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Will Online Shopping Compete More with Traditional Retailing or Catalog Shopping?

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  • Michael R. Ward

    (University of Illinois)

Abstract

This paper examines consumer substitution behavior among three distribution channels: online shopping, traditional retail and catalog shopping. A model of consumer transactions costs is presented in which consumer investments in shopping human capital determine distribution channel choice. This model predicts that consumers who make investments that “spillover” to multiple channels will tend to have lower transactions costs for those two channels and will tend to consider these two channels to be closer substitutes than other channels. The model implies that, even if these investments are not measured, they will represent a component of the regression models' residual terms, which will predict distribution channel choice. I test this implication using the GVU Center's survey data on channel selection for various product categories. The results strongly suggest that consumers consider online shopping and catalog shopping to be closer substitutes than any other pair of channels.

Suggested Citation

  • Michael R. Ward, 2001. "Will Online Shopping Compete More with Traditional Retailing or Catalog Shopping?," Netnomics, Springer, vol. 3(2), pages 103-117, September.
    • Handle: RePEc:kap:netnom:v:3:y:2001:i:2:d:10.1023_a:1011451228921
    DOI: 10.1023/A:1011451228921
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    Cited by:

    1. Ron A. Boschma & Jesse W.J. Weltevreden, 2005. "B2c e-commerce adoption in inner cities: An evolutionary perspective," Papers in Evolutionary Economic Geography (PEEG) 0503, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2005.
    2. Pauwels, Koen & Neslin, Scott A., 2015. "Building With Bricks and Mortar: The Revenue Impact of Opening Physical Stores in a Multichannel Environment," Journal of Retailing, Elsevier, vol. 91(2), pages 182-197.
    3. Jing Zhu & Muhammad Awais Shakir Goraya & Yu Cai, 2018. "Retailer–Consumer Sustainable Business Environment: How Consumers’ Perceived Benefits Are Translated by the Addition of New Retail Channels," Sustainability, MDPI, vol. 10(9), pages 1-22, August.
    4. Orit Rotem-Mindali & Jesse Weltevreden, 2013. "Transport effects of e-commerce: what can be learned after years of research?," Transportation, Springer, vol. 40(5), pages 867-885, September.
    5. Teller, Christoph & Kotzab, Herbert & Grant, David B., 2012. "The relevance of shopper logistics for consumers of store-based retail formats," Journal of Retailing and Consumer Services, Elsevier, vol. 19(1), pages 59-66.
    6. Chien-Wen Chen & Chiang-Yu Cheng, 2013. "How online and offline behavior processes affect each other: customer behavior in a cyber-enhanced bookstore," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(5), pages 2539-2555, August.
    7. Kollmann, Tobias & Kuckertz, Andreas & Kayser, Ina, 2012. "Cannibalization or synergy? Consumers' channel selection in online–offline multichannel systems," Journal of Retailing and Consumer Services, Elsevier, vol. 19(2), pages 186-194.
    8. Jacobsen, Joyce P. & Kooreman, Peter, 2005. "Timing constraints and the allocation of time: The effects of changing shopping hours regulations in The Netherlands," European Economic Review, Elsevier, vol. 49(1), pages 9-27, January.
    9. E. Santarelli, 2001. "The Diffusion of E-commerce at the Firm Level: Theoretical Implications and Empirical Evidence," Working Papers 428, Dipartimento Scienze Economiche, Universita' di Bologna.
    10. Maier, Erik & Bornschein, Rico & Manss, Rico & Hesse, Damian, 2023. "Financial consequences of adding bricks to clicks," International Journal of Research in Marketing, Elsevier, vol. 40(3), pages 609-628.
    11. Ibrahim Mutambik & Abdullah Almuqrin & Fawaz Alharbi & Majed Abusharhah, 2023. "How to Encourage Public Engagement in Smart City Development—Learning from Saudi Arabia," Land, MDPI, vol. 12(10), pages 1-16, September.
    12. George, Morris & Kumar, V. & Grewal, Dhruv, 2013. "Maximizing Profits for a Multi-Category Catalog Retailer," Journal of Retailing, Elsevier, vol. 89(4), pages 374-396.
    13. Numberger, Siegfried & Rennhak, Carsten, 2011. "Drivers of the future retailing environment," Reutlingen Working Papers on Marketing & Management 2006-04, Reutlingen University, ESB Business School.
    14. Eymann, Torsten (Ed.), 2007. "Tagungsband zum Doctoral Consortium der WI 2007 [WI2007 Doctoral Consortium Proceedings]," Bayreuth Reports on Information Systems Management 24, University of Bayreuth, Chair of Information Systems Management.
    15. Bilgicer, Tolga & Jedidi, Kamel & Lehmann, Donald R. & Neslin, Scott A., 2015. "Social Contagion and Customer Adoption of New Sales Channels," Journal of Retailing, Elsevier, vol. 91(2), pages 254-271.
    16. Garnier, Marion & Poncin, Ingrid, 2019. "Do enriched digital catalogues offer compelling experiences, beyond websites? A comparative analysis through the IKEA case," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 361-369.
    17. Sascha Hoogendoorn-Lanser & Marie-José Olde Kalter & Nina T. W. Schaap, 2019. "Impact of different shopping stages on shopping-related travel behaviour: analyses of the Netherlands Mobility Panel data," Transportation, Springer, vol. 46(2), pages 341-371, April.
    18. Richard, James E. & Purnell, Fruen, 2017. "Rethinking Catalogue and Online B2B Buyer Channel Preferences in the Education Supplies Market," Journal of Interactive Marketing, Elsevier, vol. 37(C), pages 1-15.
    19. Sendy Farag & Jesse Weltevreden & Ton van Rietbergen & Martin Dijst & Frank van Oort, 2006. "E-Shopping in the Netherlands: Does Geography Matter?," Environment and Planning B, , vol. 33(1), pages 59-74, February.

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