Research

Retailers can learn from early birds, night owls about the art of online shopping

On the job, most of us have met a night owl or two, the kind of people who are still shooting out emails at midnight and get their best work done after everyone else has gone to sleep. Likewise, we’ve all met the chipper morning bird who dives into a tidy to-do list long before the morning rush hour starts. According to Associate Professor Pei-yu Chen, psychologists have found that people perform tasks more competently when they tackle them during their preferred time of day.

2017-06-06

Both types of worker are following their own natural circadian rhythms, the physical, cognitive, and behavioral changes that roughly follow a 24-hour cycle. That’s a smart move, says Associate Professor of Information Systems Pei-yu Chen, at the W. P. Carey School of Business. According to her, psychologists have found that people perform tasks more competently when they tackle them during their preferred time of day. Chen’s research demonstrates that this phenomenon also shows up when people shop online.

Does mastering your body clock help you shop online more efficiently?

The correlation between body-clock rhythms and performance is so well studied, it has a name: the synchronous effect. As Chen points out, psychologists have studied it in several arenas. For instance, morning people — called “larks” by the psychologists — are better drivers in the a.m. “They tend to get better grades if tests are given in the morning, too,” Chen says. Conversely, night owls get better grades in night or online classes, in which they get to arrange study and test times according to their body-clock rhythms. That’s why Chen and her co-authors (Ziqiong Zhang and Zili Zhang) wondered if following their natural body clocks when shopping online would lead consumers to better purchasing decisions. After all, online shopping isn’t like the Saturday morning scramble seen at the typical grocery store. The proven preference for Saturday grocery runs is “driven by manmade constraints” like school and work, says Chen. But, she adds, “You can do online shopping anytime.”

Buying during the ideal time and day drives purchase and positive reviews

Using buyer satisfaction as a measure of successful performance, Chen analyzed data from JD.com, one of the largest online shopping venues in China. Her dataset included more than 11.5 million purchases and the related reviews from 172,825 customers who shopped the site between 2007 and 2014. Like the larks and night owls who make their preferences known on the job, the majority of online shoppers exhibit specific times during which they’re more likely to click the proceed-to-checkout button. “It tends to happen in a tight range of four to six hours,” Chen says. People also have days of the week they prefer for shopping. After correlating shopping sessions and related reviews, Chen found that people give more favorable reviews on the items they purchase during their preferred shopping hours as well as during their preferred days to shop.

“People get more satisfaction — they are happier with what they bought — when the shopping is done during their preferred shopping hours, and ratings tend to be lower when they deviate from their preferred shopping time,” Chen says.

She also looked at people who showed no preference in shopping times. “For these people, the shopping satisfaction is about the same, regardless of when they shop.” This is interesting because the two results combined together show evidence that existence of rhythm and whether it is followed is a driver of performance. What’s more, those who shop during their personal shopping prime time are more likely to shop again sooner than those who buy during their non-regular shopping hours. “A shopper will come back seven hours sooner when she makes a purchase during her preferred time of day compared with during a non-preferred time of day,” Chen says. If the shopping session follows rather than deviates from a preferred weekday versus weekend schedule, the shopper will come back 61 hours sooner. This suggests that understanding and acting upon consumers’ shopping rhythms could not only drive higher ratings but also improve the retailers’ bottom line by bringing consumers back sooner. Online shoppers have review rhythms, too, and these may differ from the shopping rhythm. According to Chen, 53 percent of nighttime shoppers are daytime reviewers, and 20 percent of daytime shoppers review items at night. When a shopper follows his or her preferred review times and days of the week, the reviews tend to be more positive.

Leveraging 'buy-o-rhythms' can help retailers create custom campaigns, get good reviews

Chen believes her findings could help online retailers personalize promotions and improve ratings overall. “If I were a retailer, I would try to find out each customer’s shopping and review pattern,” she says. “Every morning, I received tons of promotional emails because retailers usually send out mass emails in the early mornings, but what do I do with them at this time of the day? I ignore them because I am not in shopping mode at that time. I would be more likely to open these emails during the time I would consider shopping. What this suggests is that retailers could be much more effective if they understand each individual customer’s rhythm and leverage it.” In addition, sending review prompts during preferred review times will be very helpful. “Retailers do have the data for this type of activity-based promotion,” Chen says. She thinks it would be a “worthy investment” if retailers put the larks and night owls in their corporate IT departments to work helping build out this highly personalized promotional approach.

Originally published in the Spring 2017 W. P. Carey magazine.

Managing IT