The effort involved in shopping and personal attitudes influence the decision on the shopping source in a multi-channel context - study takes a look at individual customers
The hurdles associated with the purchase, such as shipping costs or travel time to the shop, are central to the individual choice of shopping source. When deciding between online shops and local retailers, the personal assessment of purchasing safety, environmental aspects and working conditions also plays a role. This is shown by a study using microeconometric models at the Karlsruhe Institute of Technology (KIT). Partial results of the representative study, funded by the German Research Foundation, have been published in Papers in Applied Geography and Raumforschung und Raumordnung.
The data collection for the evaluations now available took place in 2019 - i.e. before the pandemic-related restrictions on stationary shopping. "During the lockdowns, stationary retail outlets for non-daily needs were and are closed. In addition, there are voluntary behavioural changes in the population. This naturally shifts purchasing power to online retail," explains Dr Thomas Wieland, head of the project "On the Spatial Effectiveness of Online Retailing" at the KIT Institute for Geography and Geoecology (IfGG), which was launched in 2018. In its second phase, which began in April 2021, the project, which will run until 2022, will therefore investigate, in addition to the previous objectives, whether the temporary lockdowns have led to a sustainable shift in favour of online retail.
Multitude of analogue and digital shopping channels
The digitalisation of retail is increasingly influencing city centres. Consumers can choose from a variety of analogue and digital shopping channels (multi-channel) from online shops to local specialised shops to cross-channel retail, which links the stationary shop with an online shop. "In principle, most customers buy via both shopping channels, but they have certain personal preferences, whereby the place of residence and subjective attitudes play a role," says Dr Thomas Wieland, head of the project "On the Spatial Effectiveness of Online Retailing" launched in 2018 at the Institute for Geography and Geoecology (IfGG) at KIT. "Younger people tend to buy online more often than older people," says the scientist. However, the preference for a certain shopping channel depends at least as much on subjective attitudes, such as scepticism about whether one's own data is protected when buying online or whether the product is actually delivered as desired. Wieland also mentions the personal assessment of whether online trade has a negative impact on the environment or whether the working conditions of suppliers are bad as "one of many factors".
Hurdles in the purchasing process are decisive
"The transaction costs, i.e. the various hurdles that have to be overcome in the purchasing process, are central to the purchasing decision," emphasises the economic geographer. Whether the nearest stationary electronics store can be reached in five or 25 minutes, whether shipping costs three or six euros, but also whether it is raining at the moment and there is little desire to get wet on the bike ride to the shop - all this influences the trade-off between online and offline purchase, although not all these explanatory variables can be examined. "In the grocery trade, good accessibility is a decisive factor," says Wieland.
For his study related to the electrical and grocery trade, Wieland and his team conducted a detailed survey of a total of 1400 consumers in the more urban region of Mittlerer Oberrhein with its major centre Karlsruhe and in the more rural southern Lower Saxony with its major centre Göttingen. The answers were analysed with the help of microeconometric models. "The models operate at the level of the individual consumer and the individual online or offline shopping source," explains the expert. "Until now, there was a lack of studies that combined different possible explanations for the behaviour."
Integrated online shop strengthens the retail trade
Two-thirds of respondents said they use the internet to find out about products and compare prices, regardless of whether they end up buying online or offline. The model analyses showed that suppliers who have an integrated online shop have significantly higher customer inflows. "Cross-channel integration can be a good way for owner-operated stationary retail businesses to improve their own market position," Wieland emphasises. Information about availability is an important parameter, he says: "If someone sees online that the smartphone they want is in stock in their own city centre, they may immediately set out to buy it there." However, some medium-sized businesses cannot be found online, he said. "Co-operatives such as those in the electrical trade or city management can provide support here and make businesses visible online," says the scientist. He emphasises that it is important to consider online retailing in regional and urban planning and to include it in business location and expansion planning.
Click and collect: still little in demand before the lockdowns
The study also shows: city dwellers are still more inclined to buy online. Only a very small effect was found in the study for the Click and Collect service - however, the 2019 data collection took place before the pandemic-related restrictions on stationary shopping. In its second phase, which began in April 2021, the project includes another study area in Saxony-Anhalt and, in addition to the previous objectives, investigates whether the temporary lockdown has led to a sustainable shift in favour of online retail.
The German Research Foundation (DFG) is funding the project "On the Spatial Impact of Online Retailing" with around 200,000 euros for personnel and material resources.
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