Linking Clicks to Bricks: Understanding the Effects of Email Advertising on Multichannel Sales

Abstract

Businesses have widely used email ads to directly send promotional information to consumers. Whereas email ads serve as a convenient tool that allows firms to target consumers online, there is little evidence of their multichannel impact on consumer spending in both online and brick-and-mortar stores. In this paper, we utilize a unique high-dimensional data set from one of the world’s largest office supplies retailers to link each consumer’s online behaviors to item-level purchase records in physical stores. We employ a doubly robust estimator that incorporates nonparametric machine learning methods for causal estimation of observational data. Our results show that email ads significantly increase the retailer’s sales across different channels. We also investigate the effects of email ads on diverse consumer behaviors along the purchase funnel and find that increased sales result from increased purchase probability and a wider variety of products purchased by consumers. Further, we examine several moderating factors, such as product types and consumer segments, that influence the multichannel effects of email advertising. Our study provides empirical evidence for the economic impact of email ads on consumer behavior across different channels and the underlying mechanisms thereof, offering direct implications for multichannel retailers seeking to improve their digital marketing strategies.