Product Uncertainty in Online Markets: The Influence of Situational Factors and Individual Characteristics on Purchase Decision Reversal

Abstract

E-commerce has traditionally suffered from significantly higher product return rates than offline retail (30 % online vs. 10 % offline). Product uncertainty at the time of purchase has been identified as one of the key drivers of purchase decision reversals in online markets. In this study we analyze the impact of situational factors (1. Purchase channel choice, 2. Time pressure) and individual differences on product uncertainty and purchase decision reversal. Following the conceptualization of product uncertainty by Hong and Pavlou (2014), we distinguish between product fit uncertainty and product quality uncertainty. To test our hypotheses, we employ a large-scale empirical analysis based on panel data from a large European online fashion retailer. We find that product fit uncertainty is higher for mobile channel users, which is attenuated by prior brand experience. Time pressure leads to lower return rates despite higher product uncertainty.