Connecting Customers and Merchants Offline: Experimental Evidence From the Commercialization of Last-Mile Stations at Alibaba
39 Pages Posted: 20 Sep 2019
Date Written: July 01, 2019
Many e-commerce platforms have established extensive networks of stations as their last-mile logistics infrastructure. In this study, we investigate how this last-mile infrastructure may serve as an offline platform for commercial activities and connect customers and merchants in the physical world by leveraging the spontaneous walk-in traffic (organic interaction) and by prompting nearby customers through online intervention (induced interaction). Using free sample distribution as an example, we design two large-scale experimental studies in collaboration with Alibaba — a quasi/natural experiment across 1,032 stations and a randomized field experiment among 189,019 customers — to examine the causal effects of organic and induced interactions, respectively. We find that both organic and induced interactions significantly increase customers’ online engagement with the focal merchants (direct impact) as well as the platform (online spillover). In addition, organic interaction significantly increases customers’ usage of last-mile stations (offline spillover). We further explore the mechanism underlying the differences between these two interactions. In particular, because of the additional traveling cost on the customer side, induced interaction tends to attract customers who have a stronger preference over the focal products (as compared to those under organic interaction). Such advantageous self-selection, in turn, leads to a large increase in customers’ subsequent online engagement. Finally, we propose a customized targeting framework using instrumental forest to further enhance the effectiveness of induced interaction. In summary, our study provides concrete guidelines on how platforms can leverage organic and induced interactions at the last mile to improve customers’ online engagement with merchants and offline utilization of logistics infrastructure.
Keywords: offline platform, last-mile logistics, natural experiment, randomized field experiment, induced interaction, instrumental forest
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