Summary: We use data from an online store to study consumers’ in-store shopping behavior.Buyers’ browsing time is used as a proxy for effort and study how this effort changes dynamically over the shopping process. We find that for low-value grocery products, most buyers are in an “inattentive” state while making purchase decision. But a price reduction is likely to make them transition to an “attentive” state when they are more price-conscious. Higher priced brands are at a disadvantage when consumers are in the “attentive” state. Therefore, brands should not reduce prices in an indiscriminate manner in their effort to push the sales.
Conference: Frontiers of Research in Marketing Science Conference, University of Texas at Dallas, Dallas, TX, February 2008.