Abstract
Abstract With the rapid development of e-Commerce and takeaway platforms, retailers have gradually developed multi-channel operations. However, limited empirical studies explored the effects of an online channel offered by takeaway platforms on the store performance. Does an online channel addition have a synergy effect or a cannibalization effect on store performance? We empirically investigate these effects by analyzing a large dataset including diverse samples collected from multiple retailers across various regions. The dataset includes 2115 stores across 25 retailers for 10 months that includes two types of retail formats and covers 16 provinces and 21 cities of China. We study the impacts of the newly introduced online channel on the incumbent offline channel and the overall store performance. The empirical results reveal that the online channel addition mainly has a synergy effect. Specifically, for the overall store, it has a positive effect on the sales and product variety, whereas it has a negative effect on the basket size. Surprisingly, an online channel addition also has a positive effect on the offline sales. Our study adds novel values to multi-channel retailing literature by empirically researching the cannibalization and synergy effect of a new type of online channel, offered by takeaway platforms. It can provide insights for retail enterprises who are interested in introducing O2O model.
Highlights
With the rapid growth of multi-channel retailing over the last few years, many retailers have extended their business from brick-and-mortar stores to the Internet, eretailers set up offline physical shops
With the aim of fast door-to-door delivery, an online channel offered by takeaway platforms and the offline channel share the same stock of the store
21 retailers are chain convenience stores and 4 are chain specialty stores. Some of these enterprises have introduced an online channel offered by takeaway platforms as a supplement of their offline channels
Summary
With the rapid growth of multi-channel retailing over the last few years, many retailers have extended their business from brick-and-mortar stores to the Internet, eretailers set up offline physical shops. To investigate the relationship between the introduction of online channel and the store performance, it is necessary to control for store heterogeneity and the possibility of self-selection Data regarding these features are generally difficult to obtain. Our study aims to fill the existing void with respect to research on the impact of online channels offered by takeaway platforms on store performance. Our study results suggest that retailers should consider both offline and online channel when they develop store performance. They need to plan or adjust category strategies of every single store based on consumers’ behaviors, and put forward higher requirements for store managers to increase consumer unit price.
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