Modeling Consumers' Purchase and Delivery Choices in the Face of the Information Age

Abstract

A major trend, recently drawing much attention, is the employment of new technologies in retailing. This involves a shift from some aspects of the traditional store format towards the introduction of electronic means of performing retail activities. E-retail encompasses three main activities—specifically, a product search activity (often referred to as a product-evaluation or information-gathering facility), an online purchase function, and the product delivery capability. Early studies have asserted that information technology would generate a revolution in the retail sector, owing to the potential of the web to reduce the costs of transaction, transportation, and searching. Yet the proportion of virtual shopping is significantly smaller than that of traditional shopping. An understanding of this difference can be obtained by modeling consumer choices. This paper will examine the different shopping activities, by modeling both purchase and delivery choices. Identifying the reasons that consumers use virtual (electronic) modes is crucial in order to influence the share of electronic shopping and to understand the potential impacts. Modeling the probability of using e-shopping should reveal the significant variables that may encourage or discourage the use of this mode of shopping.