revenue. Using transaction data from a large hotel chain company, we rely on variations in the timing of users enabling the purchase feature in the mobile app to identify the effect of adopting the mobile channel on hotel room reservation. To mitigate endogeneity caused by the nonrandom selection of being adopters and nonadopters, we apply the difference-in-differences approach with propensity score matched individuals. Our results show that adopting the purchase feature in mobile social media apps will significantly increase sales, and such increase is attributed to more transactions from social media channel.
Recommended Citation
Guo, Chenhui; Zhang, Bin; Chen, Xi; and Goes, Paulo Barcelos, "Pay Easy, Buy More: An Empirical Study of the Purchase Feature in Social Media Apps" (2017). ICIS 2017 Proceedings. 18.
https://aisel.aisnet.org/icis2017/DataScience/Presentations/18
Pay Easy, Buy More: An Empirical Study of the Purchase Feature in Social Media Apps
As a new transaction channel, the purchase feature in social media mobile apps enables consumers to pay merchant accounts directly. The convenience of mobile payment and the richness of product information and promotions may trigger more demand. The aim of this study is to quantify the effect of such a purchase feature on business sales revenue. Using transaction data from a large hotel chain company, we rely on variations in the timing of users enabling the purchase feature in the mobile app to identify the effect of adopting the mobile channel on hotel room reservation. To mitigate endogeneity caused by the nonrandom selection of being adopters and nonadopters, we apply the difference-in-differences approach with propensity score matched individuals. Our results show that adopting the purchase feature in mobile social media apps will significantly increase sales, and such increase is attributed to more transactions from social media channel.