When and How to Leverage E-commerce Cart Targeting: The Relative and Moderated Effects of Scarcity and Price Incentives with a Two-Stage Field Experiment and Causal Forest Optimization

Abstract

The rise of online shopping cart–tracking technologies enables new opportunities for e-commerce cart targeting (ECT). However, practitioners might target shoppers who have short-listed products in their digital carts without fully considering how ECT designs interact with consumer mindsets in online shopping stages. The authors find that ECT has a substantial impact on consumer purchases, inducing a 29.9% higher purchase rate than e-commerce targeting without carts. Moreover, this incremental impact is moderated: the ECT design with a price incentive amplifies the impact, but the same price incentive leads to ineffective e-commerce targeting without carts. By contrast, a scarcity message attenuates the impact but significantly boosts purchase responses to targeting without carts. Interestingly, the costless scarcity nudge is approximately 2.3 times more effective than the costly price incentive in the early shopping stage without carts, whereas a price incentive is 11.4 times more effective than the scarcity message in the late stage with carts. The authors also leverage a causal forest algorithm that can learn purchase response heterogeneity to develop a practical scheme of optimizing ECT. These findings empower managers to prudently target consumer shopping interests embedded in digital carts in order to capitalize new opportunities in e-commerce.

RETRACTED ARTICLE: Optimization model design of cross-border e-commerce transportation path under the background of prevention and control of COVID-19 pneumonia

“…In order to make better use of the capacity and loading capacity of loaders and improve the transportation efficiency, goods from different customers can be transported by the same truck. Therefore, all transportation work must be completed before shipment (Luo et al 2019 ). Efficient mixing and assembly can not only reduce transportation costs, but also reduce traffic flow, change traffic conditions, and reduce operation time and operation costs.…”

The Double-Edged Effects of E-Commerce Cart Retargeting: Does Retargeting Too Early Backfire?

“…Exploring the moderating effects of cart characteristics for the double-edged effects of ECR. Because customers have different reasons (e.g., high prices, low budget, multiple products to inspect) for cart abandonment (Garcia 2018;Kukar-Kinney and Close 2010;Luo et al 2019), they may have quite different probabilities of purchasing after viewing ECR ads. Since we have detailed clickstream data on cart characteristics such as product quantity and product prices, we can further extend prior literature (Bleier and Eisenbeiss 2015;Lambrecht and Tucker 2013;Sahni, Narayanan, and Kalyanam 2019) by exploring whether these cart characteristics may moderate the double-edged effects of ECR ads.…”

“…These findings on the moderated double-edged effects are nontrivial because research might over-or underestimate the impact of early and late ECR ads if ignoring the moderating roles of carted product features. Because customers have different reasons for cart abandonment, they will have different probabilities of purchasing after viewing ECR ads (Kukar-Kinney and Close 2010; Luo et al 2019). This is different from the cross-sectional consumer heterogeneity, because, over time, even the same individual may have different reasons to abandon the shopping cart.…”

“…Prudent marketers should resist the temptation of using the immediate retargeting, even though advanced digital e-commerce technologies can deliver retargeting ads within minutes after consumers abandon carts online. Nevertheless, early ECR with price discounts or scarcity framing may allow managers to engender more purchase responses (Luo et al 2019). However, price discounts are not a panacea: when repeatedly used, they may train strategic customers who purposefully cart products and then wait for price discounts before purchasing.…”

“…Then, the reminder function of ECR ads will not work anymore because the memory trace is too weak for a reminder ad to be successful: it is difficult to restore or activate the lost memory (Kelley and Gorham 1988). However, if designed with price incentives, too late retargeted ads might still be effective (Luo et al 2019). Taking a broad perspective of the literature on ad personalization based on customers' preferences and demographic profiles (Lambrecht and Tucker 2013) and browsing content (Bleier and Eisenbeiss 2015), future research may also consider how these characteristics regulate consumer purchase responses to too late ECR ads.…”