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e-Bay Improves Consumer Business Skills

A new study suggests customers of eBay who participate in the company’s online communities become more conservative buyers and more selective and efficient sellers.

The study from Rice University’s Jones Graduate School of Business appeared recently in the journal Marketing Science.

“We know that companies like eBay create online communities with chat rooms and forums to increase customer participation on the site, with the conventional wisdom being that customers will become more loyal to the company and thus spend more money,” said assistant professor of marketing Siddharth Singh.

“However, we wanted to take an in-depth look at this practice and learn if these communities cause more buying and selling, thus increasing profits for eBay.”

To do this, the researchers started with data from a yearlong study of 13,735 new eBay Germany customers. (The authors noted that eBay Germany is set up almost exactly as eBay in the United States.)

The eBay study found that the company’s e-mail marketing campaign inviting people into its community pages was a success; however, after analyzing the eBay data, Rice researchers found that customers who went to the eBay community site became more conservative buyers and more selective and effective sellers by virtue of becoming educated on the eBay process and hearing from others in the community.

The study found that customers invited via e-mail to participate in the community were about 23 percent more likely to participate as compared with a control group of customers not invited to participate.

“The fact is that people became more educated about buying and selling,” Borle said.

“While some of the community pages on eBay have nothing to do with buying or selling and more to do with social interaction, people still became smarter about the process of online merchandising.”

That’s good news for customers who utilize eBay’s community pages, but it’s not especially great news for eBay, Borle said.

“Online companies that believe that community pages will increase use of their business side of the operation need to rethink how to use their social pages moving forward. After all, it’s about making money for eBay, not necessarily creating new friends.”

Source: Rice University

e-Bay Improves Consumer Business Skills

Rick Nauert PhD

Rick Nauert, PhDDr. Rick Nauert has over 25 years experience in clinical, administrative and academic healthcare. He is currently an associate professor for Rocky Mountain University of Health Professionals doctoral program in health promotion and wellness. Dr. Nauert began his career as a clinical physical therapist and served as a regional manager for a publicly traded multidisciplinary rehabilitation agency for 12 years. He has masters degrees in health-fitness management and healthcare administration and a doctoral degree from The University of Texas at Austin focused on health care informatics, health administration, health education and health policy. His research efforts included the area of telehealth with a specialty in disease management.

APA Reference
Nauert PhD, R. (2015). e-Bay Improves Consumer Business Skills. Psych Central. Retrieved on December 14, 2018, from https://psychcentral.com/news/2010/12/20/e-bay-improves-consumer-business-skills/21973.html

 

Scientifically Reviewed
Last updated: 6 Oct 2015
Last reviewed: By John M. Grohol, Psy.D. on 6 Oct 2015
Published on PsychCentral.com. All rights reserved.