Consumer choice behavior in online and traditional supermarkets: The effects of brand name, price, and other search attributes

Are brand names more valuable online or in traditional supermarkets? Does t he increasing availability of comparative price information online make con sumers more price-sensitive? We address these and related questions by firs t conceptualizing how different store environments (online and traditional stores) can differentially affect consumer choices. We use the Liquid deter gent, soft margarine spread, and paper towel categories to test our hypothe ses. Our hypotheses and the empirical results from our choice models indica te that: (1) Brand names become more important online in some categories bu t not in others depending on the extent of information available to consume rs - brand names are more valuable when information on fewer attributes is available online. (2) Sensory search attributes, particularly visual cues a bout the product (e.g., paper towel design), have lower impact on choices o nline, and factual information (i.e., non-sensory attributes, such as the f at content of margarine) have higher impact on choices online. (3) Price se nsitivity is higher online, but this is due to online promotions being stro nger signals of price discounts. The combined effect of price and promotion on choice is weaker online than offline, (C) 2000 Elsevier Science B.V. Al l rights reserved.