Omnichannel Promotion Effectiveness

Yuchi Zhang

University of Maryland - Robert H. Smith School of Business

Xueming Luo

Temple University

Fue Zeng II

Wuhan University

November 1, 2016

Robert H. Smith School Research Paper No. RHS 2884190

Despite the importance of promoting online (offline) customers to buy offline (online), little is known about how such targeted promotions actually influence the web, in-store, and total sales. We exploit two randomized field experiment datasets from a large department store with mobile promotions sent to its loyalty members. Experiment 1 finds that the treatment of targeting online customers with offline shopping promotions (online-to-offline) is effective in lifting in-store sales and total sales. Experiment 2, however, finds that targeting offline customers with online shopping promotions (offline-to-online) increases web sales but fails to boost total sales. This targeting can be even harmful and reduce consumer total spending. Our findings do not support the channel-shift mechanism, because the targeted promotions may not always lead to sales that is substituted between the online and offline purchasing channels. Rather, they support the product category-shift mechanism, where offline (but not online) channel facilitates the purchases of touch and feel tactile products and new category sales with more unplanned purchases and cross-buying. The results demonstrate the value of omnichannel promotions and highlight the conditions under which online and offline targeting is most valuable for firms to promote the other channel.

Number of Pages in PDF File: 45

Keywords: Targeting, Omnichannel, Mobile promotions, Online and Offline, E-commerce

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Date posted: December 20, 2016  

Suggested Citation

Zhang, Yuchi and Luo, Xueming and Zeng, Fue, Omnichannel Promotion Effectiveness (November 1, 2016). Robert H. Smith School Research Paper No. RHS 2884190. Available at SSRN: https://ssrn.com/abstract=2884190 or http://dx.doi.org/10.2139/ssrn.2884190

Contact Information

Yuchi Zhang
University of Maryland - Robert H. Smith School of Business ( email )
College Park, MD 20742-1815
United States
Xueming Luo (Contact Author)
Temple University ( email )
1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States
HOME PAGE: http://www.fox.temple.edu/mcm_people/xueming-luo/

Fue Zeng II
Wuhan University ( email )
Feedback to SSRN

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