Identifying the Determinants of Store Choice in a Multi-Channel Environment: A Hurdle Model Approach

Abstract

Although the established perspective of retail geography is the consumers’ store choice, surprisingly, there is a lack in the investigation of spatial shopping behavior, given the opportunity of online shopping alternatively. The present study attempts to fill this gap by investigating store choice and expenditure flows incorporating both physical and online stores. Based on a representative survey in two German regions, the study employs a revealed-preference approach toward store choice and expenditures taking consumer electronics (CE) retailing as an example. For the analysis of individual shopping behavior, a micro-econometric model, the hurdle model, is applied. Results indicate that channel choice is mainly influenced by spatial, socio-demographic, and psychographic characteristics of the consumers, whilst channel- and store-specific transaction costs – including travel time, delivery time and delivery charges – are main drivers of store choice and expenditures. Furthermore, the cross-channel integration of multi-channel retailers increases the likelihood of such stores being chosen, although this cannot be confirmed for stores providing “click and collect”. It is shown that e-shopping can be integrated into a store choice model, which was originally designed for physical shopping locations only. Both the modeling approach and the results are of significance for retail companies and spatial planning.