The Economic Benefits to Retailers from Customer Participation in Proprietary Web Panels

Abstract

Proprietary retailer-sponsored web panels are growing in popularity. We examine specific ways in which retailers may benefit from the creation of web panels and participation of customers in them. A quasi-experiment conducted in the field with a large online retailer using eighteen months of data and a difference-in-differences estimation approach reveals significant economic benefits to the retailer from web panels beyond generation of useful customer information. Web panel participation increased number of purchases by panel customers by 17 percent, cross-buying by 14 percent, and customer profitability by 36 percent. Contrary to conventional wisdom advocating moratoriums for respondents, we find that for web panelists answering each survey (up to a maximum of 27 in nine months) led to incremental positive effects with no evidence of tapering or reversal. Our results extend prior research and managerial implications regarding the question behavior effect by showing that proprietary web panels yield a substantial positive economic impact for retailers.