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Academics and practitioners alike have been arguing about whether the Internet brings a revolutionary change in the fundamental way we do business or if it simply offers a new distribution channel and communication medium. Regardless of the answer to that debate, one thing is certain: the Internet provides managers with an enormous amount of customer information that was previously unavailable. Thus, the new struggle has been to manage this information and to use it accurately and efficiently to measure customers, trends, and performance. However, the volume of this data has overwhelmed many e-commerce managers. As a result, e-commerce managers have been focusing on aggregate level summary statistics rather than fully leveraging their data. Using commonly available clickstream data, this article discusses the benefits of separating an individual customer's buying behavior into simple patterns of visits and purchasing conversion. This analysis of the buying process allows us to more carefully examine the relationship between store visits and purchasing behavior.
Academics and practitioners alike have been arguing about whether the Internet brings a revolutionary change in the fundamental way we do business or if it simply offers a new distribution channel and communication medium. Regardless of the answer to that debate, one thing is for sure: the Internet provides managers with an enormous amount of customer information that was previously unavailable. Thus, the new struggle has been to manage this information and to accurately and efficiently use it to somehow measure customers, trends, and performance.
Of particular interest is the role of Internet clickstream data in customer relationship management by providing a rich source of behavioral information. Until recently, the bricks-and-mortar marketers have focused their measurement and modeling efforts primarily on easily available purchasing data. Marketing research vendors in various industries (e.g., Information Resources, Inc., for customer packaged goods; SoundScan for the music industry; and IMS for pharmaceuticals) have been able to provide manufacturers and retailers with rich information regarding market share, brand switching, and new product performance. However, the spotlight has generally been centered on ultimate purchasing activity-when, what, and how much people buy. Customer activities such as comparison shopping and information gathering have largely been ignored for lack of data. These behaviors may be less visible but still exert strong influences on purchasing. As...