Omnichannel Promotion Effectiveness

45 Pages Posted: 20 Dec 2016  

Yuchi Zhang

University of Maryland - Robert H. Smith School of Business

Xueming Luo

Temple University

Fue Zeng II

Wuhan University

Date Written: November 1, 2016

Abstract

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.

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

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

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 )

Wuhan
China

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