Abstract

http://ssrn.com/abstract=2149095
 


 



Integration of Online and Offline Channels in Retail: The Impact of Sharing Reliable Inventory Availability Information


Santiago Gallino


Dartmouth College - Tuck School of Business

Antonio Moreno


Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS)

June 1, 2013


Abstract:     
Increasingly, retailers are integrating their offline and online channels to reduce costs or to improve the value proposition they make to their customers. Using a proprietary dataset, we analyze the impact of the implementation of a buy-online-pickup-in-store (BOPS) project. The implementation of this project is associated with a reduction in online sales and an increase in store sales and traffic. These results can be explained from two simultaneous phenomena: 1) Additional store sales from customers that use the BOPS functionality and buy additional products in the stores (cross-selling effect); and 2) Shift of some customers from the online to the brick and mortar channel, and conversion of non-customers into store customers due to the more accurate store inventory information (channel shift effect). We interpret these results in light of recent operations management literature that analyzes the impact of sharing inventory availability information online. The implementation of a buy-online-pickup-in-store project provides an exogenous shock to the verifiability of the inventory information that the firm shows to their customers. The fact that inventory information becomes more credible reduces the risk that customers face when deciding whether to visit the store. We validate these theories with an analysis of the change of cart abandonment and conversion rates of the brick and mortar and online channels. Our analysis illustrates the limitations of drawing conclusions about complex interventions using single channel data.

Number of Pages in PDF File: 36

Keywords: retail operations, inventory availability, empirical operations management, business analytics, online retail

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Date posted: September 20, 2012 ; Last revised: July 2, 2014

Suggested Citation

Gallino, Santiago and Moreno, Antonio, Integration of Online and Offline Channels in Retail: The Impact of Sharing Reliable Inventory Availability Information (June 1, 2013). Available at SSRN: http://ssrn.com/abstract=2149095 or http://dx.doi.org/10.2139/ssrn.2149095

Contact Information

Santiago Gallino (Contact Author)
Dartmouth College - Tuck School of Business ( email )
100 Tuck Dr
Hanover, NH 03755
United States
Antonio Moreno
Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )
2001 Sheridan Road
Evanston, IL 60208
United States
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