How Does Omnichannel Marketing Enable Businesses to Cope with COVID-19? Evidence from a Large-Scale Field Experiment

Abstract

In light of the global Covid-19 pandemic and its profoundly negative impact on offline businesses, this study aims to understand how firms can leverage online-to-offline (O2O) coupons to maintain and even grow their offline businesses despite constraints imposed by the pandemic. We use unique data from a large-scale field experiment with 850,000 distributed coupons across about 280 cities, as well as two online follow-up studies. We evaluate how the local severity of the pandemic impacts the effectiveness of O2O coupons and explore the underlying mechanisms of the pandemic's effects on consumer coupon usage decisions. The results show that the coupon claim rate is positively influenced by pandemic severity, and this effect is driven by consumers' perceived deprivation. Conversely, pandemic severity has a negative impact on the coupon redemption rate, and this effect is mediated by consumers' perceived risk. More importantly, for areas in which the pandemic is more severe, both the coupon claim and redemption rates are significantly higher when the coupon is distributed through social sharing (vs. directly from the business), and the coupon claim rate is higher when the claiming procedure involves gamification than when it does not. The paper concludes with theoretical and managerial implications.