From clicks to bricks: The impact of product launches in offline stores for digital retailers

Abstract

More digital retailers are expanding into offline channels by launching products in partners' stores, despite the mature offline shopping. Despite this extensive phenomenon, little attention is focused on the impact of offline product launches on sales. This paper examines how offline product launches via third-party offline stores affects online and mobile purchases, and extends understanding by investigating the moderating effect of offline store intensity. We analyze data obtained from a digital-first beauty retailer through a difference-in-differences analysis using a bivariate negative binomial distribution model. Empirical results show offline product launches are synergistic with online and mobile purchases, especially with respect to the latter. In addition, offline store intensity weakens the positive effect of offline product launches on online purchases, whereas it does not moderate the effect on mobile purchases. Moreover, we provide insights into developing geo-targeting launch strategies through what-if analyses. Our findings provide critical managerial implications for digital retailing.