Cross-channel Effects Research Articles

Cross-Channel Effects of Price Promotions: An Empirical Analysis of the Multi-Channel Grocery Retail Sector

An important consideration for multi-channel grocery retailers is which promotion strategy to adopt across channels. The tendency of grocery buyers to keep visiting the offline store after they start to buy at the chain's online store implies that promotions in one channel can have substantial negative effects on buying behavior in the other channel, especially if the promotions differ across channels. This article examines the cross-channel effects of price promotions on category purchase decisions, taking into account both contemporaneous effects (during the promotion period) and cross-period effects (after the promotion period). For cross-period promotion effects, a distinction is made between lagged promotion effects on subsequent category purchases, and promotion frequency effects on future promotion effectiveness. The results show that (1) promotions in one channel can have negative effects on category purchases in the other channel during the promotion period, (2) these cross-channel effects are asymmetric, (3) high promotion frequency can have negative effects on future promotion effectiveness in the other channel, and (4) cross-channel effects are more negative for more loyal customers of the chain.

Showrooming vs. Competing: The Role of Product Assortment and Price

We empirically examine consumer showrooming phenomenon in the footwear industry. Using transaction-level data from a large online footwear retailer and offline store entry data from four major footwear retail chains in the U.S., we quantify the effect of offline store entry on the competing online retailer. We provide evidence for the presence of both showrooming and competing effects, and find that the net effect depends on the type of new offline stores: (1) single-brand stores (e.g., Clarks) that solely carry the manufacturer brand and (2) multi-brand stores (e.g., Shoe Carnival) that feature a wide selection of brands and styles. The results show that the showrooming effect is dominant, leading to increased online purchases, when a single-brand store opens; meanwhile, the competing effect is dominant, resulting in decreased online purchases, when a multi-brand store opens. While both types of offline store entry can stimulate demand, multi-brand stores are more likely to meet consumer demand with wider selection and more competitive pricing, compared to single-brand stores. For single-brand store entry, we observe not only a within-brand showrooming effect, where online purchases for the brand of the respective offline store increase, but also a cross-brand showrooming effect, where online purchases of other brands also increase. We further analyze the effect of offline store entry on average price of items purchased online and examine the moderating effects of location characteristics. Our work contributes to the literature on online and offline markets by quantifying the cross-channel effects across retailers and explaining the underlying mechanisms.

An empirical study of the cross-channel effects between web and mobile shopping channels

With the increasing popularity of mobile applications, increasingly more e-commerce websites are providing mobile shopping services that enable their consumers to access their products and services through an additional mobile channel. The question arises here as to whether the new channel brings new sales or merely shifts consumers from the web to the mobile channel. Using the 2½-year transaction data obtained from an e-commerce company that expanded its web service onto a mobile platform, we investigated the impact of the newly introduced mobile channel on the sales of the incumbent web channel, and whether it could stimulate new consumption from consumers. Our empirical results indicate that after the adoption of the mobile channel, the purchases on the web channel were slightly cannibalized; however, the consumers’ purchases increased overall, suggesting that the positive synergy effect of the new channel overrode the negative cannibalization effect. Our investigation contributes to multichannel e-commerce literature by empirically testing the cross-channel effects of a new mobile channel and also providing insights for e-retailers interested in introducing a new mobile channel.

Building With Bricks and Mortar: The Revenue Impact of Opening Physical Stores in a Multichannel Environment

A crucial decision firms face today is which channels they should make available to customers for transactions. We assess the revenue impact of adding bricks-and-mortar stores to a firm's already existing repertoire of catalog and Internet channels. We decompose the revenue impact into customer acquisition, frequency of orders, returns, and exchanges, and size of orders, returns, and exchanges. We use a multivariate baseline method to assess the impact of adding the physical store channel on these revenue components. As hypothesized, store introduction cannibalizes catalog sales and has much less impact on Internet sales. Also as hypothesized, returns and exchanges increase. Interestingly, transaction sizes of purchases, returns, and exchanges do not change. The “availability effect” produces a net increase in purchase frequency across channels. This more than compensates for increased returns, producing a net increase in revenues of 20% by adding the store channel. Our findings yield a deeper understanding of the revenue relation between channels, and of the dynamic cross-channel effects of marketing actions.

Substitution or Promotion? The Impact of Price Discounts on Cross-Channel Sales of Digital Movies

Technology is transforming the marketing function in many ways, and this transformation is particularly apparent for information goods such as movies where digital technologies provide marketers with new distribution channels, which in turn create new opportunities for cross-channel effects. However, these digital channels also provide researchers with new opportunities to measure micro-level customer behavior to understand the impact of cross-channel effects in real-world settings.In this paper, we study cross-channel effects between movies sold in digital purchase (commonly known as Electronic Sell Through or EST) and digital rental (commonly known as Video-On-Demand or VOD) markets. We do this using a unique sales dataset from a major digital movie retailer provided by a major movie studio. Our analysis takes advantage of a 14-week field experiment that allows us to measure the impact of price discounts on own- and cross-channel sales. We use this experiment to estimate own and cross price elasticities, whether price discounts cannibalize future sales, and most importantly whether price discounts in one channel affect sales for the same product in a presumably competing channel.Our analysis indicates that digital movie consumers are highly sensitive to price promotions. However, we also find that, contrary to expectations, price promotions in a digital sales channel for a movie do not seem to cannibalize digital rentals. Indeed, our results suggest that, if anything, price promotions for digital movie sales can increase digital rentals. We explore a variety of explanations for this counterintuitive result, including the possibility that the ease of information transmission online through third-party websites, blogs, and online discussion areas may create information spillovers such that price discounts in one channel may increase product awareness in other competing sales channels. From a managerial perspective, our results suggest that cross-channel cannibalization can be reduced or even reversed in the presence of information spillovers, and that there are many new opportunities for marketers to directly measure these cross-channel effects using experimental data from online platforms.

An Empirical Study of the Cross-Channel Effects between Web and Mobile Shopping Channels

With the increasing popularity of mobile applications, more and more e-commerce websites are providing mobile shopping services that enable their consumers to access their products and services through an additional mobile channel. Does the new channel bring new sales or just shift consumers from the web channel to the mobile channel? Using two-and-half years of transaction data from an e-commerce company that expanded its web service onto a mobile platform, we investigated how the newly introduced mobile channel impacted sales of the incumbent web channel, and whether it could stimulate new consumption from consumers. Our empirical results indicate that after the adoption of the mobile channel, the purchases on the web channel were slightly cannibalized, however, the consumers’ purchases increased overall, suggesting that the positive synergy effect of the new channel overrode the negative cannibalization effect. Our investigation contributes to multi-channel e-commerce literature by empirically testing the cross-channel effects of a new mobile channel, and also providing insights for e-retailers interested in introducing a new mobile channel.

Cross Channel Effects of Search Engine Advertising on Brick & Mortar Retail Sales: Meta Analysis of Large Scale Field Experiments on Google.com

Abstract We investigate the cross channel effects of search engine advertising on Google.com on sales in brick and mortar retail stores. Obtaining causal and actionable estimates in this context is challenging: Brick and mortar store sales vary widely on a weekly basis; offline media dominate the marketing budget; search advertising and demand are contemporaneously correlated; and estimates have to be credible to overcome agency issues between the online and offline marketing groups. We report on a meta-analysis of a population of 15 independent field experiments, in which 13 well-known U.S. multi-channel retailers spent over $4 Million in incremental search advertising. In test markets category keywords were maintained in positions 1-3 for 76 product categories with no search advertising on these keywords in the control markets. Outcomes measured include sales in the advertised categories, total store sales and Return on Ad Spending. We estimate the average effect of each outcome for this population of experiments using a Hierarchical Bayesian (HB) model. The estimates from the HB model provides causal evidence that increasing search engine advertising on broad keywords on Google.com had a positive effect on sales in brick and mortar stores for the advertised categories for this population of retailers. There also was a positive effect on total store sales. Hence the increase in sales in the advertised categories was incremental to the retailer net of any sales borrowed from non-advertised categories. The total store sales increase was a meaningful improvement compared to the baseline sales growth rates. The average Return on Ad Spend (ROAS) is positive, does not breakeven on average although several retailers achieved or exceeded break-even based only on brick and mortar sales. We examine the robustness of our findings to alternative assumptions about the data specific to this set of experiments. Our estimates suggest online and offline are linked markets, that media planners should account for the offline effects in the planning and execution of search advertising campaigns, and that these effects should be adjusted by category and retailer. Extensive replication and a unique research protocol ensure that our results are general and credible.

Should retailers harmonize marketing variables across their distribution channels? An investigation of cross-channel effects in multi-channel retailing

Retailers with more than one channel of distribution have to decide whether marketing variables such as conveyed image, price, and assortment should be harmonized across channels. This article presents an integrative model and survey results that shed light on this question; its focus is on stores, online shops, and catalogs. The results show that harmonization of marketing variables has advantages and disadvantages: on the one hand, it correlates positively with overall customer loyalty and cross-channel customer retention, i.e., one channel causes more sales in other channels. On the other hand, it also correlates positively with cannibalization within the distribution system. This suggests that general recommendations strictly favoring or disfavoring harmonization do not account sufficiently for the complexity of the problem and retailer heterogeneity.

Quantifying the Dynamic Sales Impact of Location-Based Mobile Promotion Technologies

Location-based mobile promotion (LMP) is believed to trigger spontaneous and impulsive purchases. This field study quantifies the dynamic impact of LMP, using aggregated daily mobile movie promotions and purchase data from over 3 million realworld users of a large mobile service provider. The developed multivariate time-series models confirm that LMP has a significant contemporaneous impact on movie ticket sales. Bayesian vector autoregressive results also confirm that LMP has significant immediate (next day) and cumulative impacts on sales over the next 9 days. The immediate and cumulative impacts account for 66% of the total effects. These findings suggest that without considering the dynamic effects, practitioners and researchers may substantially under-estimate the value of LMP. Our analysis also reveals the presence of cross-channel effects between LMP and other forms of mobile related promotions.

Adding Bricks to Clicks: On the Role of Physical Stores in a World of Online Shopping

Abstract E-commerce is gaining ground and leaving the role of traditional brick-and-mortar stores open to question. With this in mind, a team of researchers performed a case study to determine what effects the store openings of one multichannel retailer of fashion, home furnishings and high-end accessories would have on its catalog and online sales. The opening of brick-and-mortar stores had positive and negative effects for the retailer, but complementary consequences clearly outweighed sales drops in individual channels: In the short term, only catalog sales declined slightly. But over time, both the catalog and online channels increasingly benefited from the presence of the new brick-and-mortar stores. Within 79 months, catalog sales recovered to a level that would have been expected had the store never opened and subsequently continued growing more than in a sample without new stores. An enhanced understanding of both positive and negative cross-channel effects helps retailers better anticipate and respond to changes in sales in existing channels when a new one is added. It is the basis for strategically managing a company’s channels as a portfolio rather than as separate entities.

Driving Online and Offline Sales: The Cross-Channel Effects of Traditional, Online Display, and Paid Search Advertising

The current marketing environment is characterized by a surge in multichannel shopping and increasing choice of advertising channels. This situation requires firms to understand how advertising in one channel (e.g., online) influences sales in another channel (e.g., offline). This article studies the presence, magnitude, and carryover of these cross-channel effects for online advertising (display and search) and traditional media. The analysis considers how these advertising expenditures translate directly into sales, as well as indirectly through intermediate search advertising metrics—namely, impressions and click-through rate. For a high-end clothing and apparel retailer, the authors find that cross effects exist and are important and that cross-effect elasticities are almost as high as own-effect elasticities. Online display and, in particular, search advertising is more effective than traditional advertising. This result is primarily due to strong cross effects on the offline channel. Return-on-investment calculations suggest that by ignoring these cross effects, firms substantially miscalculate the effectiveness of online advertising. Notably, the authors find that traditional advertising decreases paid search click-through rates, thus reducing the net cross effect of traditional advertising.

Driving Online and Offline Sales: The Cross-Channel Effects of Traditional, Online Display, and Paid Search Advertising

Driving Online and Offline Sales: The Cross-Channel Effects of Traditional, Online Display, and Paid Search Advertising

On the nonlinear threshold versus distance in long-haul highly-dispersive coherent systems

We show that the accumulation rate of nonlinearity in highly-dispersive long-haul coherent links can also be measured from the nonlinear threshold decrease rate, and provide simulations of such rates for both single- and cross-channel effects. We then show how the estimated rate can be used for the overall system design.

Driving Online and Offline Sales: The Cross-Channel Effects of Digital Versus Traditional Advertising

Today's marketing environment is characterized by a surge in multichannel shopping and ever more choice in advertising channels. This requires firms to understand how both digital and traditional advertising drive sales within the same channel (e.g., digital advertising affecting online sales) and across channels (e.g., digital advertising affecting offline sales). We develop a Dynamic Linear Model (DLM) to measure these effects. The model addresses: (1) the endogeneity of advertising, (2) dynamic advertising effects, (3) a multivariate dependent variable (4) heterogeneity across markets, and (5) competitive advertising effects. It decomposes advertising’s impact into customer counts and spend. We calibrate the model using data from a large, upscale retailer. We estimate elasticities for traditional (offline), online display (banner) and online search advertising on online and offline sales. Further, we develop and test hypotheses on how advertising impacts own- and cross-channel sales. We find that cross-channel effects exist and are important. For example, much of the impact of digital advertising can be attributed to its effect on the offline channel, primarily because of the impact on customer count.

Practice Prize Paper—Marketing's Profit Impact: Quantifying Online and Off-line Funnel Progression

Inofec, a small- to medium-sized enterprise in the business-to-business sector, desired a more analytic approach to allocate marketing resources across communication activities and channels. We developed a conceptual framework and econometric model to empirically investigate (1) the marketing communication effects on off-line and online purchase funnel metrics and (2) the magnitude and timing of the profit impact of firm-initiated and customer-initiated contacts. We find evidence of many cross-channel effects, in particular, off-line marketing effects on online funnel metrics and online funnel metrics on off-line purchases. Moreover, marketing communication activities directly affect both early and later purchase funnel stages (website visits, online and off-line information, and quote requests). Finally, we find that online customer-initiated contacts have substantially higher profit impact than off-line firm-initiated contacts. Shifting marketing budgets toward these activities in a field experiment yielded net profit increases 14 times larger than those for the status quo allocation.

Research on Intersession Variability Compensation for MLLR-SVM Speaker Recognition

One of the most important challenges in speaker recognition is intersession variability (ISV), primarily cross-channel effects. Recent NIST speaker recognition evaluations (SRE) include a multilingual scenario with training conversations involving multilingual speakers collected in a number of other languages, leading to further performance decline. One important reason for this is that more and more researchers are using phonetic clustering to introduce high level information to improve speaker recognition. But such language dependent methods do not work well in multilingual conditions. In this paper, we study both language and channel mismatch using a support vector machine (SVM) speaker recognition system. Maximum likelihood linear regression (MLLR) transforms adapting a universal background model (UBM) are adopted as features. We first introduce a novel language independent statistical binary-decision tree to reduce multi-language effects, and compare this data-driven approach with a traditional knowledge based one. We also construct a framework for channel compensation using feature-domain latent factor analysis (LFA) and MLLR supervector kernel-based nuisance attribute projection (NAP) in the model-domain. Results on the NIST SRE 2006 1conv4w-1conv4w/mic corpus show significant improvement. We also compare our compensated MLLR-SVM system with state-of-the-art cepstral Gaussian mixture and SVM systems, and combine them for a further improvement.

Brand and Price Advertising in Online Markets

We model a homogeneous product environment where identical e-retailers endogenously engage in both brand advertising (to create loyal customers)and price advertising (to attract shoppers). Our analysis allows for cross-channel effects; indeed, we show that price advertising is a substitute for brand advertising. In contrast to models where loyalty is exogenous, these cross-channel effects lead to a continuum of symmetric equilibria; however, the set of equilibria converges to a unique equilibrium as the number of potential e-retailers grows arbitrarily large. Price dispersion is a key feature of all of these equilibria, including the limit equilibrium. While each firm finds it optimal to advertise its brand in an attempt to grow its base of loyal customers, in equilibrium, branding (1) reduces firm profits, (2) increases prices paid by loyals and shoppers, and (3) adversely affects gatekeepers operating price comparison sites. Branding also tightens the range of prices and reduces the value of the price information provided by a comparison site. Using data from a price comparison site, we test several predictions of the model.

On the detection and perception of modulation by human listeners.

In a series of papers, beginning in 1952, Eberhard Zwicker and his colleagues redefined the psychoacoustics of modulation detection and perception. The scope of this subject now encompasses questions of considerable generality: whether the detection of modulation is effectively a measure of difference limens, or whether the temporal variation present in the modulation introduces specific elements of neural processing; whether frequency modulation detection and amplitude modulation detection can both be understood from a single excitation-pattern model, and, whether auditory temporal processing of all kinds can be understood in terms of superposition of responses to modulated tones. Presently, there appears to be a totally satisfactory understanding of modulation detection at high modulation rates in terms of a spectral model and tone-on-tone masking. However, attempts to find a unified model for low modulation rates, where temporal processing is indicated, must cope with some difficult experimental results, including data that show awkward dependences of modulation detection and difference limens on signal parameters, evidence of selective adaptation, and recently discovered cross-channel effects. [Work supported by the NIDCD, DC00181.]

Cross-channel effects of vocal and physical attractiveness and their implications for interpersonal perception.

Judges' ratings of senders' vocal attractiveness from face-plus-voice (F+V) cues were influenced by senders' physical attractiveness, and ratings of senders' physical attractiveness from F+V cues were influenced by senders' vocal attractiveness. This occurred even when judges were warned not to pay attention to face when rating vocal attractiveness and not to pay attention to voice when rating physical attractiveness. Instructions to judge attractiveness without being told which channel to attend to resulted in ratings influenced by both vocal and physical attractiveness of senders. Because of cross-channel effects, F+V attractiveness ratings should be more highly related to F+V personality impressions than attractiveness ratings based on only face or only voice. The results supported this hypothesis. Implications of cross-channel effects for research on the attractiveness stereotype were discussed.

Cross-channel effects of vocal and physical attractiveness and their implications for interpersonal perception.

Judges' ratings of senders' vocal attractiveness from face-plus-voice (F+V) cues were influenced by senders' physical attractiveness, and ratings of senders' physical attractiveness from F+V cues were influenced by senders' vocal attractiveness. This occurred even when judges were warned not to pay attention to face when rating vocal attractiveness and not to pay attention to voice when rating physical attractiveness. Instructions to judge attractiveness without being told which channel to attend to resulted in ratings influenced by both vocal and physical attractiveness of senders. Because of cross-channel effects, F+V attractiveness ratings should be more highly related to F+V personality impressions than attractiveness ratings based on only face or only voice. The results supported this hypothesis. Implications of cross-channel effects for research on the attractiveness stereotype were discussed.