Shopping Mode Choice

1 January 2017

This study aims to explore how consumers evaluate these time attributes; i. e. the value of time, when they are facing a shopping mode choice between physical store shopping and e-shopping. For this purpose, it conducts an experiment to acquire data on respondents’ stated preference choices between physical bookstore shopping and online bookstore shopping. It is finally found that the value of delivery time for a purchased book from an online bookstore to a consumer is approximately $0. 53 per day, which means an online bookstore will have to lower a book’s price by $0. 53 to attract a physical bookstore shopper if the delivery is delayed for one day.

It is also found that in terms of monetary values, avoiding a shopping trip produces far more benefits than bearing waiting for the delivery of books for an online purchase. Keywords * E-shopping; * Shopping mode choice; * Stated preference experiment; * Value of travel time; * Value of product delivery time 1. Introduction In the past decade, the way people shop has dramatically changed. Besides shopping at physical stores, with the aid of information and communication technologies (ICT), consumers are able to shop via the Internet.

Shopping Mode Choice Essay Example

This new type of shopping mode, coming in different names like e-shopping, online shopping, network shopping, Internet shopping, or Web-based shopping, featuring in freeing consumers from having to personally visit physical stores, is anticipated to greatly change people’s everyday lives. Such a high anticipation towards e-shopping has provoked multitudinous studies on this topic. Most of the existing literature, however, has focused on the advantages and disadvantages of Internet marketing.

Such a psychological perspective has been widely adopted in the marketing and information management areas in particular. Comparatively, very little of the existing literature has concerned about how consumers make the choice between e-shopping versus store shopping ( [Lee and Tan, 2003] and [Farag et al. 2007]). One of the reasons for this may be attributed to the intricate nature of the shopping activity. It has been widely recognized that shopping activity is conducted not only for the goal of goods acquisition.

The appeal of traditional store shopping is multifarious, including social interaction, entertainment, movement, and trip chaining (Mokhtarian, 2004). Much of the appeal cannot be easily displaced by e-shopping, making traditional store shopping still quite competitive over e-shopping.

In a conceptual analysis of the transportation impacts of B2C e-commerce, Mokhtarian (2004) reviewed the comparative advantages of store shopping and e-shopping, and conclude that neither type uniformly dominated the other. Because of such an intricate nature of shopping behavior and the relative dominances of e-shopping versus store shopping, modeling the relationships between these two shopping modes has been not an easy task.

The referable literature on this issue, from Koppelman et al. 1991) who modeled consumers’ choices between store shopping, catalog shopping and teleshopping, Lee and Tan (2003) who developed an economic model of consumer choice between on-line and in-store shopping, to Farag et al. (2007), who applied the structural equation modeling (SEM) technique to model the relationships between e-shopping and store shopping, is appreciably limited. This motivates this study to address the choice behavior between e-shopping versus store shopping rather than e-shopping alone.

Another noticeable point at issue is how ICT leads to changes in the allocation of individuals’ time and money resources. It is generally believed that the ongoing advancement of ICT is leading to a reorganization of activities in time and space (Lenz and Nobis, 2007). The ‘fragmentation’ concept introduced by Helen Couclelis means the interruption of one activity by another and the subsequent continuation of the former enabled by the use of ICT (Lenz and Nobis, 2007).

This then leads to increased transport demand, as activities are no longer imperatively bound to particular times and/or particular places (Lenz and Nobis, 2007). For instance, e-shopping could lift the time and space constraints of the shopping process, leading ultimately to a fragmentation of the shopping activity in time and space ( [Couclelis, 2004] and [Farag et al. , 2007]). Such a ‘fragmentation’ of activities should end up leading individuals to reallocate their time and money resources, and eventually change the way they value time.

This motivates this study to address the role time and cost attributes play in consumers’ shopping mode choice behavior. For shopping activities, two fragments of time may be worth exploring further. First, e-shopping frees consumers from having to go in person to the shopping place, and as a result saves them travel time. Second, e-shopping requires consumers to wait for the product delivery after online purchases, and as a result generates waiting time for delivery (or product delivery time).

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