Multichannel Retailing Research Articles

Impact of Facilitating Store Usage on Customerss Online Purchase Behavior

How does reducing customers’ store access costs affect the quantity and nature of their online purchase? We answer this question by designing a quasi-natural experiment around the event of store opening by a large US fashion apparel and accessories multichannel retailer. While the distance from nearest store (store access costs) was significantly reduced for customers living in the vicinity of the opened store (affected customers), it remained unaffected for other customers (unaffected customers). We utilize both propensity score based inexact matching and coarsened exact matching methods to create matched samples of affected and unaffected customers based on their past purchase/return behaviors and demographics. The difference in purchase and return behaviors for the affected customers from that of the matched sample of unaffected customers provide treatment effect of reduction in customers’ store access costs on their purchase and return behaviors. Our estimates reveal that reduction in customers’ store access costs results in their (1) higher store purchase and returns, (2) higher and more diverse online purchase, (3) higher average product price of online purchase, and (4) higher total net purchase on all channels. We find the effect of store opening only for the affected customers in the lowest quartile of post store opening distance from the nearest store, which suggests that observed store opening effect occurs due to reduction in customers’ store access costs. The observed effect on customers’ online purchase behavior can be explained due to their higher store visits after the store opening near them. Higher store visits may allow customers to evaluate wider variety of retailer’s products that may lead to a higher and more diverse product purchase on the online channel. Moreover, the ability to evaluate and return products in store may mitigate customers’ uncertainty about product fit in the online purchase and thus result in purchase of higher quantities and higher priced products on the online channel. We provide empirical validation of these mechanisms by showing that quantities, diversity, and average product price in online purchase increases only for those customers who make higher store purchase or return interactions with the retailer after the store opening.

Adding store to web: migration and synergy effects in multi-channel retailing

Purpose – The purpose of this paper is to investigate the topic of multi-channel retailing. Specifically, the research intends to determine if and to what extent the opening of physical stores by a former web-only retailer reduces or extends overall retail sales, and whether such effects tend to change over time. Empirical analysis focuses on data elaboration from a retailer who has passed from the initial mono-channel model (pure online), to a multi-channel one with the opening of stores. Design/methodology/approach – Through the analysis of an internal data set of a leading consumer electronics retailer applying Probit and Logit estimation techniques, the authors extract information about actual customers’ purchases (or rather retail sales) in three newly opened stores and about online purchases (through an e-commerce web site managed by the same retailer with the same store brand) by people living in the new store service areas before and after the openings. Findings – The paper shows that, for the single customer, the probability of purchasing online is reduced by the store opening in the short term, but tends to increase in the long term. Besides, results indicate that long-term synergy between the two channels depends mainly on indirect influence due to the mere presence of the store brand in the area rather than on the direct experience of shopping in the store. Research limitations/implications – The study highlights that channel portfolio enlargement from mono- to multi-channel retailing tends to activate a sort of life cycle; while in the early phase of store addition web sales tend to be cannibalized because the two channels are perceived as “substitutes” for each other, in the long run migration turns into a synergy effect; different channels tend to interact with and reinforce each other as customer touch points of the same retailer, in an omni-channel perspective. Originality/value – The paper herein presents various original elements concerning types of available data (actual sales rather than consumers’ intentions/perceptions and individual level data rather than aggregate level ones), estimation technique used (binary choice model) and research hypotheses (distinguishing between “direct” and “indirect” synergy effects in multi-channel retailing).

Does Greater Online Assortment Pay? An Empirical Study Using Matched Online and Catalog Shoppers

Most multichannel retailers offer larger assortment in their online channel than in the offline channels. Conventional belief holds that larger assortment leads to more sales. However, offering more products could also cannibalize the sales of the retailer's main product offerings, hence reducing efficiency in assortment management and increasing cost. Recent behavioral research suggests that excessive assortment can lead to customer cognitive overload and deter them from purchasing. In this paper, we investigate the effect of large online assortment on customer spending. We empirically estimate the effect of large online assortment by exploiting the natural experiment of channel migration, which allows us to compare the spending of customers who migrated to the retailer's online channel with that of a holdout group of pure catalog shoppers. We find that online customers outspend those catalog shoppers by 10.7 percent on the retailer's mainline products. We provide evidence that the increased spending by online customers is due to lower product search cost in the online channel. Lastly, our research suggests that the online sales of low-volume niche products can be an important source of revenue for the retailer.

패션유통시장에서 시장 전문가의 쇼핑 행동과 멀티채널 이용현황 분석

In this study, we determined the characteristics and importance of market maven to today’s fashion retailers. Market maven is defined as an individual who is highly involved in the marketplace and takes a role as an information diffuser. In order to identify market maven, a total of 415 data were collected from 30-40 consumers who purchased fashion items from the various types of retailers. The data were divided into three groups based on the average score of summated market maven’s scale, and the high group was referred to as “market mavens.” Results suggested that the market mavens existed in the fashion retailing market and presented the differences from the other two groups. The market maven group spent more and purchased more fashion items than the other groups. With respect to shopping behavior, the market maven group was more likely to browse and bargain hunt when shopping, and showed higher mean scores on impulse buying and overall satisfaction. In addition, market maven tended to purchase fashion items from different types of retailers including online channel. Accordingly, market mavens seemed to present common characteristics with heavy browser, recreational shopper, and/or multi-channel shopper. Market mavens showed shopping enjoyment characteristics when searching for market-related information from various retailers, hence this segment should be the essential target market in the multi-channel retailing environment.

Crosswise and reciprocal interdependencies within retailers’ multichannel structures

Understanding consumer behavior across channels is the fundamental basis for implementing successful multichannel retailing strategies. This study analyzes the crosswise and reciprocal relationships between offline and online brand beliefs, offline and online retail brand equity and consumers’ conative loyalty to a retailer in multichannel structures. The relationships are contextualized by investigating fashion and grocery retail sectors and different prior channel performances that are likely to affect the paths to loyalty across channels. To provide insight into these issues, two cross-sectional and two longitudinal models are employed. The results show that former brick-and-mortar retailers are able to significantly increase consumers’ loyalty to the firm by primarily designing offline (secondary online) attributes and beliefs. The results hold for retailers in both fashion and grocery retailing, however, with stronger effects in fashion, as well as for retailers with strong vs. weak prior channel performance. However, indirect effects indicate that online brand beliefs and offline retail brand equity are the central strategic levers for prior strong (vs. weak) retailers. Reciprocal relationships between online and offline retail brands underline important channel interdependencies. Managers thus need to take these crosswise and reciprocal interdependencies between channels into account when designing successful multichannel retailing systems. This study introduces the novel idea of simultaneous crosswise and reciprocal relationships within multichannel retail structures and shows that paths to loyalty vary for retailers in different retail sectors and retailers with strong vs. weak offline and online channel performances.

Are Online and Offline Prices Similar? Evidence from Large Multi-Channel Retailers

Online prices are increasingly used for measurement and research applications, yet little is known about their relation to prices collected offline, where most retail transactions take place. I conduct the first large-scale comparison of prices simultaneously collected from the websites and physical stores of 56 large multi-channel retailers in 10 countries. I find that price levels are identical about 72 percent of the time. Price changes are not synchronized but have similar frequencies and average sizes. These results have implications for national statistical offices, researchers using online data, and anyone interested in the effect of the Internet on retail prices. (JEL D22, L11, L81, O14)

온라인 쇼핑에서 웹루밍으로의 쇼핑전환 의도에 영향을 미치는 요인에 대한 연구

온라인 쇼핑에서 웹루밍으로의 쇼핑전환 의도에 영향을 미치는 요인에 대한 연구

Comparing online and in-store risks in multichannel shopping

PurposeThis paper compares empirically the nature, level and influence of perceived risks involved in a retailer’s website and stores, as multichannel shoppers will do when deciding which distribution channel to buy in.Design/methodology/approachThe research design uses an online survey of 1,015 multichannel customers that was drawn from the behavioural databases of a French multichannel retailer.FindingsOverall risk as well as risks associated with logistics, psychological and performance are higher and more dissuasive for an online purchase; however, financial, time and transaction risks tend predominantly or exclusively to discourage in-store purchasing. Customers’ familiarity with the channel seems to make them more vigilant.Research limitations/implicationsThe concept of risk, and especially financial risk, is variable among researchers, making it more difficult to undertake comparative studies on e-commerce than on stores or products.Practical implicationsRetailers should not look merely to the salience of an isolated risk factor but rather should consider its actual impact on their customers’ final decision. Nonetheless, retailers will find it more difficult to reduce perceived risk on-line than in-store.Originality/valueBy focussing on a multichannel retailer’s website and stores and comparing the effects of six types of risk on the purchase attitudes of its multichannel shoppers, this study is distinct from most single-channel studies, which have examined risk inherent in Internet purchasing, handled risk on an experimental website and explored in-store risk. Moreover, the study focuses on the risks entailed by the purchase channel rather than those related to particular products or brands.

Embeddedness and the (re)making of retail space in the realm of multichannel retailing: the case of migros sanal market in turkey

The purpose of this article is to investigate the value of the concept of embeddedness for economic geographers. Alongside the case study of the multichannel grocery retailing brand Migros in Turkey, the spatial impacts – in relational and physical terms – of digitalization and the integration of an online shop into the profile of a supermarket chain are investigated. In applying the concept of embeddedness the article seeks to understand these complex, diverse and uneven processes of (retail) restructurings that affect different dimensions and dynamics of networks, societies and spaces. In my case study I identify two dimensions of embeddedness processes: (1) embedding the online shop in the firm's routines and practices, whereby processes of transfer of knowledge and technology dominate; and (2) embedding online shopping in the customer's routines and practices, whereby processes of adaption to consumer culture dominate. These dimensions are reflexive and as such mirror ongoing negotiation processes between the two stakeholders. On one hand multichannel retailing thus not only alters where but also how people shop, and can result in new retail spaces like pick‐up stores. On the other hand it can be shown, that the “locations”, where online shopping of Migros is available, reproduce spatial variations of socio‐economic factors, such as income distribution or population density. As such, the concept of embeddedness is useful for economic geographers – also in the realm of e‐commerce – to unravel the interconnections of societal, organizational and spatial patterns as well as their variations across space. The study is based on qualitative interviews.

AIRLINE FARES: A COMPARISON BETWEEN SPANISH AND FRENCH TRAVEL AGENCIES

The existence of different types of intermediaries - e-tailers, traditional or offline retailers and multichannel retailers - engaged in the sale of airline tickets has enabled consumers to find different prices if they spend time searching for information. This has prompted internet marketing research to increasingly focus on the issue of pricing, analyzing the differences between these retailers with respects to price levels, price dispersion, pricing strategies, etc. Moreover, there are also studies examining the effects of culture on prices. However, there is no literature on the effects of the culture from the supplier point of view. This paper attempts to fill in the gap by studying whether the geographical locations of the travel agencies affect airline ticket prices. In particular, the study compares the price behavior of French and Spanish intermediaries operating exclusively online and those operating simultaneously in travel agencies and on the internet (offline and online). To this end, we consider three routes that connect Madrid, Paris and New York, with data starting four months prior to the departure date (December 16, 2013). The results show several differences in the price levels and price dispersion between intermediaries in relation to the type of retailer and their geographical locations.

Finding a Needle in a Haystack: The Effects of Searching and Learning on Pick-Worker Performance

The rise in online and multichannel retailing has pushed retailers to give increased attention to their order fulfillment operations. We study chaotic storage fulfillment systems in which dissimilar items are stored together in a single location. This necessitates a searching task as part of the picking process, which has not been previously studied. We show that pick times increase by as much as 16% as the searching task becomes more difficult. However, the deleterious effect of searching decreases with pick worker experience. Using simulation, we show that pick times can be improved by incorporating distance, bin density, and picker experience into pick assignments and pick routing. Through properly combining the details of the task and the workers, order fulfillment productivity can be increased by approximately 5%.

An Exploratory Investigation of Multidimensional Customer Contact Sequences - Insights into Customer Behaviour in Multichannel Retailing

An Exploratory Investigation of Multidimensional Customer Contact Sequences - Insights into Customer Behaviour in Multichannel Retailing

An Empirical Study on the Customer Channel Choice Behavior in the Overall Process of Shopping Under O2O Mode

Through dividing the entire shopping process into three stages: pre-purchase, purchase and post-purchase, this study analyzed the customers' channel choice behavior in each, from perspectives of product quality, Customers and channels. Based on a survey answered by 395 multi-channel shoppers, the findings show that the products' perceptibility and security, is positively associated with the online channel (vs. offline) during the pre-purchase and purchase stages and no significant association in the post-purchase stage. The customers' shopping motivations and network involvements are positively associated with the online channel in the pre-purchase and purchase stages, but the perceived risks are negatively associated with the online channel throughout the entire shopping experience. The channel's usefulness has a significant and positive correlation with the online channel in all three stages of shopping, but the channels' ease-of-use only has a significant and positive impact in the pre-purchase stage and weaker in the other two. The findings provide some useful suggestions for multichannel retailers.

Towards the identification of customer experience touch point elements

In this paper, the authors identify the elements that encompass customer experience touch points. This research was based on a qualitative research approach, using a sequential incident technique to guide the data collection. An inductive thematic analysis of the semi-structure interview transcripts, collected from customer narratives of experiences with retailers, was employed to identify distinct elements of customer experience touch points. The findings uncovered seven distinct elements of customer experience touch points, which include; atmospheric, technological, communicative, process, employee–customer interaction, customer–customer interaction and product interaction elements. The findings highlight that multichannel retail touch points are made up of varying combinations of the identified elements. The study offers a comprehensive understanding of customer experience; one that will help retailers to orchestrate the customer experience at individual touch points.

의류제품 특성에 따른 멀티채널 선택행동 분석

Recently, with the rapid development of the Internet, the importance of the multi-channel retailing strategy including online channel has been emphasized in fashion business. The purpose of this research is to give some practical ideas of multichannel strategy for fashion retailers through comparison for multichannel choice behaviors between Korean and US consumers. The online survey was conducted on the 400 fashion customers aged between 20s and 50s living in Korea and America. The survey consisted of measurement items about channel choice behaviors for purchase or information search, risk perception on channel, repurchase intention at same channel, perception on experience or search goods among apparel items. The data were analyzed by frequency, regression, t-test using SPSS 18.0 program. The ratio of utilization multichannel was higher in fashion goods area in Korea fashion business. Also, most of Top-ranked fashion or accessory retailers in America were taking advantage of multichannel strategy. There were some differences between Korea and US consumers in channel choice behaviors for purchase or information search, risk perception for retail channel, repurchase intention at same channel, perception on experience or search goods among apparel items, etc. Some suggestion for the future research for multichannel strategy in fashion retailing was given.

Channel selection in a supply chain with a multi-channel retailer: The role of channel operating costs

In this paper we establish a linear demand model to explore the channel selection and pricing strategy in a supply chain that comprises a dominant multi-channel retailer, and a manufacturer that sells two horizontally differentiated products through its own direct channel and the retail channel, respectively. We find that the gap between the online and offline channels׳ operating costs is critical to the retailer׳s choice of its channel selection strategy. Multi-channel selling is the best choice for the retailer only when the cost-gap is narrow enough. Conversely, the retailer should only select the low-cost channel if the cost-gap is too large. In addition, we find that small product differentiation is more favorable to the manufacturer in a retailer-led supply chain as the retailer is forced to reduce its margin and retail price. Meanwhile, the manufacturer can benefit from a rise in the wholesale price and increasing demand in the retail channel. Finally, we consider the case where the manufacturer, instead of the retailer, acts as the decision maker for channel selection. We find that in theory the manufacturer will adopt the same channel selection strategy as the retailer in this case.

The role of the brand in driving online loyalty for multichannel retailers

Multichannel retailers offer shoppers the possibility to cross channels to complete their shopping process. Multichannel retailers, unlike pure online sellers, offer shoppers multiple contact points to experience the brand. Also, multichannel retailers can leverage the trust and attachment to their brands that has been built with their offline presence to drive customers to buy online. Our paper explores the role of the customer relationship with the brand, with variables such as brand trust, brand attachment and length of brand relationship, as drivers of loyal behaviours towards the online channel. We compare the impact of these variables with those of the technology acceptance model. Multiple linear regression analysis is applied to data collected through a survey answered by 1533 multichannel retail shoppers in two product categories (apparel and consumer electronics) in two countries (UK and Spain). Our findings show that both brand trust and brand attachment have a positive impact on loyal behaviours towards the online channel, and that different loyalty behaviours, i.e. purchase intentions, word of mouth and electronic word of mouth are explained by different variables.

Identifying patterns in channel usage across the search, purchase and post-sales stages of shopping

Consumers today are using various channels to complete their purchase process. As shoppers pursue different goals at each stage of the process, channel choice may be explained by different drivers for search, purchase and post-sales activities. Our research framework is based on an extension of the TAM Model with the support of the Motivational Model, differentiating two types of motivations for channel usage: intrinsic and extrinsic. Moreover, we rely on transaction costs economics to explain different channel usage at each shopping stages and for different product categories. Lineal regression and cluster analysis are applied to data collected through a survey answered by 1533 multichannel retail shoppers within two product categories (apparel and consumer electronics) in two countries (UK and Spain). Our findings show that segments with different usage patterns and motivations can be identified across the shopping process and that the drivers of channel usage are different depending on the stage of the buying process and the product category considered.

Preparing students for careers in multichannel retailing using an authentic experiential learning project

Multichannel retailing education has penetrated into fashion marketing programmes with the emergence of ecommerce. Although class textbooks and lectures help set the curriculum in motion, there is a lack of educational literature on the experiential learning practices in multichannel retailing classes. This paper introduces an experiential learning group project that complements multichannel textbooks and lectures to better prepare students for careers in the multichannel retailing world. The project specifically assigned students the task of building an online presence for actual brick and mortar stores near the university. The four learning modes of experiential learning were used as the framework to record the transformations which occurred from the students’ experiences with the project. The learning outcomes demonstrated the students’ development of knowledge and skills relevant to careers in today's multichannel retailing environment. Future research opportunities and limitations are also discussed.

One firm, one product, two prices: Channel-based price differentiation and customer retention

Every multichannel retailer must decide whether and how to apply channel-based price differentiation. This study identifies channel-related price differentiation instruments and considers their effects on customer retention. It empirically tests hypotheses using a laboratory experiment and analytically investigates feasibility conditions. Results show that channel-based price differentiation positively affects customers through perceived value but harms retention through price unfairness and limited self-determination. The mobile communications retailer in this study would require 5.1% lower operating costs online to ensure its profitability. These results indicate that multichannel retailers with channel-based price differentiation should carefully select their price instruments and meet the feasibility conditions.