Research Article
The Effect of Consumer Regional Migration on Changes in Online Brand Preference
1 Yonsei University, 2 University of California at Berkeley
Published: January 2015 · Vol. 44 No. 6 · pp. 1609-1628
DOI: https://doi.org/10.17287/kmr.2015.44.6.1609
Full Text
Abstract
The offline geography affects online performance by altering the relative attractiveness of the online marketplace over the offline counterpart. We further delve into this offline-online dependency by investigating the effect of consumer migration on online brand preferences. To this end, we focus on the offline environmental changes caused by consumer migration and online brand preferences measured by online brand purchases both before and after migration. Specifically, we aim to answer the following two questions. First, how does a new offline environment change online brand preferences? Second, how do consumers adapt to the new offline environment and change their online brand preferences over time? We obtained the dataset of online purchases from a leading online retailer selling baby diapers and merged this with the publicly available data of geo-demographics. Our empirical analyses provide three interesting findings. First, consumers who have migrated and been exposed to new offline environments are more likely to change online brand preferences compared to those who stay in the same locations. Moreover, the change of online brand preferences favors the brands that become more prominent after migration. That is, those who have experienced migration are more likely to prefer the brands of which offline shares get greater after migration. Lastly, the positive effect of offline brand share on online brand preferences weakens with time as consumers have adapted to the new environment. These empirical findings together demonstrate that offline retail environment still matters for online retailing performance and also environmental changes can trigger the change in consumers’ online brand preferences and in turn, the strength of offline-online inter-relationship. We expect our findings will contribute theoretically and managerially.
