Online Search and Buying Behaviour in Consumer Markets

Online search behaviour is analysed using a novel methodology based on an international panel of two million users. Consumer search is measured by the size and distribution of online consideration sets and the use of price comparison engines in a range of US and UK consumer markets. It is shown that most online researchers who are considering competing suppliers only view two or three competitor websites, which results in an average online consideration set of between 2.1 and 2.8, regardless of the use of price comparison websites. Consumer perceived risk is negatively correlated with the size of online consideration sets and online price competition intensity. Using international data from fifteen countries it is shown that online research and online purchasing are negatively correlated with shop density. The implications for managers are outlined, in particular the importance of branding and advertising to improve the likelihood of inclusion in online consideration sets.