While many studies examined the effects of online customer reviews (OCRs) on product sales, a clear understanding of the effects of OCRs on product returns is lacking. This study examines the impact of OCRs characteristics (valence, volume, and variance) on return decisions with a rich multi-year dataset from a major online retailer covering the electronics and furniture category. The main finding is that overly positive review valence (i.e., higher than the long-term product average), induces more purchases, but also more returns. An explanation for these findings is that OCRs help to form product expectations at the moment of purchase. Therefore, the purchase probability increases but the high expectations due to overly positive reviews may not be met, which results in negative expectation disconfirmation and consequently increases return probability as well. The effect of review valence on returns is stronger for novice buyers and for cheaper products. We further find that review volume and variance mainly affect purchase decisions, and have little to no effect on product returns. This study thus demonstrates that products returns should be considered when examining OCR effects, especially because overly positive reviews may hinder a retailer's financial performance, due to large reverse logistics costs associated with product returns.
Despite the growing literature on loyalty program (LP) research, many questions remain underexplored. Driven by advancements in information technology, marketing analytics, and consumer interface platforms (e.g., mobile devices), there have been many recent developments in LP practices around the world. They impose new challenges and create exciting opportunities for future LP research. The main objective of this paper is to identify missing links in the literature and to craft a future research agenda to advance LP research and practice. Our discussion focuses on three key areas: (1) LP designs, (2) Assessment of LP performance, and
Marketing scientists and practitioners acknowledge that it is essential to measure and manage customer value (Petersen and Kumar 2015). Customers can create value to the firm by purchasing products, not returning these products, recommending products to other potential customers, influencing other customers, and providing feedback to the company (Kumar et al. 2010a). Importantly, these customer behaviors will be interrelated. For example, product returns may affect future purchases, product returns, and engagement behaviors-which all affect customer value. Hence, customer value goes beyond customer purchase behavior, and customer value management should also include customer engagement behavior and customer product return behavior (Van Doorn et al. 2010;Kumar et al. 2010a).
This study examines the impact of an instant reward program (IRP) with bonus premiums on consumer purchase behavior. An IRP is a rapidly growing form of short-term program that rewards consumers instantly with small premiums per fixed spending, where these premiums are part of a larger set of collectibles. A supplementary element in many IRPs promotes specific brands with an extra premium, labeled bonus premiums. Bonus premiums are the extra premiums consumers can earn by buying a specific promoted brand, which is a non-price promotion tied to the IRP. Therefore, consumers can earn premiums in two ways: based on total spending and on purchases of promoted brands. To test the effects of these marketing instruments, this study uses Dutch household panel data related to purchases of 23 product categories spanning four supermarket chains. We decompose consumer purchase behavior by modeling the number of shopping trips, category-level purchase incidence, brand choice, and purchase quantity. The results show that an IRP results in incremental shopping trips. Promoting a brand with a bonus premium and price discount compared to just a price discount results in higher choice probabilities for the promoted brand. Finally, the IRP and bonus premium are especially effective for households that collect the premiums, but we also find positive albeit smaller effects for non-collecting households.
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