• Management Science and Financial Engineering
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• v.11 no.3
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• pp.95-107
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• 2005

As online shopping malls have emerged as a substantial shopping channel, they have used various sales promotion strategies to acquire new customers. Most of these strategies have been applied by offline malls for years. One, loss-leader pricing, is a type of promotional pricing in which stores sell well known products below their marginal cost, in order to attract customers and induce them to purchase more goods through impulse buying. This strategy is based on the expectation that customers will factor transaction costs into their purchasing decisions. However, its application to online malls fails to recognize that transaction costs are lower online, and that customers will behave differently as a result. Our study predicts that loss-leader pricing will not work online because online malls entail lower searching and moving costs than offline malls The study examines the effectiveness of loss-leader pricing with empirical data from a survey as well as log data from a Korean online shopping mall. The results show that while loss-leader pricing does attract customers to online shopping malls, it encourages cherry-picking rather than impulse purchases of regular-price goods.

• Asia pacific journal of information systems
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• v.26 no.2
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• pp.211-230
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• 2016

Social commerce is a new type of e-commence that is based on social networking technologies and aggressive marketing strategies, such as one-deal-a-day. However, although social commerce has become very popular, little is known of customers' substantive purchasing behaviors when using social commerce sites. These behaviors, namely visiting and purchasing behaviors, are the focus of this study. Hence, this study aims to provide comprehensive understanding of the visiting and purchasing behaviors of customers in relation to social commerce sites. A research model based on the utilitarian and hedonic values of shopping, social influence, and convenience, which represent social commerce features, was developed and empirically analyzed using data from social commerce site users. The results revealed that purchasing behaviors of consumers when they use social commerce sites are affected directly by the utilitarian value (perceived usefulness) of the site as well as their purchase intention. Purchase intention is affected by perceived usefulness, subjective norm, and visiting behaviors. The visiting behaviors of consumers in relation to social commerce sites are also affected directly by the hedonic value (playfulness) of the site as well as their intention to visit the site. The findings of this study have implications for practitioners with regard to understanding and promoting the use of social commerce sites.