Product Discovery and Consumer Search Routes: Evidence from a Mobile App

Abstract

When shopping online, consumers can reach a product detail page via multiple routes: by going through a category page (e.g., women's shoes), by directly typing the product name in the search field (e.g., Nike Women's Air Max), by going through a sales page (e.g., the shoes sale page), etc. Previous research has largely ignored how consumers choose between these routes and how, in turn, these routes affect which products consumers subsequently discover, search, and potentially purchase. Our novel panel data from a mobile shopping app contain detailed information on consumer browsing for sandals over a time period of six months. To capture consumers' decisions of not only what to search and buy, but also of the route through which to discover products, we build on the framework of Greminger (2021, 2022) and estimate a model of discovery, search, and purchase. We use our model to quantify preferences, discovery costs, and search costs, and show that product search costs are four times larger than product discovery costs. Via counterfactuals, we quantify the value of a search route to the platform and examine how app design changes influence product discovery and consumer purchase behavior.

Keywords: Consumer Search, Awareness, Product Discovery, Mobile Commerce, Apparel Industry

JEL Classification: D83, L81, M31