UCL School of Management is delighted to welcome Dongwon Lee, University of Maryland, to host a research seminar discussing ‘Mobile & Me: Field experiments on the impact of recommendation systems in the mobile channel.’

Abstract

The benefits of recommendation systems in online retail contexts have received much attention in prior work. Much of this work has been conducted in PC-based settings, while mobile devices are becoming increasingly central to the online shopping experience. In this paper, we first examine differences in the effects of recommendation systems across the PC-based and mobile channel on customer-level decision outcomes. Second, we focus on the role of recommendation systems and mobile channel on the market, in terms of sales diversity. We conduct two randomized field experiments by partnering with an online retailing firms in East Asia, in each case the treatment being access to a recommendation system. The results from the experiments show that the use of recommendation systems increases customer-level decision outcomes such as overall sales, views and sales of recommended products, click-through rate, and conversion. More importantly, the marginal impacts of the recommendation systems are significantly higher for mobile users, indicating that the higher search costs imposed through mobile devices are more effectively reduced through recommendation systems. With respect to sales diversity, we observe that while the mobile channel leads to more diverse sales, we see no interactive effects of the recommendation system and mobile use on sales diversity. These results provide boundary conditions for the efficacy of recommendation systems in retail contexts where online sales occur across both PC-based and mobile channels. We discuss the managerial implications of these results for online retailers and conclude with opportunities for further research.