Research finds online visitor traffic information affects willingness-to-pay
17 November 2017
Consumers are willing to spend more money on a product when they believe that visitor traffic on the website is high. New findings from researchers at University of Bamberg, Germany, and Queen Mary University of London, United Kingdom, show that consumers are willing to pay more for the same product when they perceive that many others are present on a website or have been present on the website some time before.
The study, which has been published in the Proceedings of the International Conference on Information Systems, provides evidence that visitor traffic disclosure affects consumers while they shop online. Today, many online retailers such as Expedia or Priceline reveal traffic information on their platforms. People tend to expect that popular offers have superior quality and that popular offers are good deals. The researchers found that this mechanism is only part of the explanation. They show that shoppers can also experience crowding due to the presence of many other visitors on a website. Those shoppers who perceive crowding are concerned that others might make the deal and challenge their ability to achieve a desirable economic reward, such as getting the respective product. When this happens, shoppers are willing to pay more money for an offer.
“The assumption that information about visitor traffic might bias consumers is not new—and we have all seen major retailers implement such cues on their platforms,” says Dr. Uwe Messer, postdoctoral researcher at the University of Bamberg. “However, we did not yet know about its impact on shopper’s willingness to pay for products, and more importantly, the mechanisms through which visitor traffic influences shopper behavior. This is important because it helps us better understand the implications of business practices for consumers and develop measures to offset potential negative effects.”
The findings have implications for managers and policy makers. First, the research shows that the provision of visitor traffic information impacts shoppers and might be an effective strategy to enforce higher prices. Visitor traffic disclosure is a new way to create pressure in purchase situations. The current research shows that the mere presence of others can act as a stressor that produces such pressures. The findings might also help consumers to make more deliberate decisions. By uncovering the mechanisms that drive the effect of visitor traffic on willingness to pay, this research helps consumers reflect decision processes and to understand persuasion attempts by retailers.
This research is open access and can be downloaded from: http://aisel.aisnet.org/icis2017/HCI/Presentations/5/