The Effects of the Online and Offline Purchase Environment on Consumer Choice of Familiar and Unfamiliar Brands

We replicate and extend the work of Degeratu, Rangaswami, and Wu (2000) and Danaher, Wilson, and Davis (2003). Using econometric analyses of purchase behavior, both studies found a larger role of brands in purchases in online versus offline shopping environments. We use two controlled randomized experiments, eliminating certain alternative explanations for the prior findings, replicating those findings when offline shopping included sensory information, and showing the psychological mechanism for why familiar brands have a greater relative advantage online than offline. In a third experiment, we tried and failed to reverse the effect by using diagnostic online reviews.