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New research in consumer behavior from Harvard Business School faculty on issues including behavioral economics, brand loyalty, and how consumers determine the worth of a product.
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Mitigating the Negative Effects of Customer Anxiety Through Access to Human Contact

by Michelle A. Shell and Ryan W. Buell

Firms increasingly deploy self-service technologies (SSTs) to manage customer interfaces that are inherently stressful. For example, patients may be asked to use kiosks to check themselves into hospitals. This study finds that customer anxiety during SST transactions can reduce customers’ trust in the service provider. Operational design choices may help.

The Impacts of Increasing Search Frictions on Online Shopping Behavior: Evidence from a Field Experiment

by Donald Ngwe, Kris J. Ferreira, and Thales Teixeira

This paper challenges the logic that making it easier for consumers to search across a wide assortment of products is the best strategy for online retailers. Experiments show that adding extra search costs to find discounted items can improve gross margins and sales by increasing the number of items inspected and serving as a self-selecting price discrimination mechanism among customers.

What’s the Antidote to Surveillance Capitalism?

by James Heskett

SUMMING UP: As companies increasingly build business models around our personal data, what can be done to fight back? James Heskett's readers suggest there are no easy answers. Open for comment; Comment(s) posted.

Relative Performance Transparency: Effects on Sustainable Choices

by Ryan W. Buell, Shwetha Mariadassou, and Yanchong Zheng

Encouraging consumers to purchase a more sustainable product or use resources more responsibly is a key challenge for society. This paper discusses experiments involving more than 7,000 participants to shed light on how information and its presentation regarding sustainable performance can be a tool for enhancing sustainable choices in practice.

On Target: Rethinking the Retail Website

by Dina Gerdeman

Target is one big-brand retailer that seems to have survived and even thrived in the apocalyptic retail landscape. What's its secret? Srikant Datar discusses the company's relentless focus on online data. Open for comment; Comment(s) posted.

E-Santa: Is Retail Ready for Digital Christmas?

by Sean Silverthorne

The retail industry is in such a spin over multichannel strategy, mall closings, and big brand shutterings, to name a few pressures, that even Santa can't keep track of it all. Here is recent Harvard Business School research on digital trends shaping how we shop and sell. Open for comment; Comment(s) posted.

Could Big Data Replace the Creative Director at the Gap?

Re: Ayelet Israeli

Is it time to throw out the creative director and rely on big data to predict what consumers want to wear next? Assistant Professor Ayelet Israeli discusses how Gap CEO Art Peck considers a bold idea to boost sales. Open for comment; Comment(s) posted.

Opportunistic Returns and Dynamic Pricing: Empirical Evidence from Online Retailing in Emerging Markets

by Chaithanya Bandi, Antonio Moreno, Donald Ngwe, and Zhiji Xu

Dynamic pricing is widely applied in industries like airline ticketing, ride-sharing, and online retailing. This paper identifies two downsides of dynamic pricing: opportunistic returns and strategic choice of payment method. The impact can be significant and has implications for managers and researchers.

Shipping Fees and Product Assortment in Online Retail

by Chaoqun Chen and Donald Ngwe

This study highlights a strong link between an online retailer’s product assortment decisions and shipping policies in determining purchase outcomes and profits. Consumers are less sensitive to shipping fees than to product prices, but free shipping for orders above the minimum is a strong motivator for increasing average basket sizes.

The Legacy of Boaty McBoatface: Beware of Customers Who Vote

by Michael Blanding

Companies that encourage consumers to vote online should be forewarned—they may expect more than you promise, according to research by Michael Norton, Leslie John, and colleagues. Open for comment; Comment(s) posted.

Bargain Hunters Beware: A Store's 'Original Price' Might Not Be After All

by Michael Blanding

Retailers often compare a "sale" price to the original price. Donald Ngwe says consumers should be skeptical of those original prices — and so should regulators. Open for comment; Comment(s) posted.

That Costs HOW Much?

by Sean Silverthorne

Beyond the attributes of the product itself, price is probably the leading determinant of success in the marketplace. What does it takes to get the price right? Open for comment; Comment(s) posted.

Learning to Become a Taste Expert

by Kathryn A. Latour and John A. Deighton

How should we learn to discriminate a fine wine or chocolate? Tradition says use a flavor wheel and map the taste into vocabulary. We find that works for novices, but, beyond a point, it is counterproductive. Enthusiasts perform more like experts when they abandon language and just “draw the shape” of the taste.

Should Retailers Match Their Own Prices Online and in Stores?

by Dina Gerdeman

For multichannel retailers, pricing strategy can be difficult to execute and confusing to shoppers. Research by Elie Ofek and colleagues offers alternative approaches to getting the price right. Open for comment; Comment(s) posted.

Why Online Retailers Should Hide Their Best Discounts

by Michael Blanding

Online retailers should take a tip from brick-and-mortar shops: Shove your best deals to the back of the store. Research by Thales Teixeira and Donald Ngwe. Open for comment; Comment(s) posted.

Can Consumers Be Saved From Their Misguided Decisions?

by Rachel Layne

Even with a world of information at our fingertips, consumers routinely make bad decisions on everything from investments to health coverage. Can science help? Research by Joshua Schwartzstein and Benjamin Handel. Open for comment; Comment(s) posted.

Can Financial Innovation Solve Household Reluctance to Take Risk?

by Laurent Calvet, Claire Celerier, Paolo Sodini, and Boris Vallée

Structured products are an innovative class of retail financial products with option-like features. This paper provides empirical evidence suggesting that innovative financial products like these can help alleviate loss aversion and thus the low participation of households in risky asset markets.

Last Place Aversion in Queues

by Ryan W. Buell

While no one likes standing in line for service, being last intensifies the pain of waiting, doubles the probability of switching queues, and quadruples the chances of leaving the line altogether. Many service settings could be improved if managers actively mitigated last place aversion.

'Likes' Lead to Nothing—and Other Hard-Learned Lessons of Social Media Marketing

by Dina Gerdeman

A decade-and-a-half after the dawn of social media marketing, brands are still learning what works and what doesn't with consumers. Open for comment; Comment(s) posted.

People Have an Irrational Need to Complete 'Sets' of Things

by Carmen Nobel

People are irrationally motivated to complete arbitrary sets of tasks, donations, or purchases—and organizations can take advantage of that, according to new research by Kate Barasz, Leslie John, Elizabeth Keenan, and Michael Norton. Open for comment; Comment(s) posted.