When and How to Leverage E-commerce Cart Targeting: The Relative and Moderated Effects of Scarcity and Price Incentives with a Two-Stage Field Experiment and Causal Forest Optimization

Abstract

The rise of online shopping cart–tracking technologies enables new opportunities for e-commerce cart targeting (ECT). However, practitioners might target shoppers who have short-listed products in their digital carts without fully considering how ECT designs interact with consumer mindsets in online shopping stages. The authors find that ECT has a substantial impact on consumer purchases, inducing a 29.9% higher purchase rate than e-commerce targeting without carts. Moreover, this incremental impact is moderated: the ECT design with a price incentive amplifies the impact, but the same price incentive leads to ineffective e-commerce targeting without carts. By contrast, a scarcity message attenuates the impact but significantly boosts purchase responses to targeting without carts. Interestingly, the costless scarcity nudge is approximately 2.3 times more effective than the costly price incentive in the early shopping stage without carts, whereas a price incentive is 11.4 times more effective than the scarcity message in the late stage with carts. The authors also leverage a causal forest algorithm that can learn purchase response heterogeneity to develop a practical scheme of optimizing ECT. These findings empower managers to prudently target consumer shopping interests embedded in digital carts in order to capitalize new opportunities in e-commerce.