On the motivating impact of price and online recommendations at the point of online purchase

Do online recommendations have the same motivating impact as price at the point of online purchase? The results (n = 268) of an conjoint study show that: (1) when the price is low or high relatively to market price, it has the strongest impact (positive and negative) on the likelihood of an online purchase of an mp3 player, (2) when the price is average to market price, online recommendation and price are equal in their impact at the point of online purchase, and, (3) the relative impact from price increases when online shopping frequencies increases. The implications these results give are that online retailers should be aware that online recommendations are not as influential as a good offer when consumers purchase electronics online. However, other customer recommendations have a stronger impact on novice online shoppers than towards those consumers that shop more frequently online.

Research highlights▶ We arranged a point of online purchase scenario which differs only in price levels and online recommendations levels. ▶ We wanted to analyze the relative motivating impact of price and online recommendation, and to explore to what extent the tradeoff between online recommendation and price differs between segments. ▶ When the price is low or high, it has the strongest motivating impact (positive and negative). ▶ When the price is average, online recommendations and price are equal in their motivating impact. ▶ The relative motivating impact from price increase when online shopping frequencies increases.