Shopping Cost and Brand Exploration in Online Grocery
- (pp. 96-120)
Abstract
This paper compares consumers' brand exploration when shopping online versus in a brick-and-mortar store. I use a new scanner dataset to compare the behavior of households shopping online and in-store at the same chain, for identical items and prices. I find that brand exploration is more prevalent in-store. My model quantifies the role of features of e-commerce, like the existence of "favorites lists" and the difficulty in verifying item quality. Limited exploration online implies higher barriers to entry on the Internet channel. Counterfactual exercises suggest that online advertising could make the Internet channel more competitive. (JEL D12, L11, L81, M31, M37)Citation
Pozzi, Andrea. 2012. "Shopping Cost and Brand Exploration in Online Grocery." American Economic Journal: Microeconomics, 4 (3): 96-120. DOI: 10.1257/mic.4.3.96Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L81 Retail and Wholesale Trade; e-Commerce
- M31 Marketing
- M37 Advertising
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