Social Contagion and Trial on the Internet: Evidence from Online Grocery Retailing

Abstract

For a traditional retailer, the size of the customer pool can evolve over time but is largely bounded in space. In contrast, an Internet retailer with the appropriate shipping infrastructure can draw customers from a wide-ranging geographical area (e.g., the entire United States). We examine the trial decision for customers shopping at an Internet grocery retailer. Drawing on literature in economics, marketing and sociology, we conjecture that the trial decision may be subject to social influence or contagion. That is, exposure to the actions of proximate others - either through direct social interaction or passive observation - influences the trial decision of individuals who have yet to experience the service.