Digital Commerce and the Digitally Connected Enterprise
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Paper Type
Complete
Paper Number
1126
Description
E-commerce platforms match online buyers and sellers using their search technologies. A more precise search algorithm may improve search targetability at the cost of preventing consumers from exploring not directly related products. We take advantage of a 2019 quasi-experiment on a leading e-commerce platform that refined some product categories into finer subgroups to increase search precision. Using granular panel data on consumer search behaviors, we find that the improvement in search precision results in a 37.3% increase in consumers’ click-through rates and a 64.4% increase in gross merchandise volume. The improvement in matching outcomes in the short run, however, is accompanied with a substantial decrease in consumer engagement in the long run. On average, consumers conduct 1.2% fewer searches and spend 3.4% less time on the platform in the following week after the search precision increases. Overall, our findings illustrate the tradeoff between exploitation and exploration in e-commerce search design.
Recommended Citation
Zhou, Wei; Lin, Mingfeng; Xiao, Mo; and Wang, Zidong, "Beyond the Search Bar: The Value of Search Quality on E-commerce Platforms" (2020). ICIS 2020 Proceedings. 1.
https://aisel.aisnet.org/icis2020/digital_commerce/digital_commerce/1
Beyond the Search Bar: The Value of Search Quality on E-commerce Platforms
E-commerce platforms match online buyers and sellers using their search technologies. A more precise search algorithm may improve search targetability at the cost of preventing consumers from exploring not directly related products. We take advantage of a 2019 quasi-experiment on a leading e-commerce platform that refined some product categories into finer subgroups to increase search precision. Using granular panel data on consumer search behaviors, we find that the improvement in search precision results in a 37.3% increase in consumers’ click-through rates and a 64.4% increase in gross merchandise volume. The improvement in matching outcomes in the short run, however, is accompanied with a substantial decrease in consumer engagement in the long run. On average, consumers conduct 1.2% fewer searches and spend 3.4% less time on the platform in the following week after the search precision increases. Overall, our findings illustrate the tradeoff between exploitation and exploration in e-commerce search design.
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