Events

MARKETING SEMINAR

Speaker:

Dr. Eric FANG
Associate Professor of Marketing
James F. Towey Faculty Fellow
College of Business
University of Illinois at Urbana-Champaign

Abstract:

Shopping communities, or subgroups that facilitate interactions among buyers and sellers, can enhance shopping experiences and personal interactions, especially in online marketplaces. This article evaluates six months of longitudinal data from new buyers and sellers as they form relationships in an online shopping community, revealing unique, dynamic drivers of unilateral relationships (Study 1). Consistent with buyer’s need to reduce uncertainty, communication, seller’s reputation, and relationship clustering have positive effects on buyers’ relationship formation, though the effects of communication and clustering diminish as the buyer gains experience. Consistent with seller’s need to reduce the cost of finding customers, communication, together with behavioral and relational similarity, improve sellers’ likelihood to form a relationship, though these effects are differentially moderated by time spent in the online community. In a second study, the authors show that the payoffs of building unilateral buyer and seller relationships become less important over time, and bilateral (reciprocated) buyer–seller relationships become more important for generating sales. Elasticity and marginal return analyses provide additional managerial insights into the sales returns for online relationship marketing strategies at different points in the buyers’ and sellers’ duration on the shopping platform.