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AN ANALYSIS OF E-COMMERCE OPT-IN/OPT-OUT POLICIES AND THE RESULTING EFFECTS ON CONSUMER BEHAVIOR Open Access

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The emergence and widespread use of the Internet has resulted in the shift of many commercial activities from traditional modalities to the online environment. It is estimated that more than 600,000 websites conduct some form of online commerce (Netcraft 2007). Online commerce companies that use e-mail as a marketing medium have difficulties making accurate prediction of new or return customer rates, determining the optimal number of e-mail advertisements, and meeting increasingly demanding customer expectations.Most online commerce companies require that a consumer supply their personal information, such as name, e-mail address, telephone number, etcetera, and they then integrate this information into various lists and databases. These lists and databases have such high commercial value that online commerce companies frequently seek the consumer's consent for follow-up communication. Oftentimes, the ability to opt-in or opt-out of this communication is offered to the customer at the point when initial user information is acquired. Online companies will then use electronic mail (e-mail) or pop-up ads to send commercial-related information and promotional information, such as newsletters or coupons. Advertisements sent via e-mails are categorized as e-mail marketing. It is necessary to understand how online commerce companies provide and apply their opt-in/opt-out methods. This research addresses three neglected areas related to the resulting effects on consumer behavior via opt-in/opt-out policies. First, there has been little work performed measuring consumers' preferences in terms of consent for communications with online commerce websites. Secondly, there has been little follow-up research on recommended either default opt-in or opt-out selection as the best practices of online e-commerce websites. Finally, there has also been no guidance regarding the number of e-mail communications to consumers that provide the greatest benefit for both the company and the consumer.The objective of this research is to develop e-commerce opt-in/opt-out policies essential to the realization and satisfaction of consumers' online activities using the Markov Chain. A Markov Chain is proposed that evaluates the notion of probabilistic opt-in/opt-out methods prediction and e-mail communication analyses. The results of the Markov Chain transition probabilities support the development of reasonable and effective policies to wider implementation of opt-in/opt-out practices in the online e-commerce environment.

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