Does the online channel pay? A comparison of online versus offline information search on physical store spend

Abstract

The Internet has transformed consumer behaviour, particularly the manner in which consumers search for information prior to making a purchase. However, we know relatively little about the relationship between consumer information search strategies prior to visiting a physical retail store and the amount of money spent on product purchases. This raises an important question for retailers; does the online channel pay? We test this notion in a study of 1275 consumers across the four retail categories of Clothing and Footwear, Beauty and Skincare, DIY Hardware, and Kitchen and Bathroom Renovations. We find that in all categories, except for Clothing and Footwear, consumers who used the Internet to search for product information prior to making a physical store purchase, spent more money when purchasing. The fact that consumers seem to spend more in-store after conducting an online search (compared to those that search offline) is somewhat counter-intuitive to traditional consumer behaviour theory, in that as part of the consumer's search motivation, it is traditionally assumed that there is a desire to obtain the best price (i.e. spend less). This finding therefore challenges traditional perspectives of value-seeking behaviour and suggests that the Internet is a critical channel for retailer engagement, given it can potentially engage consumers in such a way that leads to increased in-store spend.

Keywords:

• retailing
• retail channel
• online information search
• in-store behaviour

Acknowledgements

The authors gratefully acknowledge Google Australia for their support in this research project, which enabled the independent collection and analysis of the data. In particular, the authors would like to thank Ross McDonald for his support at various stages throughout the research. Furthermore, we would like to thank Jason Pallant, Lisa Tartaglia and Selma Mehmedovic for their comments and assistance in the preparation of this manuscript.

Notes

1. For the purpose of this study we defined online information search as search on the Internet, and offline information search as physical store visits.