Window-Shopping
This unpublished paper considers the free riding problem by customers who go to a store and try the product’s fit and or consult with staff but then buy it from the cheapest online store.
A couple of notes on the paper titled Window-Shopping” format: html from https://dx.doi.org/10.2139/ssrn.2374720 by Shy Oz
Two significant differences in buying in a store vs online are
that in a store you usually leave with the product.
there are no delivery costs.
Poor online reviews in most stores are often censored by the seller and this may or may not be known to the buyer.
In many cases the online sellers are sufficiently cheaper than the store that the buyer is willing to take the risk of buying online -
Additionally these buyers may accrue social capital by passing on the unsuitable product to family or friends.
Online sellers are also different in that they can save in costs in certain ways not available to the store. For example, they save on rent by operating from locations with minimal real estate, have lower staffing costs, and may not even have inventory costs if they are drop shippers. They may cut out middle men and have a direct relationship with the manufacturer.
The paper considers a single sale but when buyers may often buy multiple items which translates to greater advantages in either scenario.
Retailers (like Zara) may also only unique lines of items so that the buyer cannot get the same item elsewhere. Buy limiting the time these lines are available they can also create a sense of urgency in the buyer.
One more point regarding the dynamic model.
In the store the unsuitability of a product is immediately apparent and the buyer can find a better product. In the online scenario the buyer may not know the unsuitability of the product until it arrives.