Abstract
The authors investigate customer response to the addition of a mobile shopping channel to existing online and offline channels. They investigate the cannibalization by the new mobile channel of existing channels and evaluate changes in households’ purchasing behavior following adoption of the mobile channel. They find that introducing the mobile channel cannibalizes the online channel, but the impact on the offline channel is small. As households adopt the mobile channel, they increase weekly expenditure by 16.5%, primarily due to higher shopping frequency rather than larger basket size per trip. They also find considerable heterogeneity in the impact of mobile adoption. Online-only shoppers, hybrid-online, and hybrid-offline shoppers showed modest increases in their expenditure and little or no change in their channel-usage patterns. However, offline-only shoppers became multi-channel users, and they increased their weekly expenditure by 43.1%. They also find a stronger effect of the adoption for households who used the chain less often. Furthermore, they demonstrate mobile apps can be a competitive tool to increase market share.
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