Connecting Customers and Merchants Offline: Experimental Evidence From the Commercialization of Last-Mile Stations at Alibaba

This article has been accepted for publication in MIS Quarterly on behalf of the Regents of the University of Minnesota and the MIS Research Center.

58 Pages Posted: 20 Sep 2019 Last revised: 12 Sep 2022

See all articles by Brian Rongqing Han

Brian Rongqing Han

Gies College of Business, UIUC

Tianshu Sun

Cheung Kong Graduate School of Business; University of Southern California - Marshall School of Business

Leon Yang Chu

Cheung Kong Graduate School of Business

Lixia Wu

Alibaba Group

Date Written: July 1, 2019

Abstract

Many e-commerce platforms have established extensive networks of stations as their last-mile logistics infrastructure. This study investigates how this last-mile infrastructure may serve as an offline platform to connect customers and merchants in the physical world by leveraging the walk-in traffic (organic interaction) and prompting interested customers through online intervention (induced interaction). Using free sample distribution as an example, we design two large-scale studies in collaboration with Alibaba---an observational study across 1,032 stations and a randomized field experiment among 189,019 customers---to examine the causal effects of organic and induced interactions on customers' subsequent online purchases at the focal brands, respectively. We find that induced interaction drives significantly more online sales than organic interaction. Under induced interaction, the online intervention effectively increases the number of free samples distributed. Nevertheless, the larger increase in online sales for induced claimers is not simply due to more free samples distributed but because the induced customers are more interested and more likely to purchase. We identify this phenomenon as a screening mechanism that facilitates an advantageous selection of customers claiming the samples. Customers who are willing to pay the additional traveling cost and claim samples are also more likely to purchase at the focal brands afterward. Finally, we develop a customized targeting framework using the generalized random forest to enhance further the effectiveness of induced interaction at the last-mile stations. Our study raises a key insight that the “foot-in-the-door” traffic in an omnichannel environment can be fundamentally different depending on whether the offline customers are driven from the online channel.

Keywords: offline platform, last-mile, randomized field experiment, induced interaction, generalized random forest

Suggested Citation

Han, Brian Rongqing and Sun, Tianshu and Chu, Leon Yang and Wu, Lixia, Connecting Customers and Merchants Offline: Experimental Evidence From the Commercialization of Last-Mile Stations at Alibaba (July 1, 2019). This article has been accepted for publication in MIS Quarterly on behalf of the Regents of the University of Minnesota and the MIS Research Center., Available at SSRN: https://ssrn.com/abstract=3452769 or http://dx.doi.org/10.2139/ssrn.3452769

Brian Rongqing Han (Contact Author)

Gies College of Business, UIUC ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Tianshu Sun

Cheung Kong Graduate School of Business ( email )

1017, Oriental Plaza 1
No.1 Dong Chang'an Street
Beijing
China

University of Southern California - Marshall School of Business ( email )

3670 Trousdale Parkway
Bridge Hall 310B
Los Angeles, CA 90089
United States

Leon Yang Chu

Cheung Kong Graduate School of Business ( email )

Building No.5, 1&2/F
Hongqiao Wanke Center
Shanghai, 201107
China

Lixia Wu

Alibaba Group ( email )

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
466
Abstract Views
2,104
Rank
114,365
PlumX Metrics