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📝 Intro

Which online channels should you focus your attention on?

This is a key question for marketers. Ideally, you’re everywhere, but resources are limited.

So it depends on your customer’s typical user journey. Based on that, you can prioritize your attention towards the channels that give you the biggest impact.

Today’s study is a large-scale analysis of the online customer journeys of 4,356 people across 40 of the largest ecommerce retailers in the US.

It shows us that the channels people use most change based on the type of product they are buying.

Use this research to understand if you are correctly prioritizing the right channels for your type of product.

P.S.: I’ve renamed Ariyh’s ‘practical tips’ to 3 minute ‘practical insights’. 

Why? I think it better aligns Ariyh with the terms most widely used in companies (e.g. at Google we were obsessed with “insights”, and many companies have “insights manager” roles).

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Previous insight: Using NPS to predict growth (All insights here)

Focus on different online channels depending on whether your product is hedonic or utilitarian

Impacted metrics: Customer acquisition
Channels: Customer journey | Ecommerce | Social media | Website
For: Mostly B2C
Research date: March 2020

📈 Recommendation

Focus your attention and resources on specific online channels (e.g. third-party review sites, social media) depending on the type of product you sell.

If your product is hedonic (e.g. a decorative candle, fashion), focus on having an extensive social media presence and an engaging product page on your website.

If your product is utilitarian (e.g. e.g. insect-repellent candle, accounting services), focus on a strong and competitive presence on third-party review, comparison, and deals websites, as well as search engine ads.

Note that products can be both hedonic and utilitarian (e.g. a sound system), in which case you will need a balance of the above channels.

🎓 Effects

• Which online channels (e.g. third-party review site, social media) people are most likely to use to find and choose your product depends on its purpose:

  • For hedonic products, emotions and the experience are important

  • For utilitarian products, the purchase tends to be more rational and calculated

• This study found that people are more or less likely to use different online channels during their customer journey (in the 14 days prior to purchase).

• An analysis of clickstream data of 22,751 purchases across 20 product categories (e.g. wines, office) sold by 40 retailers (e.g. Amazon, Home Depot), found that:

  • A 1% increase in the hedonic score of a product category (based on a survey of 3,250 people), is associated with more:

    • Social media use (early: +0.43%, middle: +0.32%, late: +0.39%*)

    • Product page views (early: +0.17%, middle: +0.17%)

  • A 1% increase in the utilitarian score is associated with more use of:

    • Search engines (late: +0.23%), 

    • Third-party reviews (early: +0.11%, late: +0.04%)

    • Deal sites (middle: +0.09%)

  • *Note: these stages correspond to 8–14 days (early), 2–7 days (middle), and 0–1 days (late) before purchase in the customer journey

(Customer journey online channel usage of a typical hedonic product [Toys] vs a typical utilitarian product [Office supplies] - Click to zoom in)

(Examples of hedonic and utilitarian product category ratings, based on a survey with 3,250 respondents - Click to zoom in)

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🧠 Why it works

• When we buy a hedonic product (e.g. a perfume):

  • It’s a relatively emotional decision, often impulsive

  • We look for a fun and exciting shopping experience

  • We tend to use simple signals and heuristics (e.g. the design is appealing) rather than deep information processing to make a decision

  • Instead of looking for better alternatives, we easily get attached to a particular product or brand

  • We sometimes look at competing products only to justify our already made decision and reduce our guilt for committing to it

• Therefore, our journey often starts with eye-catching posts on social media from which we move on to leisurely scrolling one or a few product pages before impulsively buying.

• When we buy a utilitarian product (e.g. a washing machine):

  • It’s a relatively rational decision, often planned ahead of time

  • We look for the best value we can find

  • Features tend to be easy to compare across products and brands (e.g. energy efficiency)

  • The product’s brand matters less

• Therefore, we make heavy use of search engines and websites that help us easily compare products in a list-wise, clear, and condensed format. We’re also likely to browse products of competitors on their websites.

✋ Limitations

• The clickstream data used in the study is limited by several factors. We don’t know:

  • The individual impact of social media posts (e.g. if a company or a friend’s post triggered a product search), search engine results, or reviews on purchase decisions.

  • How long customers spent on each website, only that customers visited these sites and how many times they did so throughout the 14-day customer journey

  • The importance of other online channels like emails or referrals (or offline ones, like television). These channels are important and you should not exclude them from your mix.

  • The exact impact or differences of mobile devices (or other devices, like tablets) on the customer journey. Mobile browsing may be slightly different from desktop, although the fundamentals covered in this study shouldn’t change much.

🏢 Companies using this

• Most companies specialized in either hedonic products (e.g. Zara) or utilitarian products (e.g. QuickBooks accounting software) seem to correctly prioritize the most important channels for them.

• Retailers that offer a wide variety of different products of both types (e.g. Walmart) have a harder time specializing and need to stretch themselves in several channels.

⚡ Steps to implement

• If your product is mainly hedonic:

  • Invest in your social media strategy. From your company page to influencer marketing. You can also make use of social media product promotions (e.g. an exclusive discount coupon)

  • Monitor how well your product performs and consider adding highly engaging elements (several high-quality photos or a video)

• If your product is mainly utilitarian:

  • Benchmark your price and product with your competitors and make sure you perform well. Assume customers will browse several competitors and comparison websites before reaching a decision. You can also create pages on your website that compare your features to those of your competitors

  • Prioritize search engine marketing (SEM) for both branded and unbranded keywords

🔍 Study type

Market observation (of clickstream data of 22,751 purchases that account for $1.2 million sales across 40 retailers during a 24-month period from 2013). United States

📖 Research

Li, J., Abbasi, A., Cheema, A., & Abraham, L. B. (March 2020). Path to purpose? How online customer journeys differ for hedonic versus utilitarian purchases. Journal of Marketing.

[Link to paper]

🏫 Affiliations

McIntire School of Commerce, University of Virginia and ComScore. United States

Remember: Research could be disproven in the future (although this is rare). It also may not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

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