Online and offline retailing: What we know and directions for future research

Abstract

The fast-paced growth of e-commerce is rapidly changing consumers’ shopping habits and shaping the future of the retail industry. While online retailing has allowed companies to overcome geographic barriers to selling and helped them achieve operational efficiencies, offline retailers have struggled to compete with online retailers, and many retailers have chosen to operate both online and offline. This paper presents a review of the literature on the interaction between e-commerce and offline retailing, highlighting empirical findings and generalizable insights, and discussing their managerial implications. Our review includes studies published in more than 50 different academic journals spanning various disciplines from the inception of the internet to present. We organize our paper around three main research questions. First, what is the relationship between online and offline retail channels including competition and complementarity between online and offline sellers as well as online and offline channels of an omnichannel retailer? Under this question we also try to understand the impact of e-commerce on market structure and what factors impact the intensity of competition /complementarity. Second, what is the impact of e-commerce on consumer behavior? We specifically investigate how e-commerce has impacted consumer search, its implications for price dispersion, and user generated content. Third, how has e-commerce impacted retailers’ key managerial decisions? The key research questions under this heading include: (i) What is the impact of big data on retailing? (ii) What is the impact of digitization on retailer outcomes? (iii) What is the impact of e-commerce on sales concentration? (iv) What is the impact of e-commerce and platforms on pricing? And (v) How should retailers manage product returns across online and offline channels? Under each section, we also develop detailed recommendations for future research which we hope will inspire continued interest in this domain.