New paper on the returns of digital goods
21 January 2019
The new year begins with another publication success of the research group. Petra Schulz, Edlira Shehu, and Michel Clement wrote a paper on the influence of firm- and consumer-induced communication on the returns and profitability of digital products – specifically news articles. It was accepted for publication in the special issue “Digital Business Models” of the International Journal of Research in Marketing.
In this study, the authors address the new phenomenon of returning digital products and how sellers can steer communication activities to reduce returns, increase sales and achieve overall profitability. The topic is extremely important for managing digital business models because digital goods (as opposed to physical goods) can be returned effortlessly at almost no costs. The authors find that firm-induced communication (newsletters) decreases returns but has no impact on sales. However, consumer-induced communication (likes) has a twofold positive effect on the overall profitability in increasing sales and decreasing returns. Both types of communication have a positive influence on overall profitability, whereas consumer-induced communication unfolds a higher potential through its dual role – as shown by simulation.
The results are particularly insightful for managers of online platforms and digital publishers who seek to understand the interplay between communication activities, returns, and profitability of digital products. The paper can be found here and is part of project B.2.
Schulz, P., E. Shehu & M. Clement (2019): When consumers can return digital products: Influence of firm- and consumer-induced communication on the returns and profitability of news articles, International Journal of Research in Marketing, forthcoming.