Shopping distancing

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Travel cost is a primary factor driving consumer choice of shopping destination. The literature has suggested that an increase in travel cost reduces shopping visits. However, we develop a choice model that predicts that with an increase in travel cost consumers tend to substitute shopping at distant venues for nearby options. That is, an increase in travel cost leads to an increase in shopping visits for some customers. We exploit the natural shock brought by the COVID-19 pandemic to empirically validate our theory, using population-wide data sets of mall visits from four cities in two countries. Our empirical results show that there is a threshold in the order of 500 meters from the shopping destination below which visits increased due to increased travel costs during the pandemic lockdown. During the reopening phase, the threshold becomes larger or smaller depending on the type of economic recovery. We provide further evidence that this phenomenon is driven by customer choices showing that ability to choose exacerbates the impact of travel cost. Our findings suggest that urban mobility restrictions, which increase travel costs, reduce visits from those living far away, but may lift demand from locals.
Bibliographic citation: VALENTÍ, A. (2022). Shopping distancing. The Impact of travel cost on shopping destination choices. 44th Annual ISMS Marketing Science Conference. INFORMS Society for Marketing Science.
Date: 01/06/2022
Author(s): Albert Valentí
Document type: Conference presentation
Department: Marketing