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  • May–June 2023
  • Article
  • Operations Research

Need for Speed: The Impact of In-Process Delays on Customer Behavior in Online Retail

By: Santiago Gallino, Nil Karacaoglu and Antonio Moreno
  • | Pages:19
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Abstract

The impact of delays has been widely studied in various offline services. The focus of this study is online services, and we explore the impact of in-process delays—measured by website speed—on customer behavior. We leverage novel retail and website speed data to investigate how delays impact online sales and how customer sensitivity to in-process delays varies across the different stages of a customer’s shopping journey. We estimate sizable adverse effects of website slowdowns on online sales. Using threshold regression models, we show that customers exhibit diminishing sensitivity to increases in website slowdowns. Our results suggest that waiting times affect customer abandonment differently at different stages of the shopping journey. Customers are more sensitive to slowdowns at the checkout stage. Our findings have implications for website design decisions such as improving website speed at the checkout stage, selecting third-party content providers, and customizing the design of mobile and desktop channels. The paper’s results are especially relevant in the current regulatory environment with ongoing policy debates about net neutrality.

Keywords

Online Retail; Quasi-experiments; Abandonment; Synthetic Control; E-commerce; Internet and the Web; Consumer Behavior; Policy; Retail Industry

Citation

Gallino, Santiago, Nil Karacaoglu, and Antonio Moreno. "Need for Speed: The Impact of In-Process Delays on Customer Behavior in Online Retail." Operations Research 71, no. 3 (May–June 2023): 876–894.
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About The Author

Antonio Moreno

Technology and Operations Management
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    Algorithmic Assortment Curation: An Empirical Study of Buybox in Online Marketplaces

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    Zalando: Becoming the Starting Point for Fashion

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    Vanguard Retail Operations

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More from the Authors
  • Algorithmic Assortment Curation: An Empirical Study of Buybox in Online Marketplaces By: Santiago Gallino, Nil Karacaoglu and Antonio Moreno
  • Zalando: Becoming the Starting Point for Fashion By: Antonio Moreno, Leela Nageswaran, Margaret Underwood and Gamze Yucaoglu
  • Vanguard Retail Operations By: Antonio Moreno, Willy C. Shih and Margaret Underwood
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