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Window shopping

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  • Oz Shy
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Abstract

The terms "window shopping" and "showrooming" refer to the activity in which potential buyers visit a brick-and-mortar store to examine a product but end up either not buying it or buying the product from an online retailer. This paper analyzes potential buyers who differ in their preference for after-sale service that is not offered by online retailers. For some buyers, making a trip to the brick-and-mortar store is costly; however, going to the store to examine the product has the advantage of mitigating the uncertainty as to whether the product will suit the buyer's needs. The model shows that the number of buyers engaged in window shopping behavior exceeds the optimal number, both under duopoly and under joint ownership of the online and walk-in store outlets.

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File URL: http://www.bostonfed.org/economic/wp/wp2013/wp1304.htm
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File URL: http://www.bostonfed.org/economic/wp/wp2013/wp1304.pdf
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Bibliographic Info

Paper provided by Federal Reserve Bank of Boston in its series Working Papers with number 13-4.

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Date of creation: 2013
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Handle: RePEc:fip:fedbwp:13-4

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Keywords: Consumer behavior;

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  1. Cao, Xinyu (Jason), 2012. "The relationships between e-shopping and store shopping in the shopping process of search goods," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(7), pages 993-1002.
  2. Jean-Jacques Laffont & Jean Tirole, 2001. "Competition in Telecommunications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262621509, December.
  3. Brown,Stephen J. & Sibley,David Sumner, 1986. "The Theory of Public Utility Pricing," Cambridge Books, Cambridge University Press, number 9780521314008, October.
  4. Friberg, Richard & Ganslandt, Mattias & Sandström, Mikael, 2001. "Pricing Strategies in E-Commerce: Bricks vs. Clicks," Working Paper Series 559, Research Institute of Industrial Economics.
  5. Xinyu Cao & Zhiyi Xu & Frank Douma, 2012. "The interactions between e-shopping and traditional in-store shopping: an application of structural equations model," Transportation, Springer, vol. 39(5), pages 957-974, September.
  6. Cox, Anthony D. & Cox, Dena & Anderson, Ronald D., 2005. "Reassessing the pleasures of store shopping," Journal of Business Research, Elsevier, vol. 58(3), pages 250-259, March.
  7. Shaked, Avner & Sutton, John, 1982. "Relaxing Price Competition through Product Differentiation," Review of Economic Studies, Wiley Blackwell, vol. 49(1), pages 3-13, January.
  8. J. Yannis Bakos, 1997. "Reducing Buyer Search Costs: Implications for Electronic Marketplaces," Management Science, INFORMS, vol. 43(12), pages 1676-1692, December.
  9. Elie Ofek & Zsolt Katona & Miklos Sarvary, 2011. ""Bricks and Clicks": The Impact of Product Returns on the Strategies of Multichannel Retailers," Marketing Science, INFORMS, vol. 30(1), pages 42-60, 01-02.
  10. Lorin M. Hitt & Frances X. Frei, 2002. "Do Better Customers Utilize Electronic Distribution Channels? The Case of PC Banking," Management Science, INFORMS, vol. 48(6), pages 732-748, June.
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