The Effects of Market Structure on Online Consumer Search: A Cross-Sector Analysis of the German Retail Market

Holland, C. P., Jacobs, J. A.

Abstract

Online panel data is an important category of ‘big data’ and creates new research opportunities to analyse online behaviour. The search process is a key aspect of online behaviour and an essential element of the competitive process. Consumer search is analysed in a cross-sector study of the German retail market. Two constructs are used to measure the search process: the online consideration set, and time spent per brand. The online consideration sets range from 2.31 to 2.6, which are much smaller than expected compared to pre-Internet results and expected outcomes from economic theory. However, they are consistent with the few studies that used online panel data in the US and the UK. It is shown that the online consideration set is a function of market structure, and time spent per brand is related to product complexity and risk. Some possible theoretical explanations are proposed to explain the observed search process, and the managerial implications of the results are outlined.