Understanding Competition Using Big Consumer Search Data

Understanding competition is essential for every firm. Unfortunately, information on who competes with whom is scarce. Traditional research approaches such as surveys and panels are time consuming, expensive, and usually not well applicable to markets with large numbers of consumer durables. Consumer search data from a price comparison site, however, allows for observing consumers search and compare products, revealing which products they consider to be "competing" alternatives. We propose and critically compare three methods that use these data to identify, analyze and visualize competitive relationships between products. Finally, our empirical study of 147,336 consumers searching in the consumer electronics product category provides insight into consideration set size and composition, and shows that the average consideration set size of a consumer is 4.38 and the average consideration set of a product is 7.49.