The Impact Of Visual Elements On Sales In E-commerce Environment

The rapid development of the Internet and digital technology has spawned a series of e-commerce platforms.In 2019,China's online retail volume exceeded 100 billion CNY.The digital economy plays an increasingly important role in GDP.On e-commerce platforms,merchants show various details to help consumers collect information,evaluate products,and make purchase decisions.According to information format,web elements can be classified into two categories:1)text elements and 2)visual elements.Text elements indicate literal information,such as price,discount rate,consumer reviews,merchant responses.Visual elements indicate graphical information,such as image,video,and virtual reality.Past literature mainly explores the impact of text elements on merchants' sales and users' behavior.However,few works investigate the impact of visual elements in-depth based on large-scale empirical data.Visual information plays a critical role when humans are perceiving and understanding the environment.Visual perception studies show that people can only remember 10%of the textual information,20%of the audio information,but 30%of graphical information.This dissertation focuses on two kinds of visual elements:"Picture" and "Virtual Reality(VR)" to conduct case studies.This paper uses e-commerce platforms as research environment,collects large-scale real data,employs advanced econometric models to examine the impact of pictures and virtual reality on sales.The findings reveal the underlying mechanisms and provide managerial implications for e-commerce platform operators,merchants,and consumers.Specifically,when one merchant designs his online webpages on an e-commerce platform,he usually shows a representative photo,denoting as the merchant's main picture.Merchants' main pictures are essential visual elements displayed on the consumers' search results page and affect consumers' decision process.The information depicted by a picture is very flexible.Different merchants may display different categories of pictures,showing either brand,product,or environment.Although a series of prior studies have discussed the impact of pictures in the e-commerce context,most of them treat entire pictures on the webpage as a whole to examine their impacts.It is still unclear whether displaying different categories of pictures may affect merchants' sales.If the sales are distinct,which aspects of the main picture are relevant to sales variation?Either picture content,or picture composition,or both?The first case study investigates the impact of pictures on sales.This study uses the daily-deal platform "Meituan&Dianping" as research background and employs the log-linear random-effects model,Chamberlin device,and selection bias correction methods to investigate the effect of the brand-,product-,environment-category of main pictures on sales,revealing the underlying mechanism.Besides,with the development of computer vision technology,VR can generate a computer-simulated environment for consumers exploring visual information of properties and interacting with the context in real-time.Constrained by the expensive VR device,prior literature mainly concentrates on VR applications in medicine,electricity,and aerospace.Most of these works conduct experimental studies to examine headset-based VR applications' influence on consumers' behavior.Few in-depth empirical works discuss the influence of screen-based VR applications on products' selling process.In 2018,a well-known online real estate platform in China,Beike,introduces VR as a novel online house tour function,the first VR application in China's e-commerce industry.The second case study focuses on the impact of VR on selling process.This study uses the real-estate e-commerce platform as research background,collects data of property attributes,selling time,web visits,and employs survival models,propensity score matching,Heckman's control function,and other econometric tools to examine the impact of VR on the selling process of properties,demonstrating the influence of VR on consumer's decision-making process,showing the impact of consumer's experience on VR.Finally,this study focuses on both VR and pictures to uncover the relationship of these two visual elements on properties' selling process.As for the case study of pictures,the results indicate that merchants with the brand category of main pictures perform better sales than those with the product category or the environment category of main pictures.The distinction of sales is relevant with two aspects,picture content and picture composition.Picture content denotes the focal objects and elements depicted by the photo,reflecting the information effect.Picture composition denotes the arrangement of objects and elements to influence.the visually compelling,reflecting the aesthetic effect.This paper finds that the aggregate effect of five compositional features(background ratio,luminance contrast,convexity,symmetry,and enclosure)can explain the sales distinction of different categories of pictures.For chain stores with high brand awareness,merchants displaying brand names/logos as content can bring more sales than those displaying products or the environment.As for merchants with low brand awareness,the sales distinction of displaying different categories of content is insignificant.The impact of picture content and composition are heterogeneous to merchants' characteristics.Picture content is more influential for new merchants and less renowned merchants.Picture composition shows significant impacts on both new/old and renowned/less renowned merchants.As for the case study of VR,the results show that VR can overall accelerate properties' selling process.However,when VR just launches,all consumers do not have prior using experience on it.VR may extend the selling process of properties in a short period.Over time,consumers get familiar with how to use the VR.The acceleration effect of VR will occur and gradually increase.The acceleration effect becomes stable in the long run.Besides,the presence of the "VR badge" can increase web visits of a property' s detail page,helping consumers find out the most promising properties within a large set of potentials during the information search stage.In the alternative evaluation stage,VR-enabled properties have higher attentions.Moreover,VR can increase consumers' conversion from web visits to attention,indicating the effectiveness of VR provided information to help consumers evaluate property quality.Finally,VR and pictures present the substitution effect.For a property supporting both VR and pictures,the seller may speed up his property's selling process by reducing the number of pictures.To begin with,the dissertation extends the literature of the impact of pictures on sales in the e-commerce environment,offering the viewpoint of picture content and composition to explain the sales variation with different categories of pictures,showing the heterogeneous effect of content and composition on sales.Besides,this dissertation uncovers the role of VR in consumers' decision-making process,demonstrating the influence of consumers' prior experience on VR,showing the relationship between pictures and VR.These findings can provide managerial implications for e-commerce platform owners and merchants to better employ these two kinds of visual elements,pictures and VR,in online presentations.