Channel strategies, product types, and performance in the US retail industry

Abstract

Internet becomes an alternative channel for retailers to distribute products and services, and at least three channel strategies turn up after internet technology emerged. This paper investigates the differences across channel strategies within US retail industry and to explore why the differences occur, and intends to contribute to marketing and retailing literatures. This paper analyses the differences of advertising investment and inventory turnover across channel strategies and product types for eight categories of industry segments. Besides, the impacts of channel strategies and product types on firm performance are also proposed. Employing panel data of 272 firms between 1995 and 2006 in US retail industry, the results show that there are significant differences in advertising investment and inventory turnover across channel strategies and product types. In addition, click-and-mortar firms obtain better performance than the other two channel strategies, and experience goods are negatively associated with firm performance when firms adopt e-tailing strategy.