Refining online consumer search into an opportunity

Abstract

The rise of the internet has given consumers far more information than ever before when it comes to seeking product information and making purchase decisions. Search platforms aggregate product information and decrease search costs by letting consumers refine search results (eg by price, location, brand or other product attributes) and also by recommending particular products to consumers. Enhanced search technologies have led to reduced search costs, heightening competition between firms. This paper argues that in such an environment, firms can benefit by managing their search platforms to further reduce consumers’ search costs. A platform where it is easy for a consumer to find the best product will benefit from increased consumer retention, as well as satisfaction with the purchased product. The paper offers a number of recommendations to firms for tailoring product recommendations and rankings, even for anonymous consumers whose individual preferences are unknown to the platform. It also points out that search behaviour can be used to glean insights about consumers’ unmet needs and that platforms should be managed so that consumer confidence in search results is protected. Finally, it considers that some search engine optimisation may actually increase search costs.