Do Online Customers Make Better Purchases? - An Analysis of Point of Sale Choice, Purchase Decision Quality and the Effectiveness of Customer Loyalty Programs

Based on a large-scale, unique longitudinal dataset comprising more than 4m transactions, I first investigate drivers of customers’ point of sale choice (online vs. counter PoS). Second, I study which PoS yields higher purchase decision quality. I establish whether linkages hold across different customer segments and pricing contexts, and examine consumers’ learning effects over time. Third, I study customer loyalty in both distribution channels, and explore how loyalty develops across different segments, pricing contexts, and levels of decision quality. Hypotheses are tested in the context of two-part pricing schemes in travel services. Purchase decision quality is in fact dependent on the chosen PoS. Besides, it largely varies across customer segments; however, learning effects do occur over time. Loyalty depends on pricing contexts and segments as well as on previous decision quality and PoS choice. The results provide implications for upgrading consumers’ purchase behavior and acquisition and retention in each channel.