Facilitating Consumers’ Evaluation of Experience Goods and the Benefits for Vendors

Abstract

Despite the continuous growth of e-commerce, high levels of uncertainty about products and vendors may hinder this growth. Particularly online vendors of experience goods (such as media products) may face challenges to convince consumers, since the quality of their products is hard to assess prior to consumption. Additional guarantees (such as a money back guarantee) as well as easier access to product information may be used to reduce consumer uncertainty. However, these mechanisms are usually not for free. By using experimental techniques and taking media products as an example, we analyze whether reductions in product uncertainty and search costs have an impact on consumer product search and purchase behavior. As an implication for praxis as well as research, we find that vendors can benefit significantly from employing these mechanisms in terms of search requests, purchases and consumer loyalty. Additionally, vendors may profit from consumers’ uncertainty avoidance even if product uncertainty is low.