How Efficient Consumers Buy: a Shopping System

ABSTRACT - This paper introduces a systematic approach to shopping used by efficient consumers. The system is both descriptive and normative. It describes the behavior of some consumers and recommends the approach for those who want to increase purchasing power. Intense competition within and across types of stores selling similar goods, a wider assortment of product variants, a decrease in quality variability, and a myriad of promotional techniques have led to opportunities for consumers to increase purchasing power.


Mary L. Carsky and Roger A. Dickinson (1998) ,"How Efficient Consumers Buy: a Shopping System", in AP - Asia Pacific Advances in Consumer Research Volume 3, eds. Kineta Hung and Kent B. Monroe, Provo, UT : Association for Consumer Research, Pages: 100-106.

Asia Pacific Advances in Consumer Research Volume 3, 1998      Pages 100-106


Mary L. Carsky, University of Hartford, U.S.A.

Roger A. Dickinson, University of Texas at Arlington, U.S.A.


This paper introduces a systematic approach to shopping used by efficient consumers. The system is both descriptive and normative. It describes the behavior of some consumers and recommends the approach for those who want to increase purchasing power. Intense competition within and across types of stores selling similar goods, a wider assortment of product variants, a decrease in quality variability, and a myriad of promotional techniques have led to opportunities for consumers to increase purchasing power.

Studies conducted during the eighties focused on shopping enjoyment, browsing, and shopping as recreation activity (Bloch, Sherrell, and Ridgway 1986; Sproles and Kendall 1986; Smith 1989; Prus 1991; Hafstrom, Chae and Chung 1992). Many affluent consumers of the 80’s were affected by recessions in the early nineties. In addition, both baby boomers and baby busters are more time pressed than before. They are juggling parenthood and career. Little time is available for leisure activities and the shopping binges of the 80’s and shopping as enjoyment are no longer the mode. The marketplace too has changed. Within the United States, consumers have nearly unlimited choice as a result of product and brand proliferation as well as the explosion in the number and types of retail formats.

This paper proposes a shopping system that may be used by efficient consumers. We define efficient consumers as being knowledgeable about prices, paying attntion to retail advertisements, taking advantage of price promotions, stocking up on goods that are on sale, and likely to trade down to lower-priced brands in many product categories (Carsky, Dickinson and Smith 1995). Efficient consumers are high on purchasing involvement as described by Slama and Taschian (1985). They are likely to be deal-prone, sale-prone, and price-mavens (Lichtenstein, Ridgway and Netemeyer 1993)..

The proposed shopping system is consistent with a changed marketplace and changed household behavior. The system is both descriptive and normative. It is descriptive in that it is patterned on the behavior of some consumers. It is normative in that it recommends a shopping strategy that will increase purchasing power. First, we offer a rationale for the proposed shopping system by describing changes in the marketplace and changes in household behavior that have contributed to changes in shopping. Next we present and describe the model and finally, we offer implications for the marketplace.


Much has changed in the market place. The structure of the retail industry has changed. By most traditional measures the United States is overstored (Berry 1997; Dickinson and Cooper 1992; Gersh 1990). Intense competition within and across types of stores selling similar goods, a wider assortment of product variants, and a myriad of promotional techniques have increased the opportunities for shoppers to increase their purchasing power. A vast number of products, brands, and brand extensions are available at mass merchandisers, warehouse clubs, superstores, and manufacturers’ outlets. The continuous flow of new products and product line extensions has resulted in intense competition for shelf space at the retail level.

Quality and Value

In the eighties many consumers were status oriented; they sought designer labels and luxury goods (Power, Konrad, Cuneo and Treece 1991). For example, the decade of the eighties spawned a number of new luxury automobiles such as the Lexus and the Acura; in addition, sales of Volvo, Saab, and BMW rose substantially. In the nineties, value consciousness increased. Where value has been defined as " an interactive relativistic preference experience" (Holbrook 1994), consumers’ preferences for many product categories began to focus on price. Thus, value for many consumers, came to be measured in terms of the " ratio of quality received to price paid in a purchase transaction" (Lichtenstein, et al. 1993).

Recent studies have found that consumers perceive all brands to be alike in a number of categories (Alsop 1990; Giges 1992; Smith and Clurman 1997). In the absence of any specific benefit in choosing one brand, products are perceived to be similar and consumers tend to buy at the best price (Rice 1992).

Consumer perceptions of product quality are well founded. The general level of "substantive" quality has increased (Carsky, Dickinson and Smith 1995; Hjorth-Andersen 1988, 1991; Grunewald, Faulds, and McNulty 1993). Further, both the actual and perceived quality variability of products has decreased (Carsky, et al. 1995; Landler 1991; Quelch and Harding 1996). Voluntary and mandatory product standards such as the DOS and Window95 operating systems, the EPA standard for auto emissions, the R rating for insulation, energy labels for major appliances and nutritional labeling on foods havecontributed to the leveling of quality and the elimination of unacceptable products from the marketplace (Carsky et al. 1995).

Brand Loyalty and Brands

Consumers perceive more products as commodities distinguished primarily by price. Brand loyalty, defined as commitment to a brand, has decreased. Increased purchasing on coupons has eroded brand loyalty and increased price sensitivity (Papatla and Kishnamurthi 1996). On average and across product categories only 26 percent of consumers are reportedly brand-loyal (Thompson 1997).

The erosion of brand loyalty and perceptions of product parity have contributed to the growth of private label goods. Private label goods now represent 18 percent of sales in general merchandise categories and 14 percent of supermarket sales (Hoch 1996; Kahn and McAlister 1997). Increased offerings of private label products have also been attributed to improved product quality over the past ten years, the growth of alternative retail formats such as warehouse clubs, and expansion into new product categories such as diapers and health and beauty aids (Quelch and Harding 1996). National chains, such as Wal-Mart, have sufficient sales volume to support a private brand. Furthermore, the success of private labels among European retail chains, which typically are national chains, serve as models for increasing store profitability through private labels (Quelch and Harding 1996).

Price Variation and Price Promotion

Numerous studies of specific categories have observed dramatic price differences at one point in time and over time (Cude 1987, Eastwood 1988, Pashigian 1988, Jannuzzi and Dardis 1994, Donnellan 1996). After two decades of price dealing, most consumers agree that it is not necessary to pay full price because a lower price can be found (Dhar and Hoch 1996; Smith and Clurman 1997).

Dodson, Tybout and Sternthal (1978) applied self-perception theory to predict response to price changes. They posited that if a product purchase was induced by an external cause such as a price promotion as opposed to an internal cause (brand preference), the likelihood of repurchasing would be low. More recently Kalwani and Kim (1992) based their empirical examination on expectation theory. They hypothesized that the price consumers expect to pay decreases with an increase in the frequency of price promotion and with the depth of price promotions. Lichtenstein, Ridgway and Netemeyer (1993) found that consumers who responded to price promotions were knowledgeable about prices and used price information effectively; they were not simply 'deal-prone.’ The most general conclusion of recent studies is that consumers are conditioned to buy when prices are discounted.


The household has changed over time in ways that have altered shopping activities. The two career family is the norm. Leisure time has decreased, and many consumers are spending less time shopping (Lieber 1993). In addition, shopping activity is being distributed among members of the household (Polegato and Zaichkowsky 1994). Fragmentation of the work place and growth of the two career family have substantially increased the mount of automobile travel (El-Badry and Nance 1992). Expressway systems are "easy on and easy off," providing households ready access to shopping. Indeed, household members pass supermarkets as well as stores selling fashion, specialty goods, and general merchandise and could pass many more in their day-to-day activities without greatly increasing time and travel costs.

Dual earner families are seeking value for the dollar and are rejecting high quality status goods if the price is perceived to be too high (Rice 1992). This represents a dramatic shift from the eighties when they were motivated by prestige and convenience, both in the types of products and the way in which they shopped (Power, et al. 1991; Rice 1992; Therrien 1993; Standard & Poor’s 1997).

Consumer behaviorists and financial advisors are advocating hoarding or stockpiling. They point to a return on investment as high as 40 percent which is far beyond the returns possible at a reasonable risk level in financial markets (Deveny 1992). Dual earner families whose incomes have risen over the past decade have the financial resources to stockpile goods (Green and Welniak 1991).


A shopping system is introduced that reflects the behavior of efficient consumers. The system enables consuming units to buy more effectively. Efficient consumers who follow the system are responding to the intense competition created by an overstored environment.. The system is designed to take advantage of retail price variability at one point in time and over time. It is based on consumer understanding and knowledge of marketplace behavior and retailer strategy. The model is most appropriate for products purchased in supermarkets, mass merchandisers, department and specialty stores. It is less applicable to situations where negotiation of the final price is an important part of the transaction and to service transactions where performance is more variable.

Successful implementation of the model rests on five key assumptions about household behavior. The first assumption is that the household uses the management process (Deacon and Firebaugh 1981). That is to say, that household members have the ability to plan, to anticipate household product needs over a designated time period, and to set minimum acceptable quality standards. Minimum acceptable standards in the relevant product categories must be determined a priori. Implementation of the plan requires that buying needs be approached systematically with members applying discipline to purchasing behavior. Finally, through post-search and post-purchase evaluation, the process is controlled.

The second assumption is that the household has adequate financial resources and storage facilities. Both money and storage space are necessary to stockpile quantities of repeat purchase goods. The household must be able to purchase shopping and searh goods when exceptional opportunities are presented rather than when the need is imminent.

The third and fourth assumptions eliminate many extensive cost-benefit tradeoffs. The third assumption is that household members are willing and able to are willing and able to incorporate shopping into routine travel patterns, thus minimizing additional travel. In going to and from work or other activities, household members pass numerous outlets; search and shopping become by-products of other travel activities. The ability to incorporate shopping into travel is facilitated by extended store hours across a range of retail outlets. The fourth assumption is that the household has sufficient discipline to limit its purchasing by following the guidelines of the model.

The fifth and final assumption is that household members undertaking the shopping activities derive utility from the shopping experiences. Utility can be derived in several ways. First, some people simply enjoy shopping for bargains and obtain satisfaction from careful shopping (Hafstrom, Chae and Chung 1992). Alternatively, some view shopping activity as productive work, and thus derive utility from the accomplishments (Solberg and Wong 1991). Marmorstein, Grewal and Fishe (1992) examined the value of time spent in shopping and found that wage rate, overtime premium and shopping enjoyment contributed to consumers’ subjective value of time spent in price search.

Finally, utility can be derived from the social aspects of being efficient consumers. Some who follow the system may be price mavens, who desire to be informed about market place prices in order to transmit the information to others (Lichtenstein, et al. 1993). Finally, some may "frame" shopping activities as a set of games, competing with the marketplace (Rice 1992).

The Shopping Model is presented in Figure 1. As shown, the model incorporates identified needs, a travel system, and a set of acceptable stores which are integrated into a continuous search process.

1. Household Needs. Household needs form the basis for implementing the system. Needs for non-durable, consumable goods as well as for shopping and specialty goods such as durables and clothing are considered. The earlier a need is recognized, the more the household unit will have an opportunity to take advantage of the retail system.

2. Travel System. Regular travel patterns of household members determine where they are most likely to shop. The stores passed in route to work and other activities comprise the initial evoked set. Travel patterns can often be modified to increase the number of accessible stores.

3. Acceptable Stores. Stores in the evoked set are classified as either acceptable or not acceptable. Acceptability is dependent on individual tastes and preference, merchandise policies, customer service, and pricing policies. The benefits to the household will be greater if (1) the number of acceptable stores is larger and (2) the acceptable set includes retailers with varying pricing policies. For example, if the set of stores uses differing strategies such as everyday low prices, deep discountCmany loss leaders, extra value couponing, high service, or varying combinations of these, savings to consumers will be considerably higher than if only one store type is available.



4. The Search System. In the model, search encompasses the purchase process and is on-going. Search is conducted by scanning acceptable stores on a regular basis and by checking newspaper advertisements and other sources of price information. Regular scanning of the outlets is essential in the contemporary marketplace characterized by frequent mardowns and unadvertised specials.

5. A set of Acceptable Brands or Product Variants. Brands or product variants are categorized as acceptable or not acceptable. The acceptable set is comprised of those which meet the household’s minimum substantive standards for quality and performance. Increased purchasing with coupons has been found to erode brand loyalty thereby leading to an increased number of variants that are acceptable to the consumer (Papatla and Krishamurthi 1996) The more alternatives that remain in the acceptable set, the higher the probability of obtaining a better value.

6. Price Familiarity. Understanding of retailer behavior regarding pricing strategies and policies along with awareness and knowledge of normal prices and sale prices for the items and brands in the acceptable set increases with search activity. Some of the information is actively acquired by monitoring newspaper advertising, but much is gathered passively as a by-product of search (Mazis 1988). Price familiarity is defined as being knowledgeable about prices is critical to determining the price which will trigger the purchase of shopping or specialty goods and the quantity of consumable goods to be purchased at a given price.

7. Trigger Price. Previous research has found that the availability of coupons and frequent price promotions lead to price sensitivity (Papatla and Krishnamurthi 1996). The household sets a price it will pay for an acceptable brand. Trigger prices, determined a priori as a result of price familiarity and experience with frequent and deep price discounts (Kalwani and Kim 1992) activate a purchase decision. For example, the search cues might be, "I have six cats to feed. I routinely pass stores A, B, C, D; brands X, Y, Z are acceptable." A price of 5 cans/$1.00 of brand Z might be a trigger to purchase a quantity sufficient for a designated time period. The trigger price is the net amount after subtracting discounts from couponing, double couponing and other price related promotions.

8. Purchase and No Purchase. When the trigger price or a lower price is offered, a purchase occurs. The household must then make a stocking decision. For example, "Do I buy 5 cans or 25 cans of cat food?" The stocking decision will depend on such as the experience and knowledge of the household, its economic resources, and storage space. If the household does not find a price at or below the trigger price, the purchase may be delayed. The search continues.

9. Post-Purchase. An evaluation of the purchase choice for products and brands is integral to establishing future effective minimum acceptable quality standards. Testing and evaluating unfamiliar brands offered at or below the trigger price should be a key part of a household’s model, particularly for frequently purchased items.


The model is based on the intensively competitive marketplace where different types of retailers are selling similar goods, a wider assortment of product variants, and a myriad of promotional techniques have increased opportunities to boost consumer purchasing power. It is further based on changes in society, where daily travel time has increased, leisure time has decreased and shopping activity is shared by household members.

Households Needs are integrated into their Travel Systems. A set of Acceptable Stores within the trading area is developed from previous experience. lso, through monitoring the retail environment and past experience with product variants, the household develops a set of Acceptable Brands and is familiar with pricing for these brands at a range of stores. A Price Trigger may cue a purchase. If a price trigger is absent, then the purchase does not take place or is delayed. Through On-Going Search the knowledge base of the household expands; price familiarity increases and new product variants as well price fluctuations are noticed. By monitoring the set of stores over a period of time, household members are able to take advantage of retail price variation at one point in time and over time.

Full implementation of the model calls for all members of the household having daily travel patterns to participate. All would be active information seekers, routinely scanning newspaper advertisements and other sources of price/product information for both frequently purchased consumable goods and durables and semi-durables. Members would routinely scan the retail outlets selling goods included in the household’s needs. Increased benefits will be obtained if a large number of alternative brand choices is acceptable.

The household can evolve the model to the level of complexity it desires, expanding or contracting particular shopping related activities over time. All sorts of abridgments are possible. The model might initially be limited to a small number of frequently purchased products. Conversely, all household members may participate by scanning different sets of stores. A model might be developed for the traveler who routinely passes the largest number of acceptable stores, or the traveler who enjoys shopping for value. Or one household member might only shop for those items used as loss leaders in a set of acceptable stores.

Alternatively, the system may be informal in that consumers may benefit simply from using insights obtained from understanding that (1) shopping can be approached as a system that includes taking advantage of retail price over time; (2) price and promotional strategies differ among individual retailers as well as retail store formats, and (3) retailer behavior provides opportunities to increase efficiency in buymanship.

Limitations of the Model

The model was developed for the United States market, particularly metropolitan areas characterized by many and varied retail formats. The model presupposes variation in retail prices within a consumer’s trading area over time and at one point in time. Its complete implementation is predicated upon household members’ travel patterns and modes of transportation. The extent to which these conditions exist in other parts of the world will determined the model’s applicability to other countries.

The model’s applicability is further limited by the attitudes, and perspectives of the individual households. If household members do not like shopping or do not like a particular kind of shopping, they must weigh the costs of the shopping model including the analysis of the utilities to be derived from the relevant alternative activities foregone against the economic benefits of using the shopping model or elements of the model. To the extent that costs outweigh benefits, considering all factors, the activity should not be undertaken. The same kind of analysis is appropriate for travel. If a particular opportunity for purchase is available outside the travel system, the extra net costs (including a consideration for the benefits of travel, if any) of the travel must be weighed against the presumed benefits of the purchase.


The proposed shopping model is designed to enable individuals and households to increase consumer surplus by utilizing marketplace mechanisms and competitive environments to their advantage. It is posed from a positive and offensive perspective on the market. A key distinction is that time is treated so the consumer will take advantage of both price variations among retailers at one point in time and within one retailer and the system over time. While the differences in the treatment of time in the context of the shopping system may not appear major, impacts on the decision rules and behavior of consumers adopting such systems would be large.

Goals of the pre-purchase process become twofold. The first is to establish minimum acceptable levels of quality or performance. The consumer eliminates brands or products which are not satisfactory either in terms of meeting functional and/or psychological needs. The more alternatives that are acceptable and will satisfy the consumer, the better. Thus, rather than employing a compensatory rule, the system calls for the simpler, non-compensatoryBconjunctive rule. The second goal is to establish specific trigger rules for a particular purchase. The more alternatives that satisfy the consumer in the context of the focus of market offerings in the set of retailers, the better.

Search is changed in that the search process does not necessarily culminate in a purchase decision. Present decision making recommendations imply that a choice should be made from among alternatives A, B, and C after an appropriate search. In the context of the model, the purchase trigger should be, value, suggested by a designated low price. In this sense purchases will be made without substantial immediate search preceding them. In this way, contingency buying is facilitated. For example, a household could make a decision to buy either product "A" if the price trigger is present or product "B" if its price trigger is present. The first product price trigger to present itself will activate the purchase. Additionally, search becomes a continuous activity in that consumers are integrating search into day-to-day activities.


The proposed shopping system describes a process by which consumers can increase purchasing power by taking advantage of marketplace dynamics. Empirical research is needed to validate the model, its component structure, and its assumptions. Additionally, research is needed to understand thresholds of consumer choice under the conditions of the model. Research should also be directed to the marketplace, focusing on the behavior of retailers, particularly with respect to pricing strategies and policies.

Validating the System

The decreased variability in quality of many categories of consumer products is a key organizing thrust of the system. Prior research on price dispersion along with costs and returns to search has been grounded on assumptions of quality differences. It has focused on identifying the best quality for the lowest price (c.f. Cude 1987). We posit that multiple alternatives meet the minimum quality standards for households across many product categories. This changes the parameters of search and decision making suggesting differences in the costs and returns to search. Research should compare the cost benefit of following the proposed shopping model to traditional models in which the consumer seeks to purchase the most quality for the lowest price.

Cost benefit analyses of the full shopping model and abridgments of the model should consider such issues as differences in the payoff per unit of time from different forms of search and information acquisition. How much vigilance is required to obtain satisfactory returns? For example, does routine scanning of retail outlets provide a better return than couponing or reading all newspaper advertisements? What is the time investment required to obtain the desired benefits of the model?

Components of the System

The household’s set of needs, travel patterns, and set of acceptable stores form the basis for implementing the model. Little is known about the relationship between travel patterns and search behavior in many households. While most would accept the notion that people often combine errands with travel to and from work, we do not know the extent to which household needs and acceptable stores are linked to travel systems. For example, we do not know whether household members are more likely to incorporate some types of needs and stores into travel patterns than others. Are they likely to incorporate stores selling shopping goods and needs for semi-durables and durables into travel patterns? Relatedly, how much are household members willing to vary their patterns before considering travel to be a cost?

According to the model, ongoing search leads to brand and price familiarity. Price familiarity is requisite to trigger a purchase. Some studies have reported that many consumers are not familiar with prices or are unable to recall prices (Dickson and Sawyer 1990), yet others suggest that such information is passively acquired (Mazis 1988). We do not know how much price familiarity is necessary to establish triggers for different product categories. Additionally, we do not know whether triggers are likely to be formally or informally established, or how this would differ according to exogenous factors such as the interstore competition, and size of the community.

Assumptions of the Model

Empirical research on issues associated with the assumptions of the model will be useful for application of he model to consumer education. Successful implementation of the model rests on assumptions that the household is able to anticipate needs over a designated period of time and to set minimum acceptable product quality standards. Anecdotal accounts have suggested that many consumers are shopping for value, and stockpiling (c.f. Power, et al. 1991; Rice 1992). Research is needed to obtain information on the manner and extent to which households anticipate needs for different product categories, and to what extent households are willing to commit financial and spatial resources to stockpiling goods.

Recent surveys (c.f. Giges 1988; Landler 1991) have found that consumers perceive more products as commodities distinguished only by price. This suggests that for many product categories, consumers have expanded their choice sets, but little is known about how the perception converts to buying behavior, or whether the perception transcends multiple product categories. Further, given the perception of product parity, is price the only choice criteria as posited by the model?

A further assumption of the model is that household members derive utility from the shopping experiences. Studies have found that some consumers do indeed derive satisfaction from shopping carefully (c.f. Hafstrom, Chae and Chung 1992; Rice 1992; Smith 1989). However, we do not know whether those who enjoy shopping are more likely to be disciplined and likely to consider shopping within a travel system as the model suggests. Research on shopping enjoyment should investigate linkages to various types of shopping such as browsing to components of the model.

Retailer Behavior

The model is positioned from the consumer’s perspective. It is designed to take advantage of retail price variability; it rests on understanding and knowledge of marketplace behavior and retailer strategy. The policies and strategies of different types of retailers should be investigated. Random and systematic price fluctuations, and price related promotions should be examined as these are likely to differ according to the competitive mix, size of the community, and geography. It is imperative that efficient consumers be familiar with the pricing strategies of retailers in their trading areas, in order to maximize purchasing power. While not every locality is likely to be 'overstored,’ and competition may not be as intense, where ever retailers are competing, the savvy consumer has an opportunity to benefit.


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Mary L. Carsky, University of Hartford, U.S.A.
Roger A. Dickinson, University of Texas at Arlington, U.S.A.


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