According to new research published in the INFORMS journal Information Systems Research, live chat tools can help boost sales and increase profits.
The researchers used granular data from Alibaba to examine the effect of live chat on consumers’ purchase decisions. Specifically, they looked at data on consumers’ purchase decisions of Apple and Samsung tablets between March and June 2013.
“We found live chat can increase purchase probability of tablets by 15.9%,” said Xue (Jane) Tan of Indiana University. “We see that human interaction results in better sales performance.”
Unlike in traditional brick and mortar stores, buyers and sellers cannot speak in person on e-commerce platforms. This can cause some uncertainty about the credibility of a seller and the quality of the products they are selling, say Tan, Youwei Wang of Fudan University and Yong Tan of the University of Washington. However, having a live chat tool allows e-vendors to communicate with customers in real time.
The team also found that sellers with a low feedback score benefit much more from live chat conversations than sellers with high score.
“Sellers with limited feedback benefit more from live chat conversations than sellers with a lot of feedback. And products with high past sales volume sell better after live chat, indicating a reinforcement effect,” continued Tan. “It is interesting that a seller can sell multiple products with varying levels of sales performance, and the seller feedback is measured based on all products.”
“Impact of Live Chat on Purchase in Electronic Markets: The Moderating Role of Information Cues”
Xue (Jane) Tan , Youwei Wang , Yong Tan
Information Systems Research Vol. 30, No. 4
Published Online: 6 Dec 2019