Make Every Second Count: Time Allocation in Online Shopping

Abstract

We study how time scarcity constrains various dimensions of consumer search. We construct a novel dataset that tracks how consumers allocate shopping time across retailers, categories, and products in online retail. Using weather shocks as exogenous shifters of time scarcity, we show that when time is less scarce, consumers do not expand search to additional retailers. Instead, they deepen search by examining more products within a category and broaden it by searching in additional categories, with both effects contributing to additional purchases. Building on these findings, we then estimate a time allocation model to study how consumers reallocate time in response to price promotions by an online retailer. We find that during a promotion, the consumer spends more time in the promoted category, but this extra time is drawn entirely from non-shopping activities rather than from other categories. Thus, promotions do not cannibalize sales in other categories of the same retailer through consumers' time allocation decisions.

Keywords: Consumer Search, Time Use, Ecommerce, Information Acquisition

JEL Classification: D12, D80, D83, J22, L81