Exploring the choice between in-store and online shopping

Abstract

This paper aims at explaining the choice between online and in-store shopping for experience (groceries) and search (electronic appliances) goods in Zurich, Switzerland, applying an integrated choice and latent variable (ICLV) modeling approach: In a stated preference experiment 339 participants were requested to trade-off different attributes related to their choice between online and in-store shopping, with a separate questionnaire asking for their feelings and attitudes towards online shopping. The first alternative-specific Hybrid Choice model in this research field is presented here, including one latent variable reflecting the acceptance level of online shopping which itself depends on basic socio-economic characteristics. An increased acceptance level implies a significantly higher shopping cost sensitivity, which can be explained by the expanded choice set when considering both alternatives as possible shopping channels. The relatively high value of travel time savings (VTTS) obtained of about 40 Swiss Francs per hour indicates a potential for new online shopping services when compared to the relatively low value of delivery time savings (VDTS) of less than 16 Swiss Francs per time unit, depending on shopping purpose and time interval.