Integrating Bricks with Clicks: Retailer-Level and Channel-Level Outcomes of Online–Offline Channel Integration

This research examines the impact of online–offline channel integration (OI), defined as integrating access to and knowledge about the offline channel into an online channel. Although channel integration has been acknowledged as a promising strategy for retailers, its effects on customer reactions toward retailers and across different channels remain unclear. Drawing on technology adoption research and diffusion theory, the authors conceptualize a theoretical model where perceived service quality and perceived risk of the Internet store mediate the impact of OI while the Internet shopping experience of customers moderates the impact of OI. The authors then test for the indirect, conditional effects of OI on search intentions, purchase intentions and willingness to pay. Importantly, they differentiate between retailer-level and channel-level effects, thereby controlling for interdependencies between different channels. The results of three studies provide converging evidence and show that OI leads to a competitive advantage and channel synergies rather than channel cannibalization. These findings have direct implications for marketers and retailers interested in understanding whether and how integrating different channels affects customer outcomes.     

Game-Theoretic Coordination Mechanisms in Distribution Channels: Integration and Extensions for Models Without Competition

A significant game-theoretic literature on the coordination of distribution channels has developed over the past three decades. We provide an extensive analysis of an important subset of this literature, channels without competition. We review four major models that build on the initial work of Jeuland and Shugan (1983) – who developed a quantity-discount schedule that induces channel members to set price and non-price, marketing-mix variables (MM-variables) at channel-coordinating levels. Moorthy (1987) criticized their schedule's complexity, arguing for a simpler wholesale contract that induces coordination by avoiding double marginalization.     

Omnichannel-based promotions’ effects on purchase behavior and brand image

This paper examines the effects of utilizing consumers’ digital shopping traces when designing in-store promotions on purchase behavior and brand image. In two experimental studies with 526 and 550 espondents, the authors examine the effects of omnichannel-based promotions (e.g. using digital shopping trace to offer a promotion when the consumer enters the physical store) in two different product categories (utilitarian vs. hedonic), spontaneous/planned purchases and two different retail industries (durable good vs. travel). The results show that retailers benefit from using digital shopping traces as it increases purchases and enhances brand imagery. The effects are moderated by product category and type of purchase.     

Whether to offer return-freight insurance or open a physical showroom: A strategic analysis of an online retailer’s decisions

Return-freight insurance (RI) and physical showroom (PS) can be a double-edged sword for retailers, as they can help consumers reduce product mismatch and information uncertainty but may lead to higher return rates and operating and construction costs. In this study, we examine four corresponding configurations regarding whether to provide RI (yes-R, no-N) and whether to open a PS (yes-S, no-N): NN, RN, NS, and RS. First, we find that offering RI or opening a PS does not necessarily expand market demand. Whether demand grows is closely related to the RI premium. When the RI premium is low, the RN strategy, which offers only RI, can expand the market, and the NS and RS strategies, where retailers open a PS, can shrink the market. In addition, retailers offering RI charge a higher sales price, while those opening a PS adopt a price reduction strategy. Second, the optimal strategy configuration for retailers depends on four factors: the RI premium, the proportion of consumers, the retailer’s cost of handling returns and the PS construction cost. Retailers consider opening a PS only when both the proportion of high-cost consumers and the PS construction cost are low. An interesting result is that when the RI premium is higher, offering RI still benefits the retailer. Third, we present an intuitive decision support matrix to help retailers recommend the optimal strategy configuration, using the RI premium as a proxy for the product online return rate and the proportion of high-cost consumers as a proxy for the degree of product standardization. Depending on whether products with high (low) return rates are highly personalized or standardized, retailers decide whether to use an NS (RS) or NN (RN) strategy.     

The Impact of Cross-Channel Integration on Retailers’ Sales Growth

The authors propose a conceptual framework to explain whether and under what firm-level conditions cross-channel integration impacts firm sales growth. To test the theory, the authors conduct a qualitative grounded-theory study to build a measurement tool for cross-channel integration at four levels and analyze longitudinal data on 71 publicly traded U.S. retail firms from 2008 to 2011, gathered from multiple secondary sources. The findings reveal that cross-channel integration stimulates sales growth, but that firm online experience and physical-store presence weaken this effect.     

Are privacy concerns still relevant? Revisiting consumer behaviour in omnichannel retailing

Omnichannel retailing is a new retail norm that focuses on providing a seamless interaction between retailers and consumers. Although the effect of omnichannel retailing on business is increasingly recognised, privacy concerns remain a subject of debate and a delicate issue which could potentially inhibit its growth. Grounded in the Stimulus–Organism–Response (S–O–R) model, the current study investigates consumer behaviour in omnichannel retailing and uses Psychological Reactance Theory (PRT) as the theoretical basis to examine the moderating effect of privacy concerns. A quantitative approach was adopted by means of self-administered questionnaires. 736 consumers were sampled, and the data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The findings show that consumer perception of channel integration (CPCI), consumer empowerment (CE), and trust significantly affect patronage intention in omnichannel retailing. In addition, when privacy concerns are low, the effects of CPCI and CE on trust are found to be stronger. It underscores the need to synergize channel integration, retailer-consumer relationship empowerment and effective mitigation of privacy concerns in the omnichannel retailing context. Implications of the study are provided.     

Does retail type matter? Consumer responses to channel integration in omni-channel retailing

A critical issue faced by marketing practitioners today is orchestrating strategies that provide a smooth consumer experience in an omni-channel environment. The extant literature offers limited guidance on managing the consumer journey in an omni-channel environment across different retail types. Using the S–O-R framework as its basis, this study generates novel insights by examining how different types of retailers influence consumer perceptions of channel integration (CPCI) as well as consumer empowerment, trust, satisfaction, and patronage intention. Data from 736 consumers was collected using purposive sampling to target those who interact with retailers from high-end specialty stores, department stores, and hypermarkets. The data was then analysed using partial least squares structural equation modelling (PLS-SEM). We find that consumers from high-end specialty stores, hypermarkets, and department stores have different perceptions when patronising the omni-channel retail business. The implications of the study are discussed and suggestions for future research are presented.     

Seamless experience in the context of omnichannel shopping： scale development and empirical validation

In recent years, delivering a superior seamless experience (SE) for customers has become one of the most crucial aspects of omnichannel marketing for omnichannel retailers. However, research lacks a common understanding of what the SE is and how customers evaluate the SE throughout their omnichannel shopping journeys, and the effects of the SE on important customer behaviors remain unexplored. Drawing on omnichannel customer experience research, following the scale development process, this research conceptualize and develop a scale to measure the SE construct. Building on the customer experience quality framework, this research further examines the effects of customers’ prior SE on repurchase intention, word of mouth (WOM), and customer influence behavior in the omnichannel shopping context. The SE scale is developed and validated by performing 15 semi-structured interviews, 62 open-ended questionnaires, and three online surveys with 884 useable respondents in total. The effects of SE are then validated via partial least squares modeling with 307 useable respondents. The findings confirm that the SE construct is a formative second-order construct composed of six reflective first-order dimensions. Our empirical findings indicate that the overall SE has a direct and significant impact on the foregoing three customer behaviors. Managers can use the SE scale as an effective omnichannel approach to design a seamless shopping journey and maintain long-term relationships with customers.     

Social Contagion and Customer Adoption of New Sales Channels

We develop and test hypotheses regarding the role of social contagion in customer adoption of new sales channels. We examine two aspects of social contagion (local contagion and homophily) and two channels (Internet and bricks-and-mortar store). Drawing on diffusion theory, we propose a conceptual framework that identifies the factors associated with new channel adoption. Using longitudinal data from a major catalog company and a discrete-time hazard model, we find that (1) social contagion plays a major role in the adoption of new sales channels, (2) both local contagion and homophily influence channel adoption, (3) longer-tenured customers are less influenced by social contagion, and (4) adoption of the Internet channel is more influenced by social contagion than adoption of the bricks-and-mortar store. Managerially, our results suggest that marketing programs that encourage social contagion, for example, word-of-mouth campaigns, be targeted based on both physical and socio-economic proximity, and that such campaigns will play a bigger role in the adoption of new-to-the-world channels.