The Impact of Product Location Changes on Habits, Search, and Purchase Decisions

Abstract

Consumers’ habitual buying behavior imposes barriers on marketers who wish to acquire new customers. In this paper, we consider one possible disruptor of consumers’ habitual buying behavior in a physical retail environment – changing product locations – and study its impact on consumer decisions. Because locations generally reflect underlying demand conditions, identification of causal effects is often difficult. Additionally, a lack of in-store data on both search and purchase decisions makes it difficult to determine which decision-making stage is affected when product locations change. To address these challenges, we use the exogenous timing of an aisle reset in our focal product category (juices), and we pair household and store-level sales data with individual in-store eye-tracking measures, which capture search behavior. We show that 1) consumers search longer, for a more diverse set of products, and spend less time on each searched product in response to product location changes; 2) changing the locations of consumers’ previously purchased products has spillover effects: consumers are more likely to search and buy products that are close to the old and the new location of their previously purchased products; 3) other in-store marketing strategies, e.g., price promotions, can moderate the effect of product location changes.

Keywords: product location, search, habitual buying behavior, eye-tracking data, panel data