Information Search and Purchase Channel Choice across In-Home Shopping Retail Formats

Article excerpt

INTRODUCTION

The proliferation of diverse retail formats, such as the Internet, direct marketing, home shopping networks, call centers, and catalogs, has created a challenge for firms to manage their multi-channels effectively (Neslin et al., 2006). To address this challenge, marketing researchers have studied customer behavior in the multi-channel context (e.g., Fox, Montgomery & Lodish, 2004; Gupta, Su & Walter, 2004; Mathwick, Malhorta & Rigdon, 2002).

The main focus of this research is to investigate the relationship between information search and purchase channel choice across in-home shopping channels are defined as shopping channels by which consumers shop at home, such as TV shopping, catalogs, and the Internet. As consumers look for shopping convenience and time-saving shopping, the importance of these channels has increased for many retailing firms. While there has been much research related to in-home shopping, most previous research has mainly focused on the characteristics and choice of individual in-home shopping channels. With regard to the recent multi-channel research, marketing researchers have been interested in the relationship between the Internet and stores (Gulati & Garino, 2000; Teering & Huizingh, 2005).

Our study considers two types of factors simultaneously: channel selection across in-home shopping channels and consumer behaviors (information search and purchase behavior). Practically, this study may help the retailing firms with multi-channels to clarify the targeting of customers and the role of each channel. In addition, with this study we believe the firms can gain an understanding of how to integrate and coordinate their own channels, offer channel-specific customer services, and build effective customer relationships.

The remainder of this paper is organized as follows. The next section discusses why multi-channel retail firms should identify customers' channel choices in each buying process. By introducing the research shopping phenomenon, we suggest that channel lock-in and cross-channel synergy effects across in-home shopping channels should be examined. Section 3 describes the data for our empirical study and Section 4 describes the econometric model used to analyze our data. We adopt the multivariate probit (MVP) model that is appropriate for analyzing multiple dummy dependent variables with inter-correlation. Section 5 presents the estimation results, and Section 6 summarizes the results of the study and describes the practical implications for multi-channel retail firms. Finally, we discuss the limitations of our model, suggest future research directions, and conclude.

THE RELATIONSHIP BETWEEN INFORMATION SEARCH AND PURCHASE CHANNEL CHOICE

Multi-channel retailing firms can acquire and retain customers by identifying their customers' channel choice patterns. Based on a two-step approach of consumer product purchase, consumers first research product information and then purchase products. Accordingly, because customer's channel choice happens at each step, individual customers could have one of two types of channel sets--the same channels or different channels. As consumers get accustomed to using multiple channels, research shopping has become a common phenomenon and has received attention by marketing researchers and practitioners (Verhoef, Neslin & Vroomen, 2007). Research shopping study shows that the most popular pattern among research shopping customers is information search by the Internet and product purchase by stores (43%) (See Table 1) (DoubleClick, 2004).

While it is well known that the Internet has similar characteristics with other in-home shopping channels (TV and catalogs), customer choice across these channels are relatively less studied. Several questions are of interest. What in-home channel does each customer select for information search and for purchase? …