Predicting and explaining patronage behavior toward web and traditional stores using neural networks: a comparative analysis with logistic regression

TLDR: Neural network models are developed, which are known for their capability of modeling noncompensatory decision processes, to predict and explain consumer choice between web and traditional stores, and indicate that the influential factors are different across product categories.

Abstract: Web stores, where buyers place orders over the Internet, have emerged to become a prevalent sales channel. In this research, we developed neural network models, which are known for their capability of modeling noncompensatory decision processes, to predict and explain consumer choice between web and traditional stores. We conducted an empirical survey for the study. Specifically, in the survey, the purchases of six distinct products from web stores were contrasted with the corresponding purchases from traditional stores. The respondents' perceived attribute performance was then used to predict the customers' channel choice between web and traditional stores. We have provided statistical evidence that neural networks significantly outperform logistic regression models for most of the surveyed products in terms of the predicting power. To gain more insights from the models, we have identified the factors that have significant impact on customers' channel attitude through sensitivity analyses on the neural networks. The results indicate that the influential factors are different across product categories. The findings of the study offer a number of implications for channel management.