Adding Bricks to Clicks: Predicting the Patterns of Cross-Channel Elasticities over Time

Posted: 7 Feb 2007 Last revised: 19 Jun 2014

See all articles by Jill Avery

Jill Avery

Harvard Business School

Thomas J. Steenburgh

University of Virginia - Darden Graduate School of Business

John Deighton

Harvard Business School - Marketing Unit

Mary Caravella

University of Connecticut - Department of Marketing

Date Written: July 18, 2011

Abstract

In this paper, we propose a conceptual framework to explain whether and when the introduction of a new retail store channel helps and hurts sales in existing direct channels. A conceptual framework separates short- and long-run effects by analyzing the capabilities of a channel that help consumers accomplish their shopping goals. To test the theory, we analyze a unique data set from a high-end retailer using matching methods. We study the introduction of a retail store and find evidence of cross-channel cannibalization and synergy. The presence of a retail store decreases sales in the catalog, but not Internet channel, in the short term, but increases sales in both direct channels over time. Following the opening of the store, more first-time customers begin purchasing in the direct channels. These results suggest that adding a retail store to direct channels yields different results from adding an Internet channel to a retail store channel as previously studied.

Keywords: multichannel retailing, channels of distribution, channel management, channel migration, direct marketing, e-commerce, retail stores

JEL Classification: C51, C93, L81, M31

Suggested Citation

Avery, Jill J. and Steenburgh, Thomas J. and Deighton, John and Caravella, Mary, Adding Bricks to Clicks: Predicting the Patterns of Cross-Channel Elasticities over Time (July 18, 2011). Harvard Business School Marketing Research Paper No. 07-043. Available at SSRN: https://ssrn.com/abstract=961567

Jill J. Avery (Contact Author)

Harvard Business School ( email )

Cambridge, MA
United States
6174958084 (Phone)

Thomas J. Steenburgh

University of Virginia - Darden Graduate School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

John Deighton

Harvard Business School - Marketing Unit ( email )

Soldiers Field
Boston, MA 02163
United States

Mary Caravella

University of Connecticut - Department of Marketing ( email )

Storrs, CT 06269
United States

HOME PAGE: http://www.business.uconn.edu/cms/p461/u728/mc/r

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