Cross-selling across stores or within a store? Impacts of cross-buying behavior in online shopping malls

Abstract

This study investigates the impacts of cross-buying behavior in an online shopping mall where customers can purchase from additional product categories from various independent stores. We focus on the extent to which store loyalty and relationship duration moderate the cross-buying effects on three behavioral traits: customers’ purchase rate, lifetime duration, and spending. The results reveal that customers who engage in cross-buying more intensely purchase more frequently, have longer expected lifetime duration, and spend higher amounts in each transaction. The impacts on purchase frequency and customer retention are even greater for customers who exhibit higher behavioral loyalty toward some stores. However, store loyalty is found to weaken the association between cross-buying and average spending. Further, relationship duration appears to weaken the effects of cross-buying on purchase rate and spending. These results provide new insights into the impacts of cross-buying on customer value as well as managerial implications for shopping mall owners.     

The Impact of Mobile App Adoption on Cross-buying: The Moderating Roles of Product Category Characteristics and Adoption Timing

With more and more companies introducing mobile apps and consumers using them during the purchase journey, it is increasingly important to understand the consequences of app adoption on behavioral outcomes. This paper investigates the impact of app adoption on the number of additional products purchased by customers (i.e., cross-buying) and how this effect varies across different product categories and different customers. We focus on two key product category characteristics (utilitarian vs. hedonic nature and perceived risk) and on adopters who vary in their adoption timings (early vs. late adopters). Using data from an online retailer and a combination of propensity score weighting with difference-in-differences and Heckman correction estimation techniques, the results show that app adoption has a positive effect on cross-buying overall, but the effect varies greatly across products and consumers. App adoption promotes additional product purchases for hedonic products but leads to less cross-buying for utilitarian products. In addition, early adopters purchase a higher number of additional product categories than late adopters, with this difference decreasing over time and for new consumers compared to existing customers. These results offer novel insights into the behavioral consequences of app adoption and provide managers with useful recommendations for improving the effectiveness of their mobile app investments.     

Understanding multi-channel consumer behavior: A comparison between segmentations of multi-channel purchases by product category and overall products

This study explores how customers utilize multiple channels in a recent retail environment. It provides a compatible framework for customer segmentation for overall products and major online-focused product categories, which reflect dynamic purchasing needs in multiple channels, using latent class cluster analysis and focusing on demographic characteristics. It extends prior studies’ frameworks by analyzing 15,938 Japanese single-source panelists’ data on low-involvement frequently purchased categories with customers’ demographics. The analyses revealed eight segments, including the specific properties of multi-channel enthusiasts. The findings imply that FMCG product classes and the corresponding consumer segments that are appropriate for cross-selling can be specified in our system, which incorporates possible future dynamic customer needs and can reduce the possibility of significant profit losses.     

网上银行服务质量要素对交叉购买的影响——基于关系长度与竞争者吸引力调节作用的视角

网上银行服务质量包括网站外观、可获取性、可靠性、响应性、安全性和产品质量等6个要素。由此本文构建了网上银行服务质量要素、关系长度、竞争者吸引力与交叉购买之间的关系模型。通过对502个有效样本的实证研究发现,网站外观、可获取性、可靠性、安全性和产品质量等网上银行服务质量要素对交叉购买有显著的正向影响,关系长度、竞争者吸引力在服务质量要素与交叉购买关系中具有一定的调节作用。为了促进网上银行顾客交叉购买,需要全面优化网上银行不同服务质量要素,并针对顾客关系长度和竞争者吸引力来选择改进服务质量的侧重点。     

Antecedents and consequences of cross-effects: An empirical analysis of omni-coupons

As the modern retail industry evolves from multi-channel to seamless omni-channel retailing, retailers are increasingly adopting omni-channel strategies, such as the usage of omni-coupons. A consumer may obtain an omni-coupon from a digital (catalog) channel and purchase either online or via the telephone channel. Past studies have not examined such cross-channel effects at the purchase incidence level. Using customer transaction data from an omni-channel retailer, we investigate the key drivers of cross-effects, and the impact of such cross-effects on two consumer purchase outcomes (purchase value and cross-buying). We specifically study two types of cross-effects, a) catalog-to-online and b) digital-to-telephone, and find that the effect of time variables and individual characteristics on them is asymmetric. We also show that the impact of such cross-effects on purchase outcomes depends on whether the omni-coupon was sourced digitally or from a catalog. Retailers aiming to increase cross-buying should prioritize catalog coupons, while those aiming to increase purchase value should prioritize digital coupons.     

Prepayment and future cross-buying: an exploratory analysis

Recent research has provided important insights on consumers’ preferences for prepayment mechanisms and on its impact on consumption of a given product or service. However, little is known about how prepayment influences future purchases of goods and services. We consider this question in a contractual setting within the services industry, involving different purchasing decisions over time. Based on a large-scale empirical test, we find that prepay customers make fewer changes to their cross-buying levels (i.e., the number of different services they buy from the company) from one contractual period to another, and that this effect is more salient for the firm's new customers. We propose possible explanatory mechanisms for this effect. For instance, based on mental budgeting theory, we suggest that prepayment customers may set mental budgets and track expenditures against this budget leading them to resist further investments. Alternatively, prepayment customers may be more certain about their consumption behavior leading to fewer changes over time.

     

Cross-buying evaluations in the retail banking industry

Is a customer’s past purchase experience of traditional banking products applicable to the continuing purchase of insurance and investment products at a bank branch? Are service attributes used with similar extensions evaluated differently from when used with dissimilar extensions? In response to these questions, this study develops and examines a framework of service attributes (e.g., locational and one-stop shopping convenience, functional and technical service quality, and firm reputation and size) having positive effects on cross-buying. Meanwhile, this study also examines the mediating roles of satisfaction and trust on the relationship between services attributes and cross-buying. Our results indicate that the relative importance of locational convenience and functional service quality is likely to decline, while the relative importance of one-stop shopping convenience and firm size is likely to increase as category dissimilarity increases. Technical service quality and firm reputation only have indirect effects on cross-buying dissimilar product categories through trust. Instead, satisfaction plays the mediating role for cross-buying similar product categories. Our findings reinforce the view that the relative effects of service attributes, satisfaction and trust on cross-buying vary under different category similarity conditions.     

Applying latent trait analysis in the evaluation of prospects for cross-selling of financial services

Identification of the order in which households acquire financial services has important implications for market segmentation and cross-selling strategies. This study illustrates a procedure by which financial institutions, based on internal records, can estimate the likelihood that a customer will purchase/use additional services. The methodology discussed in this study positions financial services and investors along the same continuum according to the particular ownership pattern. The location of an investor indicates his financial expertise and resources, while the location of a financial service measures the level of expertise/resources needed for ownership of that service.A key feature of the methodology is its ability to predict the probability of ownership of some financial services given information on (non-)ownership of other services. This study concludes with an illustration applying the methodology for targeting customers for cross-selling efforts.     

Cross-Divisional Orientation: Antecedents and Effects on Cross-Selling Success

Purpose: To determine which company internal prerequisites must be in place and managed to realize a successful cross-selling strategy and to find answers on how to overcome cross-selling obstacles.

Methodology/approach: Qualitative and quantitative data from various industries provide insights into the implementation of a successful cross-selling strategy. Qualitative data serve to derive the hypotheses and constructs and design quantitative measures. Structural equation modeling with data from a management survey of an industrial glass manufacturer tests the proposed effects.

Findings: The cross-divisional orientation of a company affects the realization of cross-selling potential and the number of product divisions a salespersons sells. These factors then influence the salesperson's motivation and readiness to engage in cross-selling activities, which finally affect the company's overall cross-selling success. A salesperson's state of mind has the greatest impact on cross-selling success.

Research implications: Similar results might be expected for various other industries, which need to be tested. The findings could be enhanced by incorporating a wider range of customer characteristics into the analysis, as well as other mediating or moderating variables.

Practical implications: There is a clear need to enable cross-divisional acting and thinking among salespeople. Managers should foster cross-selling motivation and invest in specific training and recruitment to increase the dissemination of knowledge across divisions and reassure salespeople about offering various products.

Originality/value/contribution: This contribution to current practice clarifies why cross-selling often does not work and why it remains so challenging to realize. The combination of three sources of data—qualitative, objective, and quantitative—advances cross-selling research by considering internal obstacles to cross-selling and revealing ways to overcome them.     

Relating strategic market orientation and market performance: role of customer value types

A service provider achieves competitive advantage by configuring appropriate strategic orientation and customer value type. This paper addresses three important issues: (i) which customer value type (economical, relational or technical) is important for bank customers? (ii) which strategic market orientation (customer or competitor) helps in achieving the desired value type? and (iii) which value type significantly predicts market performance? We propose that a strategic market orientation pursued by a firm shall influence the customer value it intends to offer so as to maximize the market performance. Using data collected from 538 bank customers, this study reveals that when there is a perfect match between strategic market orientation and value being perceived by its customers, a firm shall achieve strategy-value fit and realize optimal market outcomes in the form of customer satisfaction, acquisition, retention, cross-selling, and up-selling. Furthermore, a bank shall realize maximum level of market performance if it pursues both customer and competitor orientation and endeavors to deliver technical/functional value to its target customers. The paper concludes with managerial implications and future research directions.     

Does online relationship marketing enhance customer retention and cross-buying?

One characteristic of online consumer behavior is the low cost of searching for alternatives. Therefore, customer loyalty is more difficult to achieve in the online context than in the offline one. Although studies have discussed the effectiveness of relationship marketing, nearly all studies examining such constructs have been in the context of ‘offline’ consumer behavior. With regard to the ‘online’ context, the integration of Internet technology with the customer loyalty concept is rarely discussed in the relationship marketing literature. Furthermore, empirical research that integrates the actual purchase behavior of customer retention and cross-buying is relatively sparse. In response to this, the current study develops and empirically tests a model that examines the relations among relationship-bonding tactics, perceived relationship investment, perceived relationship quality, customer loyalty, customer retention, and cross-buying. Using survey data from 766 online customers of a securities corporation, the results demonstrate the effectiveness of relationship marketing as it positively influences online customers' perception, then their loyalty, and ultimately, their actual purchase behavior.     

Measuring Performance and Customer Satisfaction in a Cross-Selling Environment:

Banks continuously look for methods to implore to retain existing customers and to acquire new customers. In this paper a type of performance measurement/customer satisfaction method, used at a Midwest regional bank, to gauge the cross-selling efforts by its employees is introduced and examined.     

Nigerian Banks-Quality of Services

Abstract

The qualitative characteristics of the service are becoming increasingly important. Quality improvements can lead to increased revenues and decreased costs as a result of increased customer loyalty and the cross-selling of bank products, as loyal customers spend more with chosen banks, attract lower administration costs and are more profitable. The objective of this research is to identify customers' expectations and perceptions of bank service quality to determine the service quality level. It also aims to determine key factors in selecting a particular bank. The findings of the research suggest that the key factors in selecting a particular bank are credibility, location and range of services. The majority of respondents are dissatisfied with the quality of services provided by banks in Nigeria. The research has indicated that complicated procedures and forms, queuing time, lack of individual approach and absence of new technology are some of the factors which create dissatisfaction and lack of co-operation between firms and banks. Interestingly these results are similar to customers in developed countries as indicated by similar studies in developed countries.     

A taxonomy of back-shoring initiatives in the US

The study develops an empirical taxonomy of manufacturing back-shoring initiatives to the US, based on the drivers the location decision. Results identify six patterns of back-shoring, which highlight the importance of concurrently considering different theoretical lenses to interpret the phenomenon. Back-shoring initiatives are significantly driven by non-price related costs, which include the costs of governance. Institutional pressures coming from customers demanding country-of-origin branding and from political bodies are also important drivers, while the exploitation of distinctive resources that allow firms to compete in high-segment markets is less relevant. The study also highlights that back-shoring patterns are significantly related to within-border location advantages, such as state-level median wages, productivity, and innovation capacity.     

How to increase multichannel shopping satisfaction? An adapted Kano based stage-gate approach to select new technologies

Today, brick-and-mortar retailers with integrated online shops have many alternatives to increase their customers’ shopping satisfaction: They could invest in (for the retailers) new physical store technologies (e.g., beacons or magical mirrors if not implemented up to now), new online shop technologies (e.g., visual tagging or webcams), or in new less technology-based improvement options (e.g. events or product testing). We propose an adapted Kano based stage-gate approach to support multichannel retailers confronted with such selection problems. The approach is applied to a major European sporting goods retailer. 37 improvement options are pre-selected and evaluated by current and potential customers. It can be shown that instore returns, instore services, reserve&collect, click&collect, customization, product testing, and magical mirrors are drivers of satisfaction for the current customers and should be implemented in contrast to, e.g., geofencing or beacons. The potential customers are more technology-savvy, but show similar categorizations as a current customer segment and so confirm the selection.     

Behavioral changes of multichannel customers: Their persistence and influencing factors

This study addresses how behavioral changes following a new channel's adoption persist over time, and how their patterns vary among customers. We verify the roles of individual behavioral traits reflecting self-selection, marketing exposure, and loyalty in explaining these differences. Based on the elaboration likelihood model and attitude commitment theory, we develop hypotheses to predict these traits' effects on customers' membership in a particular segment with a unique post-adoption behavioral pattern. A latent class model is developed to empirically identify various customer segments and connect behavioral traits to the probability of segment membership. The results reveal that only 25% of the sample exhibits permanent behavioral changes, and most of these tend to buy from numerous stores with intense cross-buying. Approximately 43% of customers who temporarily changed their behaviors were strongly inclined to use multiple shopping channels and spend substantial amounts on hedonic products. The remaining 32% who did not change their purchases appear to be frequent buyers. We also discuss the work's implications for managing multichannel customers.     

Maximizing Profits for a Multi-Category Catalog Retailer

It is a common trend in the retail industry for catalog retailers to mail multiple catalogs, each promoting different product categories. The existing catalog mailing models do not address the issue of optimizing multi-category catalog mailing. We address this research gap by introducing a model that integrates the when and what components of a customer's purchase decision into the how much component (number of catalogs) of a firm's cross-selling strategy. In addition to comparing the impact of category-specific versus full product catalogs in generating sales in a specific category, the study also finds relative impacts of various category-specific catalogs. We jointly estimate the probability of purchase and purchase amounts in multiple product categories by using multivariate proportional hazard model (MVPHM) and a regression based purchase amount model in a Hierarchical Bayesian framework. The model accounts for unobserved heterogeneity, and uses a control function (CF) approach to account for endogeneity in catalog mailing. The results from the Genetic Algorithm (GA) based optimization suggest that the catalog mailing policy as per the proposed model would be able to generate 38.4 percent more customer lifetime value (CLV) from a sample of 10 percent of the households as compared to the current catalog mailing policy of the retailer by reallocation of the catalogs across customers and mailing periods based on their propensity to buy.     

Managing customer experiences in online product communities

Many companies have established online product communities or forums as a vehicle to extend product support services to their customers. Customers' interactions in such online forums with peer customers and vendor representatives resolve their product-related queries as well as inform on their product purchase decisions. Despite the significance of such interactions, there has been limited theoretical attention so far on how companies can manage customer experiences in online product communities. Drawing on theories and concepts from diverse areas including computer-mediated communication, consumer psychology, and online communities, this study proposes a four dimensional construct - Online Community Experience (OCE) - to capture customer experiences in such online product communities, and examines its impact on customer attitudes regarding the product, the company, and the quality of service. Data collected from customers in online product forums offered by four companies is used to test the study hypotheses. Implications for research on online consumer behavior and marketing are discussed.     

What drives competitive webrooming? The roles of channel and retailer aspects

ABSTRACT

Competitive webrooming, the phenomenon in which consumers gather product information online but ultimately purchase the product in an offline store of a competing retailer, has gained traction and become a major threat for retailers. To gain a deeper understanding of its drivers, we surveyed 1081 retail customers about their most recent consumer electronic product purchase to examine the impact of channel-related aspects as well as retailer-related aspects – a dual approach that has not been applied previously. A channel’s anticipated after-sales service and price level are the strongest predictors for webrooming. Moreover, retailer aspects determine whether customers simultaneously switch retailer when webrooming. A retailer’s assurance of delivery, including payment modalities, return policies, and product obtainment, as well as competitive product prices motivate consumers to switch retailer when webrooming. These results suggest that customers have a fundamental need for certainty within and after the buying process, which can be satisfied by both channel and retailer. Additionally, this is the first study to empirically test for interactions between channel and retailer aspects, as they are likely to occur in real shopping situations. We identified two interactions: First, a retailer’s assurance of delivery can compensate for an anticipated lack of a channel’s after-sales service, dampening the impact of the latter on competitive webrooming. Second, retailer’s price attractiveness acts in a similar vein. Hence, to steer customers into channels and/or keep them with the company, retailers should emphasize their price attractiveness as well as assurance of delivery.