Abstract
Research on shelf effects in traditional grocery stores shows that a product's absolute and relative shelf position may strongly affect consumer choices. The authors examine whether and how such shelf effects translate to an online grocery context. We find that a product's choice probability increases when presented on the first screen or located near focal items, especially when the latter are out-of-stock. These primacy and proximity effects have stronger impacts on choice decisions when assortments are more difficult to evaluate and when a clear shelf organization facilitates the use of shelf-based choice heuristics.
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Notes
The software and experimental site were developed by Hypervision, the software company responsible for the e-grocery site. Some adjustments were made to fit our experimental design (e.g., absence of promotions).
Previous research demonstrates that the time compression of several fictitious shopping trips into one experimental session does not preclude realistic dynamic purchase patterns (Burke et al., 1992).
To stimulate participation without endangering the representativeness of the sample, we made participants eligible for small rewards on a lottery basis. The probability of receiving the reward was not linked to task performance but used only to enhance response rates. The reward was sufficiently small to avoid any effects on sample composition or simulated purchase behavior. In line with previous computer-simulated shopping experiments (e.g., Burke et al., 1999; Campo et al., 1999), we stimulate respondents to imitate their normal buying behavior by providing clear task instructions and realistic decision cues (see Section 2.1).
Traditionally, price would be included in the utility function. However, in our experimental setup, prices do not change over time and therefore are strongly linked to the set of attributes that describes the stock keeping unit (SKU). Estimation of a model incorporating both SKU attribute constants and price would lead to serious estimation problems because of the collinearity between the sets of variables.
We test two alternative measures of shelf organization: (1) type of shelf arrangement (by brand or by flavor) and (2) congruency (Morales et al., 2005), which indicates whether shelves are arranged according to the consumer's dominant choice criterion (derived from the postpurchase questionnaire). In neither case does the introduction of the interaction terms provide a significant improvement in model fit. Further analysis reveals that, contrary to our expectations, the perceived degree of shelf organization is weakly related to more objective measures, such as the type of shelf arrangement or the degree of (shelf-choice) congruency. In line with previous studies (e.g., Drèze et al., 1994), this finding points to the need for further research on the underlying factors of shelf organization perceptions.
As we argue previously, consumers are more likely to turn to task-simplifying tactics when they must search for a (replacement) product in a large compared with a small assortment. We expect differences with respect to the sequence, proximity, and asymmetric switching variables among assortments, with more significant effects in large than in small assortments (H1a and H2a). Although we do not explicitly include hypotheses with respect to the moderating effect of assortment size on the tendency to switch asymmetrically to items with specific attributes, a similar logic may hold for such asymmetry variables. The probability that consumers will focus on key product attributes as a heuristic to make easy and effortless decisions is more likely in a large than in a small assortment. Composition also might affect the tendency to use specific asymmetric switching heuristics. Therefore, we do not constrain asymmetric switching variables to be equal across assortments. In contrast, the long-term item preference tendency or the tendency to repurchase the same item is a personality trait that likely is prevalent across assortments (cf. Andrews and Currim, 2002). We confirm the validity of these choices with robustness checks that explicitly test whether variables should be pooled.
We decide for various reasons to keep the attribute-specific coefficients constant. First, mixed logit models have a tendency to be unstable when all coefficients are allowed to vary (Train, 1999). Models in which all coefficients vary, do not converge in any reasonable number of iterations. Fixing the attribute-specific coefficients resolves this instability. Second, Train (2001) indicates that the mixture might be empirically unidentifiable in a model in which, next to final iid extreme-value terms, the item-specific dummy coefficients are assumed to be random. Including a similar distribution (as is the case for the normal and extreme value distribution) results in unstable estimations, because the final iid extreme-value terms in a model with item-specific constants already constitute the random portion of these constants. Robustness checks that explicitly test whether variables should be fixed confirm the validity of our choices.
Ease of processing has a Cronbach's alpha of .814 (.875) for margarine (cereals). We confirm the factor structure through principal components analysis.
In line with previous results, we find that the type of attribute guiding customer choices differs between categories (e.g., Campo et al., 2003). In the cereals category, 70% of the respondents indicated in the postpurchase questionnaire that they place strong emphasis on flavor, whereas only 44% of shoppers mention this criterion for selecting margarine. Margarine choices, in contrast, are strongly guided by brand cues: 49% of margarine buyers mention it as important, whereas only 17% do so for cereals.
Reestimating the model with a transformation of the perceived shelf organization variable to achieve normality does not change the results.
The stock-out asymmetry variables already recognize that, when facing stock-outs, consumers may switch more readily to items of the same size, brand, and/or flavor. Proximity effects thus reflect the impact of product adjacencies over and above attribute-driven switches. The robustness checks provide an additional guarantee that it is proximity, not attribute-based shelf arrangement that drives the results.
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Acknowledgments
The authors acknowledge the financial support of the Fund for Scientific Research, Flanders (FWO-Vlaanderen). The authors are much indebted to the respondents who pretested the experimental design and those who participated in the research. They also thank Patrick De Pelsmacker, Gilles Laurent, Annouk Lievens, Patrick Van Kenhove, Walter van Waterschoot, and Philippe Verbeeck; two anonymous reviewers; and the editor for their helpful suggestions on previous versions of this article.
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Breugelmans, E., Campo, K. & Gijsbrechts, E. Shelf sequence and proximity effects on online grocery choices. Market Lett 18, 117–133 (2007). https://doi.org/10.1007/s11002-006-9002-x
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DOI: https://doi.org/10.1007/s11002-006-9002-x