Why Do Stores Drive Online Sales? Evidence of Underlying Mechanisms from a Multichannel Retailer

Information Systems Research,30(1), March 2019, 319-338

Mays Business School Research Paper No. 2500942

Fox School of Business Research Paper

52 Pages Posted: 25 Sep 2014 Last revised: 30 Oct 2019

See all articles by Anuj Kumar

Anuj Kumar

University of Florida - Warrington College of Business

Amit Mehra

University of Texas at Dallas

Subodha Kumar

Temple University - Department of Marketing and Supply Chain Management

Date Written: June 1, 2018

Abstract

Different mechanisms through which easier access to physical stores could affect customers’ online purchase behavior are not well understood in the literature. We use customer-level data of a large apparel retailer to estimate the treatment effect of store openings on the online purchase behavior of its existing customers. We find that retailer’s store openings resulted in increase in the online purchases from its existing customers. We propose two mechanisms that could explain these results: (1) store engagement effect - higher customers’ engagement with the retailer due to higher store interactions and (2) store return effect - reduced risk of online purchase due to the low cost option of store returns. We provide direct empirical evidence of these mechanisms on our field data. We further show that these effects are caused by reduction in customers’ distances from the retailer’s store due to the store openings.

Keywords: Ecommerce, Multichannel customer behavior. Omnichannel retail, matching estimators, average treatment effect

JEL Classification: C93

Suggested Citation

Kumar, Anuj and Mehra, Amit and Kumar, Subodha, Why Do Stores Drive Online Sales? Evidence of Underlying Mechanisms from a Multichannel Retailer (June 1, 2018). Information Systems Research,30(1), March 2019, 319-338, Mays Business School Research Paper No. 2500942, Fox School of Business Research Paper, Available at SSRN: https://ssrn.com/abstract=2500942 or http://dx.doi.org/10.2139/ssrn.2500942

Anuj Kumar (Contact Author)

University of Florida - Warrington College of Business ( email )

337 STZ WARRINGTON COLLEGE OF BUSINESS
GAINESVILLE, FL 32611-0001
United States
3522730587 (Phone)

Amit Mehra

University of Texas at Dallas ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States
9728835083 (Phone)

Subodha Kumar

Temple University - Department of Marketing and Supply Chain Management ( email )

Philadelphia, PA 19122
United States

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