Personalize it, no return: Nudging online consumers towards product personalization that makes the product non-returnable with herd instinct and regret nudges

Abstract

Massive ecommerce returns incur considerable return costs for online sellers, erode their competitiveness, burden their returns systems, and damage the natural environment. Reducing ecommerce returns can mitigate these negative consequences. Since most online sellers adopt a no-return policy for personalized products, inducing consumers to personalize more products should be an effective way for these sellers to reduce ecommerce returns. This article focuses on how online sellers use a herd instinct nudge and a regret nudge to induce consumers to use a product personalization service to reduce ecommerce returns. We also studied the effects of the nudges on several pivotal consumer perceptions and affects. A two-factor (a herd instinct nudge vs. no herd instinct nudge; a regret nudge vs. no regret nudge), between-subject experiment was conducted. This research revealed that both using a herd instinct nudge and using a regret nudge can lead to more consumer product personalization behaviors. Both nudges can make consumers perceive the service more valuable. Compared to a regret nudge, a herd instinct nudge should be a more superior method to induce consumer to use the service because it can increase consumer satisfaction with the seller but did not have a significant influence on consumer perceived threat to decision-making freedom. No interaction effect was found between the two nudges.