Price sensitivity and online shopping behavior during the COVID-19 pandemic

Abstract

Purpose The COVID-19 pandemic has disrupted numerous businesses and upended the lives and shopping habits of most consumers. This study aims to examine the price sensitivity and the efficacy of online reviews during a pandemic crisis. Design/methodology/approach This study borrowed from the regulatory focus theory and heuristic-systematic model and used a unique longitudinal sample of 320,000 product/day observations from the jeans category, collected before and during the pandemic, to investigate how consumers’ online shopping behavior changed during the pandemic. Findings The results of several hierarchical linear modeling analyses revealed that during the pandemic consumers were less price-sensitive and more willing to pay price premiums for jeans. Furthermore, consumers were more (less) likely to be influenced by online review volume than valence. Finally, the results of a post-hoc study highlighted the potential role of regulatory focus as the underlying psychological mechanism explaining the effect of the pandemic. Originality/value This research contributes to the digital marketing and regulatory-focus literatures by showing that the COVID-19 pandemic may have triggered a prevention-focus state of mind and prompted consumers to place a greater value on online review volume than valence when shopping online (for jeans). Furthermore, this paper contributes to the pricing literature by offering further evidence that the pandemic may have inclined consumers to be less price-sensitive.