1 What Drives Channel Choice in Grocery Shopping?*

Research Roundtable and the 2009 NUS-Hanyang University joint seminar for valuable comments and suggestions. The usual disclaimer applies. 2 We provide a descriptive study of a household’s decisions on where to shop, when to shop and how much to spend for grocery products in the same grocery chain’s online and offline stores. We observe households that shop interchangeably in the online and offline stores and make a majority of their purchases in the chain. The data cover all product categories of packaged goods and perishables purchased by households at the chain. For each household we identify the top 30 categories that are specific to that household and that account for a majority of the household’s expenditures in the chain. We relate a household’s shopping decisions to proxies for the household’s needs in each of its top 30 categories, price promotions in those categories, perishability and heaviness/bulkiness of the categories, and household and store characteristics. We specify a multinomial probit model for store visit and channel choice decision, a competing-risks continuous-time proportional hazard model for trip timing, and a regression model for basket expenditures. We allow all drivers of the shopping decisions to have channel-specific effects and tak