Tradeoffs between Time and Monetary Attributes for Consumers' Shopping Channel Choices

Tradeoffs between Time and Monetary Attributes for Consumers' Shopping Channel Choices

Ming-Hsiung Hsiao (Shu-Te University, Taiwan)
DOI: 10.4018/978-1-4666-9787-4.ch037
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1. Introduction

Since 1980s, consumers’ shopping channels have greatly changed. In addition to physical store shopping, by using ICT (information and telecommunications technology), teleshopping such as online shopping and mobile shopping has become an important channel for consumers to conduct shopping activities. Literature on online shopping are numerous, most of which falls into two categories. One is concerned about consumers’ cognition and feelings towards online shopping environment, such as Liao and Cheung (2001), Miyazaki and Fernandez (2001), Clemes et al. (2014), Park et al. (2015), etc., and the other about consumers’ cognition and feelings towards shopping websites such as D'Ambra and Rice (2001), Kowtha and Choon (2001), Aladwani and Palvia (2002), Cebi (2013), Yang et al. (2015), etc.

In the field of transportation planning, researchers are more concerned about how these new shopping channels may influence transportation demand (Mokhtarian &Meenakshisundaram, 1999; Gould & Golob, 1997). From the viewpoint of transportation, the most obvious difference between online shopping and physical store shopping is about the trip generation. If consumers adopt physical store shopping, they have to go out and generates shopping trips. If they adopt online shopping, they don’t generate personal shopping trips, but the later product delivery generates freight transportation. Moreover, some consumers may search for a product online and check it out in-store, but finally buy it online. Alternatively, they may search for a product and check it out online, but finally buy it in-store. All these hybrid or mixed types across different shopping channels actually complicate their influence on transportation demand.

Consumers’ shopping decision-making behavior is complex. Most of the well-known classical consumer decision-making models were developed in the 1960s and 1970s. These consumer decision-making models are known as ‘Grand Models’ which defines the stages of the consumer decision-making process by a step-by-step sequential structure: (1)need recognition, (2)information search, (3)evaluation of alternatives, (4)purchase decision, and (5)post-purchase behavior (Blackwell et al., 2006). Salomon and Koppelman (1988) proposed an analytical framework which divided consumer shopping process into two main steps: shopping and purchase. First, consumers decide which channel to conduct their shopping; e.g., in-store or online, to gather information on products. Second, they decide which channel to make the purchase, re-evaluate (re-gather information), or quit (cancel their shopping decision). Salomon and Koppelman (1988) also believe that shopping activities are important for consumers in two aspects: (1)economics aspect: consumers spend time and money gathering information on products in order to reduce the risk of purchase and improve their utility; (2)psychological aspect: shopping activities offer consumers with fun and pleasure (Tauber, 1972; Bellenger & Korgaonkar, 1980; Marmorstein et al., 1992).

Key Terms in this Chapter

Shopping Channel Choice: Shopping channel choice refers to consumers’ selection among multiple shopping channels including online and offline channels.

Value of Time: Value of time is the monetary valuation of time resource. In empirical studies, it refers to the tradeoff between time and monetary attributes. In the field of transport demand, the value of time saved is the most important source of benefits for transport investment.

Utility Maximization: Utility maximization refers to consumers’ objective to maximize the total value derived from the available resources including income.

Online shopping: Online shopping, also known as e-shopping or Internet shopping, refers to the channel through which consumers can do their shopping activities over the Internet.

Grand Models: Grand models, developed in the 1960s and 1970s, are known as classical consumer decision-making models which clearly defines the stages of the consumer decision-making process by a step-by-step sequential structure.

Physical Store Shopping: Physical store shopping is one of the traditional shopping channels where consumers need to visit physical stores in person to do their shopping activities.

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