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Omnichannel: an Overview of Multiple Channel Research and Trends for the Future
Abstract
Considered as the evolution of multichannel, the omnichannel strategy presupposes the
simultaneous management of marketing channels and integrated contact points between
clients and companies. Studies on the subject are recent, but they attract more and more
academics and retail professionals. Aiming to present the state of the research in
omnichannel, we first identify conceptual differences between multi, cross and omnichannel. Next, we highlight the research contributions made so far on four broad topics: channel integration, physical store role, supply chain management, and consumer behavior. Finally, we point out subjects to be deepened in future studies.
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Understanding how Millennial shoppers decide what to buy: digitally connected unseen journeys Structured Abstract Purpose The shopper journey can cross a number of channels leading up to the point of a possible purchase, which may be unseen by the retailer or brand for the targeted purchase. The purpose of this paper is to gain a greater understanding of the decision making and purchase intention activity for online Millennial shoppers in deciding what fashion garments to buy in the digital retail environment. The paper also investigates the use of technology and social media involvement in the shopper journey leading up to the point of purchase. Design/methodology/approach In line with other studies that investigated online shopper behaviour (Balabanis and Reynolds, 2001; Pavlou et al, 2007) we have undertaken an exploratory investigation using an online survey conducted with respondents sourced through using Survey Monkey Audience. The survey was conducted with over 580 respondents (49.7% female and 50.3% male) between 16 and 34 years old living in England. Findings The findings highlight a picture of shoppers going on very different shopper journeys with different lengths, influenced by different touch points and using different media and devices. Each customer has their own individual experience and expectation. They can move through extremely diverse, long and complicated journeys in the buying process before they purchase a product. Most striking is their willingness to reach out and be influenced by other people beyond the control of any retailer-using platforms that are not necessarily specifically related with any retailer. Shoppers can undertake numerous activities before they make their final purchase decision, seeking content from different retailers, asking for social validation of their decision from their social networks both online and offline which is often out of sight of the retailer or brand. Practical implications The findings show how retailers and brands can understand the shopper decision journey and their behaviours across all the devices and channels that are used. Moreover, for some or part of the digital journey the shopper can often be unseen by the retailer or brand. Originality/value Consumers actively seek out novelty, knowledge and inspiration but shoppers employ a variety of interactions over a much greater period of time to arrive at the moment of purchase. This research provides an insight into the range of complex views and positions held by each individual to get a much more complete picture of where shoppers are looking to buy and what are their interests.
La omnicanalidad es una de las revoluciones más importantes en los últimos años en el comercio minorista, afectando a una variedad de áreas como el marketing, el comercio, la comunicación o los sistemas de información. El marketing omnicanal hace referencia a la estrategia de marca que integra todos los canales disponibles para crear una experiencia de compra sin fisuras que aumenta la conveniencia y el compromiso del cliente durante el proceso de compra. El objetivo de este estudio es proporcionar una visión general del estado del arte de este fenómeno con una cuádruple contribución. Primero, reduce la confusión del término omnicanal, demarcando claramente los conceptos multi-, cross y omnicanalidad. Segundo, ofrece una visión general de la actual experiencia del consumidor en un entorno omnicanal. Tercero, se presentan nuevas líneas de investigación relacionadas con el marketing omnicanal. Finalmente, se discuten las implicaciones teóricas y de gestión de este tema de actualidad.
Purpose
The purpose of this paper is to investigate the effects of multichannel integration (MCI) on customer loyalty. The specific objectives are to provide an appropriate reliable measure of the construct, and to analyse the impact of MCI on offline and online loyalty, both directly and by mediation of customer satisfaction.
Design/methodology/approach
The paper focusses on the retail apparel sector of Spain and the UK. The authors applied a scale development process and tested the model with data of 761 multichannel apparel shoppers. The proposed theoretical model was estimated through EQS 6.1 and a mediation test was calculated.
Findings
The findings show, first, that the construct of channel integration has two dimensions: reciprocity, which refers to the possibility of crossing the channels while shopping, and coordination, which refers to the alignment of offline and online offers. Second, that MCI affects positively both offline and online loyalty both directly and through satisfaction, which partially mediates the relationship.
Research limitations/implications
Culture might play a moderating role in the relationships found that are not analysed.
Practical implications
The findings have implications for the managers of multichannel retail companies as they help to understand the benefits of channel integration in creating a loyal customer base both online and offline.
Originality/value
This paper contributes to the literature on multichannel retailing in two main ways: first, by developing a scale to measure MCI, and second, by demonstrating that MCI has strong effects on customer satisfaction and loyalty.
The paper examines the opportunities in and possibilities arising from big data in retailing, particularly along five major data dimensions—data pertaining to customers, products, time, (geo-spatial) location and channel. Much of the increase in data quality and application possibilities comes from a mix of new data sources, a smart application of statistical tools and domain knowledge combined with theoretical insights. The importance of theory in guiding any systematic search for answers to retailing questions, as well as for streamlining analysis remains undiminished, even as the role of big data and predictive analytics in retailing is set to rise in importance, aided by newer sources of data and large-scale correlational techniques. The Statistical issues discussed include a particular focus on the relevance and uses of Bayesian analysis techniques (data borrowing, updating, augmentation and hierarchical modeling), predictive analytics using big data and a field experiment, all in a retailing context. Finally, the ethical and privacy issues that may arise from the use of big data in retailing are also highlighted.
Retailers have embraced a variety of technologies to engage their customers. This article focuses on " The Future of Retailing " by highlighting five key areas that are moving the field forward: (1) technology and tools to facilitate decision making, (2) visual display and merchandise offer decisions, (3) consumption and engagement, (4) big data collection and usage, and (5) analytics and profitability. We also suggest numerous issues that are deserving of additional inquiry, as well as introduce important areas of emerging applicability: the internet of things, virtual reality, augmented reality, artificial intelligence, robots, drones, and driverless vehicles.
The Internet of Things (IoT) market is set to grow rapidly. Although IoT offers new opportunities, it nevertheless raises challenges. The objective of this research is to develop a better understanding of the reasons underlying consumer resistance to smart and connected products. To this end, a quantitative survey was carried out to understand resistance to smartwatch. Structural equation modelling was used to test the conceptual model. The findings show that perceived uselessness, perceived price, intrusiveness, perceived novelty and self-efficacy have an impact on consumer resistance to smart products. Moreover, privacy concerns have an effect on intrusiveness and dependence impacts privacy concerns. To our best knowledge, this is the first research studying smart products through a resistance approach.
The advance of the Internet and new technologies over the last decade has transformed the retailing panorama. More and more channels are emerging, causing consumers to change their habits and shopping behavior. An omnichannel strategy is a form of retailing that, by enabling real interaction, allows customers to shop across channels anywhere and at any time, thereby providing them with a unique, complete, and seamless shopping experience that breaks down the barriers between channels. This paper aims to identify the factors that influence omnichannel consumers' behavior through their acceptance of and intention to use new technologies during the shopping process. To this end, an original model was developed to explain omnichannel shopping behavior based on the variables used in the UTAUT2 model and two additional factors: personal innovativeness and perceived security. The model was tested with a sample of 628 Spanish customers of the store Zara who had used at least two channels during their most recent shopping journey. The results indicate that the key determinants of purchase intention in an omnichannel context are, in order of importance: personal innovativeness, effort expectancy, and performance expectancy. The theoretical and managerial implications are discussed.
The evolution of technology and the constant digitalisation strongly influence how consumers behave, how markets develop, and how companies and consumers interact. By offering many channels, companies attempt to react to these developments. In recent years, researchers as well as practitioners have proposed omnichannel management as the best approach to offer several channels. An omnichannel strategy enables consumers to use channels seamlessly and interchangeably and experience the channels uniquely. However, reality looks different: many channel management approaches coexist in practice, and in research, terms to describe different concepts are used without clear distinctions. This paper seeks to eliminate ambiguities regarding the term omnichannel management. By delimiting the term from related approaches and understanding current topics discussed by omnichannel management research, this paper creates a common basis from which to fully understand the concept. Omnichannel management has shown relevance in many areas, but particularly in retailing, marketing, and information systems (IS) research. IS plays an important role in the implementation of the omnichannel approach because obstacles are often technology-related and companies are strongly dependent on information technology (IT). To move research on omnichannel management forward, this paper proposes directions for further research.
We study the effects of the introduction of cross-channel functionalities on the overall sales dispersion of retailers and the implications of these effects for inventory management. To do that, we analyze data from a leading U.S. retailer who introduced a “ship-to-store” (STS) functionality that allows customers to ship products to their local store free of charge when those products are not available in their local store. Based on the fact that stores prioritize carrying products for which local demand is high, we test the hypothesis that introducing the STS functionality increased the retailer’s overall sales dispersion. We find that, on average, the contribution of the 90% lowest-selling products to total sales increased by 0.75 percentage points, increasing sales dispersion. Calibrating conventional inventory-ordering models, we show that to respond optimally to the observed increase in dispersion, the retailer would need to increase its cycle and safety inventories by approximately 2.7%. Our paper points out the effect of an increasingly important retail phenomenon (channel integration) on a key factor for inventory management (sales dispersion).
This paper was accepted by Vishal Gaur, operations management.
Information technology (IT) has changed the dynamics of competition in the U.S. economy. Firms are gaining competitive advantage by competing on technology-enabled processes. For the retail industry, technology is breaking down the barriers between different retail channels and is making omnichannel retailing inevitable—an integrated sales experience that melds touch-and-feel information in the physical world with online content. Omnichannel retailing is becoming a trend and critical for retailers’ success. To keep up with the pace of change, existing retailers will need to create an omnichannel strategy and develop more omnichannel innovations. Based on the theories of the resource-based view (RBV), IT business value, and competitive dynamics, this study examines the factors that affect cross-channel capabilities and managerial actions in the U.S. apparel industry. We collected a longitudinal dataset on public apparel companies from 1995 to 2007. The empirical results reveal that both the quantity and scope of investments in enterprise IT applications were positively related to cross-channel capabilities. Financial resources positively moderated the relationship between enterprise IT applications and cross-channel capabilities. We found that enterprise IT applications increased the frequency and broadened the types of managerial actions. We found that cross-channel capabilities had mixed effects on managerial actions. Whereas market-oriented capabilities such as e-commerce and multi-channel cross-selling capabilities broadened the types of managerial actions, operation-oriented capabilities, such as cross-channel fulfillment, narrow the range of a firm’s managerial actions. Our findings provide important implications for managers in apparel and other retail sectors.
The growing importance of online sales means that traditional bricks-and-mortar retailers need to create new distribution systems to serve customers through multiple channels. Building an effective and efficient omni-channel (OC) distribution system, however, leads to multiple challenges. The questions arise for example, from where online orders should be fulfilled, how delivery and return processes can be organized, and which context-specific OC distribution systems exist. Answering these questions retail research and practice require an overall view of the distribution concepts for direct-to-customer and store deliveries in OC retailing, including the associated return processes. This overall picture is still missing in the literature. We conducted an exploratory study to close this observable gap in the literature. This exploratory study is based on semi-structured interviews with major OC retailers in German-speaking countries and was complemented by market data research and discussions with further experts in the field of OC retailing. Based on the results of the study, the forward distribution system in OC retailing is characterized by the sources (supplier DCs, retailer DCs, stores) and destinations (home, store) which describe the options for store delivery, home delivery, and store pickup. Return processes are likewise characterized by the sources (store, home) and destinations (store, DC, return center). This framework forms the foundation for analyzing contextual criteria, identifying when the different conceptual designs are applied, determining industry-specific characteristics, and illustrating ways to further advance OC retailing. The present paper, therefore, contributes to the literature in three main areas: (1) it identifies and systematizes the forward and backward concepts in OC retailing, (2) it reveals application and development areas for achieving excellence in OC fulfillment and logistics, and (3) shows the need for developing sector- and context-specific OC distribution systems.
Purpose
The purpose of this research is two-fold: (1) to investigate the challenges e-tailers are confronted with when synchronizing clicks with bricks into an omni-channel perspective and (2) to shed light on the possible ways to overcome these challenges in order to successfully implement an omni-channel strategy.
Design/methodology/approach
To answer our research questions, we draw on an in-depth longitudinal case study conducted within the French on-line eyewear retailer Direct Optic from January 2013 to March 2015. From an ethnographic perspective, we document the evolution of the retailing company’s decisions and processes as they moved towards defining and implementing an omni-channel strategy. Research was carried out using primary (1500+ hours of participant observation and 118 interviews) and secondary data sources. A conceptualizing content analysis was conducted both manually and with NVivo software.
Findings
First, our results show that the challenges faced in shifting to omni-channel strategy are so numerous and so engaging that, de facto, it is impossible to evolve directly from a multi-channel, siloed strategy to an omni-channel strategy without any transition. Second, throughout this transformative process, our result show that the challenges faced by the company evolved gradually in terms of scope and priority, and can be categorized into two main categories: the strategy-related challenges (organizational, cultural, managerial, marketing and resources) which were the highest priority in the first stage and the development-related challenges (retailing mix, information systems and CRM) which became the highest priority during the second stage.
Research limitations/implications
We emphasize the importance of carefully orchestrating how strategy-related and development-related challenges are addressed as, for retailers engaged in going omni-channel, this involves a complete transformation of their configuration.
Originality/value
Our study contributes to channel management and retailing research by (1) deepening the conceptualization of multi-, cross- and omni-channel retailing, (2) exploring the nature, importance and sequence of the strategy-related challenges and development-related challenges when shifting to an omni-channel strategy, and (3) providing insights into how successfully navigating the transformative process to be omni-channel requires investigating different possible solutions, and further testing and re-testing them, before deploying the appropriate ones. Up to our knowledge, it is one of the first studies to empirically investigate the challenges of an e-tailer when moving towards an omni-channel strategy.
Business experts have enthusiastically projected a seamless, retail world where customers can shop across channels, anywhere and at any time. This type of multiple channel retailing is often referred to as Omni-Channel Retailing. Within academia, by contrast, there have been proportionately fewer attempts to systematically categorize the diversity of multiple channel retailing that currently exists. Hence, the concepts Multi-, Cross-, and Omni-Channel are used indistinctly. This article proposes a categorization of Multi-, Cross-, and Omni-Channel Retailing for retailers and retailing by means of a literature review, a taxonomy of multiple channel retailing, a literature classification table, and by way of illustration, a mobile Click and Collect shop.
Although cross-channel retailing has become a game changer for retailers, few previous studies have looked at the problems from the inherently holistic perspective of a business model approach. Using a single case study but multiple data collection methods, including interviews, observations, and document analysis, on the biggest Chinese retailer in consumer electronic appliances, the present study examines how different aspects of the business model changed after the retailer launched its cross-channel strategy. The results identify the major changes on three fronts: redefinition of target clients, a new proposition for shopping value, and redesign of the value chain. Findings suggest that a retailer shifting toward the cross-channel strategy will follow the stage-of-adoption model, which may be in five stages, and that the physical store as a hub linking different channels will become the source of value creation. To facilitate the strategic shift, retailers should optimize rather than merge their activities across channels, reinforce the strengths of the physical store, develop co-creation value with stakeholders, and revamp their organization.
Mobile shopping (M-shopping) has become increasingly important in marketing and retailing. Using a unique dataset from an Internet-based grocery retailer, we evaluate changes in customers’ spending behavior upon adopting M-shopping, i.e., using smartphones or tablets to compose, modify, or place orders online. We find that order rate, i.e., number of orders placed per year, increases as customers adopt M-shopping. Especially for low-spending customers, both their order rate and order size, i.e., the amount of the order in dollars, increase as they become accustomed to M-shopping. In addition to the effect on customer's spending behavior, we also find that M-shoppers tend to use mobile devices to shop for habitual products that they already have a history of purchasing. We propose that customers utilize mobile devices because the technology provides convenient access, which leads them to incorporate M-shopping into their habitual routines. Managerially, we recommend that firms should fully leverage their mobile platforms, but they should also keep in mind that mobile devices may not be the most optimal channel for launching new products or promoting products that require more consideration during the buying process.
The increased popularity of social networking sites, such as Linkedln, Facebook, and Twitter, has opened opportunities for new business models for electronic commerce, often referred to as social commerce. Social commerce involves using Web 2.0 social media technologies and infrastructure to support online interactions and user contributions to assist in the acquisition of products and services. Social media technologies not only provide a new platform for entrepreneurs to innovate but also raise a variety of new issues for e-commerce researchers that require the development of new theories. This could become one of the most challenging research arenas in the coming decade. The purpose of this introduction is to present a framework that integrates several elements in social commerce research and to summarize the papers included in this special issue. The framework includes six key elements for classifying social commerce research: research theme, social media, commercial activities, underlying theories, outcomes, and research methods. The proposed framework is valuable in defining the scope and identifying potential research issues in social commerce. We also explain how the papers included in this special issue fit into the proposed research framework.
Multichannel customer management is the design, deployment, coordination, and evaluation of channels through which firms and customers interact, with the goal of enhancing customer value through effective customer acquisition, retention, and development. The authors identify five major challenges practitioners must address to manage the multichannel environment more effectively: (a) data integration, (b) understanding consumer behavior, (c) channel evaluation, (d) allocation of resources across channels, and (e) coordination of channel strategies. The authors also propose a framework that shows the linkages among these challenges and provides a means to conceptualize the field of multichannel customer management. A review of academic research reveals that this field has experienced significant research growth, but the growth has not been distributed evenly across the five major challenges. The authors discuss what has been learned to date and identify emerging generalizations as appropriate. They conclude with a summary of where the research-generated knowledge base stands on several issues pertaining to the five challenges.
In an effort to build long-term, profitable relationships, many companies systematically engage in multichannel relational communication-personalized messages sent to existing customers through various channels as part of a broader relationship marketing strategy. In this research, the authors examine three key drivers of relational communication effectiveness: volume of communication, mix of communication channels, and alignment of those channels with customers' preferences. They hypothesize that customer response to relational communication follows a continuum in which reciprocity explains response to lower levels of communication, the classic ideal point describes a transition phase, and reactance explains response to higher levels of communication. They empirically test the theoretical framework by examining the impact of multichannel communication on repurchase over a threeyear period. The results indicate that after the ideal level of communication is exceeded, customers react negatively. This negative response can be exacerbated by the use of multiple channels but attenuated by aligning channels with customer preferences. The findings suggest that the complex effects of multichannel communication can actually drive customers away from rather than closer to a company.
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.
This study examines how customer lifetime value (CLV) can be computed at individual customer level in a retail setting to maximize profitability. The study finds that maximum positive impact to CLV occurs when the customer cross-purchases, shows multi-channel shopping behavior, stays longer with the firm, buys specific product categories and purchases more frequently with the firm. Interestingly, the CLV follows an inverted U relationship with increase in return of prior purchases. Other interesting findings include a surprisingly low correlation between customer loyalty and future profitability and low correlation between stores’ historic revenues and future profitability. Several implications are suggested for retailers to manage and maximize customer profitability as well as store profitability.
Retailers are dynamic in nature, and their strategies keep evolving with changing scenarios and availability of new technologies. In the current scenario, there is a need for a comprehensive and organizing framework for retailers to develop and implement a complex set of strategies. In this article, we broadly categorize retailers’ implementation of strategies at four levels—market, firm, store and customer. The four-level categorization has been done using a triangulation approach consisting of inferences from previous literature, interviews with practitioners, and reviewing popular press. In the future, retailers will expand to even more countries, and there will be plenty of scope for using advanced technologies and big data. This organizing framework accommodates for any such changes as well as guides retailers about ways of increasing profitability in the future. In this article, we also provide generalized expectations of strategies under each level which not only can be used by researchers as a direction of future research but also by practitioners to understand and implement their strategies in an effective and efficient way.
Recent advances in information technologies (IT) have powered the merger of online and offline retail channels into one single platform. Modern consumers frequently switch between online and offline channels when they navigate through various stages of the decision journey, motivating multichannel sellers to develop omnichannel strategies that optimize their overall profit. This study examines consumers' cross-channel search behavior of "pseudo-showrooming," or the consumer behavior of inspecting one product at a seller's physical store before buying a related but different product at the same seller's online store, and investigates how such consumer behavior allows a multichannel seller to achieve better coordination between its online and offline arms through optimal product placement strategies. We develop a stylized model in which a multichannel firm offers a product line consisting of two horizontally differentiated products. Consumers are uncertain about the true value of either product. A consumer's uncertainty regarding a particular product's value is fully resolved after inspecting that product in person, and can also be partially resolved after inspecting the other related product. By selling only one product through the dual channel and the other product through the online channel exclusively, the firm induces consumer pseudoshowrooming for the online exclusive product. Our analysis shows that this product placement strategy generates a greater profit than selling both products through the dual channel, if the fit probability of individual products and consumers' cost for returning a misfit product are both in the intermediate range. Moreover, we find that over a large parameter region, consumers also enjoy a greater total surplus under the firm's product placement strategy that induces consumer pseudo-showrooming. Furthermore, we find that the firm garners the most benefit from inducing consumer pseudo-showrooming by selling the higher-quality product or the higher-demand product through the online channel exclusively. Collectively, our study offers a compelling demand-side justification of the commonly witnessed practice among multichannel sellers to offer products online exclusively when offline selling is feasible.
With the rapid diffusion of smart devices, retailers provide new forms of interactive communication channels, enabling their consumers to access through the mobile channel. The retailers recognize the importance of the mobile channel as an efficient sales channel and as a tool for CRM (Customer Relationship Management). However, CRM has become increasingly complex after adopting it to the mobile channel. It is imperative for retailers to understand consumer behavior in an omni-channel circumstance. Using the four-year transaction data obtained from the online home-shopping provider that expanded its online service (telephone, ARS, Internet website) onto a mobile platform, this research analyzes the consumer channel choice behavior in the perspectives of consumer sociodemographic information, consumer behavior, and corporate communication strategies. To explain channel choices in the omni-channel environment, we use multivariate probit model with sociodemographic variables, communication strategies, order hour, and product categories. Our empirical results indicate that age and gender have significant influences on channel choice behavior. Consumer fixates their inflow channel. Communication strategies such as SMS and app push alarm significantly influence consumer channel choice. Consumers using mobile channel are making purchases without time constraints, while others not. We observed that products that have characteristics of experience goods or credence goods tend to be purchased via mobile and Internet channels that provide detailed and additive information like consumer reviews. Finally, the results revealed substitution effect between most of the channels, except for the Internet and telephone. Our investigation contributes to omni-channel online shopping literature by empirically testing the choice behavior, cross-channel effects, and also by providing insights for online retailers.
Purpose
The purpose of this paper is to investigate the impact of logistics service quality (LSQ) on consumer satisfaction and loyalty in an omni-channel retail environment.
Design/methodology/approach
An empirical, survey-based approach is used to collect data from consumers about experiences with two different omni-channel retail scenarios: buy-online-pickup-in-store (BOPS), and buy-in-store-ship-direct (BSSD). Participants responded to questions regarding the LSQ, consumer satisfaction, and consumer loyalty relative to their actual experience in one of these situations.
Findings
Results suggest that omni-channel consumers are truly unique, and all three dimensions of LSQ (condition, availability, and timeliness) are distinct in their impact on satisfaction and loyalty. Results suggest that in the BOPS sample, consumer satisfaction partially mediates the relationship between condition and loyalty and fully mediates the relationship between timeliness and loyalty. In the BSSD model, consumer satisfaction partially mediates the relationship between timeliness and consumer loyalty.
Research limitations/implications
This research studies LSQ in two different omni-channel scenarios; additional research is needed to explore other omni-channel scenarios and extend the findings to be more generalizable.
Practical implications
Managers should recognize that for omni-channel consumers, timeliness is the essential driver of satisfaction and loyalty. Retailers need to account for this reality and dedicate substantial resources to meet delivery requirements in a timely manner. Logistics service providers need to emphasize speed and reliability of their delivery processes for omni-channel consumers.
Originality/value
This research is the first attempt at conceptualizing LSQ in an omni-channel supply chain, and testing the impact of LSQ on consumer satisfaction and loyalty.
Do mobile apps influence shopper purchases and product returns? We model the effects of app adoption in the context of a large omnichannel retailer with 32 million shoppers. We leverage the launch of a mobile app by the retailer and use a difference-in-differences approach to identify and estimate the differences between app adopters and non-adopters in shopping outcomes, such as the incidence and monetary value of purchases and product returns. We find that app adopters buy 21% more often but spend 12% less per purchase occasion and return 73% more often than non-adopters in the month after adoption. Overall, app adoption results in a 24% increase in net monetary value of purchases. Our findings are robust to alternative explanations and measures. Furthermore, our analysis of the drivers of app use reveals that exposure to offers and rewards through the app plays a key role in driving shopping outcomes. Surprisingly, the number of unique app features accessed by the shopper has an inverted U-shaped relationship with shopping outcomes, suggesting managerial caution against “all-in-one” app designs.
The increase in the variety of channel formats, and the progression from single, to multi-, then to omni-channel marketing has made shopping and buying more convenient for consumers, but trickier to manage for marketers—both upstream suppliers and downstream retailers. The first step in managing multi- and omni-channel distribution is to find the specific metrics that will facilitate reliable analysis of the relationship between distribution and marketing objectives. That is our primary goal in this article—to present the metrics, both old and new, that marketers, both suppliers and retailers, need to monitor, and that academic researchers, both theoretical and empirical, should incorporate in their models. We present a basic framework for managing distribution, and summarize the metrics that are relevant to each element of the framework. Then, we lay out what we believe are important questions that multi- and omni-channel marketers are grappling with, refer the reader to what existing academic research has to say about them, and suggest how future research can build off our framework and metrics to supplement what is known and address what is not.
In the past, consumers used to go to brick-and-mortar stores to gather information and often concluded their shopping there, with the physical store probably being one of their few sources of product information. Nowadays, with the arrival of digital devices, the number of sources of information has grown. Consumers tend to combine these with brick-and-mortar establishments both to search and buy, leading to the emergence of omnichannel behavior. In this context, there is a lack of research which considers online and mobile devices separately. The aim of the present study is to analyze how two individual traits –impulsiveness and need for touch– influence the use of each device in the omnichannel decision-making process. Results from a sample of 284 real digital (online and/or mobile) shoppers of clothes confirm that personal traits influence omnichannel consumer behavior. Results show that impulsive shoppers make greater use of mobile devices whereas individuals with high need for touch are more predisposed to use online devices in their omnichannel process. Besides, the effect of individual demographics is taken into account. Finally, we discuss the paper's contributions and outline the actions which managers can engage in so as to succeed in omnichannel retail.
E-commerce has important advantages compared to traditional shopping (e.g. time, choice, price) but offers only a partial view of the shopping environment. For example, the lack of physical apprehension is a major disadvantage of online purchasing. To create a shopping environment close to reality, some companies now propose Virtual Fitting Rooms (VFR. ¹ . 1VFR: Virtual Fitting Room.PSC: Perceptual Specific Curiosity.) on their websites. This research aims to highlight the effects of an online VFR on consumer's exploratory behavior and intention to purchase, both online and offline contexts. Results of two experiments showed that the presence of such a tool significantly increases specific curiosity about the product, intention to patronize (online and offline) and intention to purchase (online and offline). The latter effect is mediated through firstly perceptual specific curiosity about the product and then the intention to patronize.
Internet of things (IoT) is a novel paradigm that aims to bridge the digital world with the real world. With the rapid advancements in Internet and communication technology, we are witnessing the dawn of a new era of the IoT in various industries. The retail industry is at the forefront in embracing the IoT, which is expected to change the way customers experience shopping. Drawing on the service-dominant logic, this study proposes that customer interaction with IoT retail technology results in value co-creation. Responses are collected from 289 users of IoT technology in the retail setting. Results of partial least square (PLS) structural equation modelling reveals that ease of use, superior functionality, aesthetic appeal and presence are key determinants of value co-creation for IoT retail technology. Results also show that value co-creation influences customers’ continuance intentions and word-of-mouth intentions. The findings of this study have key implications for retailers in delivering superior customer experience. The limitations and future research directions are discussed.
http://www.tandfonline.com/eprint/2CikxEskrXVEjnQ3XAph/full
Purpose – Our aim is to investigate the topic of multi-channel retailing. Specifically, our research intends to determine if and to what extent the opening of physical stores by a former web-only retailer reduces or extends overall retail sales, and whether such effects tend to change over time. Empirical analysis focuses on data elaboration from a retailer who has passed from the initial mono-channel model (pure online), to a multi-channel one with the opening of stores.
Design/methodology/approach - Through the analysis of an internal dataset of a leading consumer electronics retailer applying Probit and Logit estimation techniques, we extract information about actual customers’ purchases (or rather retail sales) in three newly-opened stores and about online purchases (through an e-commerce website managed by the same retailer with the same store brand) by people living in the new store service areas before and after the openings.
Findings - The paper shows that, for the single customer, the probability of purchasing online is reduced by the store opening in the short-term, but tends to increase in the long-term. Besides, results indicate that long-term synergy between the two channels depends mainly on indirect influence due to the mere presence of the store brand in the area rather than on the direct experience of shopping in the store.
Research implications - The study highlights that channel portfolio enlargement from mono to multi-channel retailing tends to activate a sort of life cycle; while in the early phase of store addition web sales tend to be cannibalized because the two channels are perceived as “substitutes” for each other, in the long run migration turns into a synergy effect; different channels tend to interact with and reinforce each other as customer touch points of the same retailer, in an omni-channel perspective.
Originality/value - The paper herein presents various original elements concerning types of available data (actual sales rather than consumers’ intentions/perceptions and individual level data rather than aggregate level ones), estimation technique used (binary choice model) and research hypotheses (distinguishing between “direct” and “indirect” synergy effects in multi-channel retailing).
Over the past 15 years, digital media platforms have revolutionized marketing, offering new ways to reach, inform, engage, sell to, learn about, and provide service to customers. As a means of taking stock of academic work’s ability to contribute to this revolution, this article tracks the changes in scholarly researchers’ perspectives on three major digital, social media, and mobile (DSMM) marketing themes from 2000 to 2015. The authors first use keyword counts from the premier general marketing journals to gain a macro-level view of the shifting importance of various DSMM topics since 2000. They then identify key themes emerging in five-year time frames during this period: (1) DSMM as a facilitator of individual expression, (2) DSMM as decision support tool, and (3) DSMM as a market intelligence source. In both academic research to date and corresponding practitioner discussion, there is much to appreciate. However, there are also several shortcomings of extant research that have limited its rel...
Many retailers have recently started to offer customers the option to buy online and pick up in store (BOPS). We study the impact of the BOPS initiative on store operations. We build a stylized model where a retailer operates both online and offline channels. Customers strategically make channel choices. The BOPS option affects customer choice in two ways: by providing real-time information about inventory availability and by reducing the hassle cost of shopping. We obtain three findings. First, not all products are well suited for in-store pickup; specifically, it may not be profitable to implement BOPS on products that sell well in stores. Second, BOPS enables retailers to reach new customers, but for existing customers, the shift from online fulfillment to store fulfillment may decrease profit margins when the latter is less cost effective. Finally, in a decentralized retail system where store and online channels are managed separately, BOPS revenue can be shared across channels to alleviate incentive conflicts; it is rarely efficient to allocate all the revenue to a single channel.
This paper was accepted by Vishal Gaur, operations management.
Purpose – Online retailing changes all retail systems significantly. The growing importance of online
sales requires the creation of new fulfillment models. The purpose of this paper is to investigate how
retailers develop from separate multi-channel (MC) to integrated omni-channel (OC) fulfillment.
OC retailing has an integrated perspective, with seamless interactions between online and bricks-andmortar
channels.
Design/methodology/approach – More than 60 internationally active retailers and experts from
Germany participated in an exploratory survey. With a response rate of 40 percent the authors
achieved the goal to adequately depict the German MC and OC retail market. It is currently the largest
empirical study of MC and OC fulfillment.
Findings – It is the first study to comprehensively analyze the logistical development options open to
retailers for integrated fulfillment. The authors discuss the conceptual development options and
formulate propositions for an advanced OC fulfillment approach. OC retailers aim to pool their
organizational units for fulfillment via different channels. Retailers with multiple channels develop
their warehouse systems toward channel-integrated inventory enabling flexible and demand-driven
inventory allocation. Retailers with channel-integrated inventory also organize their picking
procedures in one common zone. The higher the outlet density, the more it becomes beneficial for
retailers to introduce pick-up services.
Research limitations/implications – The research is based on insights from retailers and experts
from companies based in Germany.
Practical implications – The findings provide an insight into designing OC fulfillment and
distribution structures. The concepts themselves, archetypes, challenges and development paths are
analyzed. Identified logistics levers can be adjusted to pinpoint the steps required to advance
integration.
Originality/value – The authors contribute by deriving propositions and a framework for
transitioning from basic MC to integrated, extended OC logistics. Because this research area is still
comparatively young, the authors take a more comprehensive, exploratory view of OC fulfillment.
Keywords Multi-channel, Omni-channel, Fulfilment, Retail logistics, Warehouse operations
Purpose
– With the rapid growth of consumer sales being fulfilled through omni-channel retailing, the purpose of this paper is to explore the subsequent impact on the levels of consumer retail returns experienced through online sales and the emergent returns management strategies being affected by retailers in relation to network configuration and returns management processes.
Design/methodology/approach
– The authors uses a mixed methods approach from an interpretive perspective. It is appropriate to describe the approach in terms of convergent design, since the authors have collected both qualitative and quantitative data.
Findings
– Return rates for online retailing can be double those for stores, while return levels for “considered purchases” remain similar. The findings suggest that omni-channel returns management has yet to fully mature and the authors find challenges for network design and returns processes in offering a seamless solution.
Research limitations/implications
– For practitioners the authors identify a number of challenges and offer insights to improve performance in returns management process, while for academic colleagues the authors propose a number of avenues for further research both in the qualitative and quantitative fields.
Originality/value
– While a significant body of extant literature exists, in researching the generalized retail returns management process this paper make a contribution by addressing the emergent managerial implications of omni-channel retail returns.
The authors provide a critical examination of marketing analytics methods by tracing their historical development, examining their applications to structured and unstructured data generated within or external to a firm, and reviewing their potential to support marketing decisions. The authors identify directions for new analytical research methods, addressing (1) analytics for optimizingmarketing-mix spending in a data-rich environment, (2) analytics for personalization, and (3) analytics in the context of customers' privacy and data security. They review the implications for organizations that intend to implement big data analytics. Finally, turning to the future, the authors identify trends that will shape marketing analytics as a discipline as well as marketing analytics education.
The intersection of mobile marketing and shopper marketing, known as mobile shopper marketing, is a rapidly evolving area. We formally define mobile shopper marketing as the planning and execution of all mobile-based marketing activities that influence a shopper along and beyond the path-to-purchase: from the initial shopping trigger, to the purchase, consumption, repurchase, and recommendation stages. However, not much is known about mobile shopper marketing. We plug this gap by first discussing mobile shopper marketing and its scope in depth and then presenting a process model that connects the mobile shopping journey with four key entities, i.e., shopper, employee, organization, and mobile technology. For each of these themes, we identify the challenges that offer future research opportunities.
Published research examining differences in consumer willingness to pay for products at omnichannel and pure-play online retailers is based on non-durable, search products and is equivocal; prices at pure-play online retailers are not always lower. This research examines differences in consumer willingness to pay for online purchases of functional and expressive products that differ in the length of product life, i.e. durable and nondurables at omnichannel versus pure play online retailers. Empirical analysis of consumer-centric, multi-site clickstream data of prices paid show that consumers are willing to pay higher prices for home goods products at omnichannel retailers compared to pure-play online retailers but differ for functional and expressive products. Implications are drawn to assist both omnichannel and PPO retailers in their pricing strategies.
The growing number of sales channels through which customers can make purchases has made it imperative for managers to understand how customers decide which channels to use. However, this presents a significant challenge because there is reason to believe the channel decision process evolves over the lifetime of the customer. The authors document the existence and nature of this phenomenon by analyzing the evolution of a customer's channel choice decision process from a trial stage to a posttrial stage. First, they analyze data for a book retailer and replicate their analysis using data from a durables and apparel retailer. Their results suggest that (1) customers' decision processes do evolve, (2) a minority but sizeable segment changes decision processes within the observation period, and (3) customers who change do so from a decision process in which they are highly responsive to marketing to one in which they are less responsive. The authors illustrate and discuss the implications for both managers and researchers.
Purpose
– The purpose of this paper is to identify the realignment of the physical distribution process for store-based retailers in their efforts to integrate the online channel into their business model. Multiple attributes of the physical distribution process are evaluated to identify associations with order fulfillment methods adopted by omni-channel retailers.
Design/methodology/approach
– A multi-method approach is used which includes qualitative evaluation of 50 interviews of supply chain executives from large retailers. Additionally, secondary data about firm size, store and distribution networks, online sales, distribution configuration, and order delivery options are used. The findings of qualitative analysis are incorporated into a quantitative classification-tree analysis to identify associations among distribution attributes, order fulfillment methods and order delivery services.
Findings
– Retailers are developing a consistent omni-channel physical distribution process in which stores undertake a bigger role in order fulfillment and delivery. Level of online sales, size of distribution network, number of sales associates at a store, and number of years engaged in the online channel are identified as having strong associations with the type of order fulfillment method used by omni-channel retailers. The study finds that retailers are focussed on integrating their store and DC inventories and have the benefit of scale with a large store network.
Practical implications
– Retailers are reconfiguring their physical distribution processes in the complex omni-channel environment can use the findings of this study to evaluate their strategy and identify the level of realignment effort that is needed. A better understanding of the requirements of physical distribution in an omni-channel setting will guide retailers in developing requisite operational capabilities.
Originality/value
– This paper provides a first in-depth look at order fulfillment choices in omni-channel retail and identifies efforts that are underway to realign key elements of the physical distribution process.
Marketing channels are among the most important elements of any value chain. This is because the bulk of a nation’s manufacturing output flows through them. The intermediaries (e.g., distributors, wholesalers, retailers) constituting marketing channels perform specific distribution functions, such as transportation, storage, sales, financing, and relationship building, better than most manufacturers. Over his distinguished career, Louis P. Bucklin investigated many questions about the structuring and functioning of marketing channels using conceptual, empirical, and microeconomics model-based methodologies. Today, the academic marketing literature contains hundreds of articles that have employed these three broad classes of methodologies to investigate issues of channel intermediaries’ interorganizational relationships, e.g., power-dependence, relational outcomes, conflict and negotiations, and manufacturing firms’ channel strategy, e.g., channel structure, selection, coordination and control. So far, however, there has been no review of how the three different methodologies have contributed to advancing knowledge across this set of channels research domains. This paper is the first that aims to (1) chart how channels research employing each of the three classes of methodologies – conceptual, empirical, microeconomics model-based – has evolved since the late 1950s along with current trends; (2) review the contributions and shortcomings of research to date using these methodologies; and (3) suggest future research opportunities using these methodologies, separately or in an integrated fashion.
The increased deployment of new technologies such as smart mobile devices and social networks and the growing importance of in-store technological solutions create new opportunities and challenges for retailers. As the line between online and physical channels is blurred, a new approach to channel integration is emerging - the omnichannel, which aims to deliver a seamless customer experience regardless of the channel. This introduction presents the results of focus group discussions on the role of information technology in retail, new business models, and the future role of traditional stores as e-commerce advances. Key issues that emerged from the discussion include the need for channel integration, the impact of mobile technologies, the growing role of social media, the changing role of physical brick-and-mortar stores, the need to respond to diverse customer requirements, the balance between personalization and privacy, and, finally, supply chain redesign. The four papers in this Special Issue explore these themes further.
A crucial decision firms face today is which channels they should make available to customers for transactions. We assess the revenue impact of adding bricks-and-mortar stores to a firm's already existing repertoire of catalog and Internet channels. We decompose the revenue impact into customer acquisition, frequency of orders, returns, and exchanges, and size of orders, returns, and exchanges. We use a multivariate baseline method to assess the impact of adding the physical store channel on these revenue components. As hypothesized, store introduction cannibalizes catalog sales and has much less impact on Internet sales. Also as hypothesized, returns and exchanges increase. Interestingly, transaction sizes of purchases, returns, and exchanges do not change. The “availability effect” produces a net increase in purchase frequency across channels. This more than compensates for increased returns, producing a net increase in revenues of 20% by adding the store channel. Our findings yield a deeper understanding of the revenue relation between channels, and of the dynamic cross-channel effects of marketing actions.
More and more grocery retailers are becoming multi-channel retailers, as they are opening an online alternative next to their traditional offline supermarkets. While the number of multi-channel grocery shoppers is also expanding at a fast growth rate, there are still large differences in online shopping frequency, and as a result, in the levels of experience with buying in the online grocery channel. This study wants to (i) identify the underlying drivers of online store choice and (ii) explore if and how these drivers change when multi-channel shoppers gain online grocery shopping experience. We investigate this question with an online store choice model using purchase data of an extensive UK household panel over a two-year period, covering all multi-channel retailers in the grocery market. Our results show that multi-channel shoppers, at the start of online grocery shopping, tend to select the online store belonging to the same chain as their preferred offline store, especially when the online store is strongly integrated with the offline store in terms of assortment. When online grocery shopping experience increases, multi-channel shoppers’ focus shifts from a comparison within a chain across channels to a comparison across chains within the online channel, resulting in an increasing importance of online assortment attractiveness and online loyalty when choosing an online store.
The authors propose a conceptual framework to explain whether and under what firm-level conditions cross-channel integration impacts firm sales growth. To test the theory, the authors conduct a qualitative grounded-theory study to build a measurement tool for cross-channel integration at four levels and analyze longitudinal data on 71 publicly traded U.S. retail firms from 2008 to 2011, gathered from multiple secondary sources. The findings reveal that cross-channel integration stimulates sales growth, but that firm online experience and physical-store presence weaken this effect.
Although changes to the channel system are among a firm's most critical decisions, prior research has neglected to examine the impact of channel expansions on firm value. This article investigates whether a firm's announcement of an increase in distribution intensity or the establishment of a new channel influences firm value. The authors also consider the moderating role of context-specific firm, market, and channel strategy contingencies. They test their hypotheses with an event study of 240 announcements of major channel expansions in the United States, Germany, and China. The results indicate that channel expansions affect firm value (i.e., through abnormal stock returns). However, the two types of channel expansions affect firm value differently. Whereas the establishment of a new channel positively influences firm value, reactions to an increase in distribution intensity are highly contingent. For example, firms operating in exceedingly turbulent or competitive markets experience firm value reductions in response to an increase in distribution intensity. Notably, the same two environmental contingencies enhance firm value when the firm establishes a new channel.
A decade after the dot-com implosion, traditional retailers are lagging in their embrace of digital technologies. To survive, they must pursue a strategy of omnichannel retailing—an integrated sales experience that melds the advantages of physical stores with the information-rich experience of online shopping. Retailers face challenges in reaching this goal. Many traditional retailers arenʼt technology-savvy. Few are adept at test-and-learn methodologies. They will need to recruit new kinds of talent. And theyʼll need to move away from analog metrics like same-store sales and focus on measures such as return on invested capital. Traditional retailers must also transform the one big feature internet retailers lack—stores—from a liability into an asset. They must turn shopping into an entertaining, exciting, and emotionally engaging experience. Companies like Disney, Apple, and Jordanʼs Furniture are leading the way. Artwork: Rachel Perry Welty, Lost in My Life (wrapped books), 2010, pigment print Photography: Rachel Perry Welty and Yancey Richardson Gallery, NY Itʼs a snowy Saturday in Chicago, but Amy, age 28, needs resort wear for a Caribbean vacation. Five years ago, in 2011, she would have headed straight for the mall. Today she starts shopping from her couch by launching a videoconference with her personal concierge at Danella, the retailer where she bought two outfits the previous month. The concierge recommends several items, superimposing photos of them onto Amyʼs avatar. Amy rejects a couple of items immediately, toggles to another browser tab to research customer reviews and prices, finds better deals on several items at another retailer, and orders them. She buys one item from Danella online and then drives to the Danella store near her for the in-stock items she wants to try on. As Amy enters Danella, a sales associate greets her by name and walks her to a dressing room stocked with her online selections—plus some matching shoes and a cocktail dress. She likes the shoes, so she scans the bar code into her smartphone and finds the same pair for 73), and checks out with her smartphone.
How does the monetary value of customer purchases vary by customer preference for purchase channels (e.g., traditional, electronic, multichannel) and product category? The authors develop a conceptual model and hypotheses on the moderating effects of two key product category characteristics—the utilitarian versus hedonic nature of the product category and perceived risk—on the channel preference—monetary value relationship. They test the hypotheses on a unique large-scale, empirically generalizable data set in the retailing context. Contrary to conventional wisdom that all multichannel customers are more valuable than single-channel customers, the results show that multichannel customers are the most valuable segment only for hedonic product categories. The findings reveal that traditional channel customers of low-risk categories provide higher monetary value than other customers. Moreover, for utilitarian product categories perceived as high (low) risk, web-only (catalog- or store-only) shoppers constitute the most valuable segment. The findings offer managers guidelines for targeting and migrating different types of customers for different product categories through different channels.
Multichannel customer management is “the design, deployment, and evaluation of channels to enhance customer value through effective customer acquisition, retention, and development” (Neslin, Scott A., D. Grewal, R. Leghorn, V. Shankar, M. L. Teerling, J. S. Thomas, P. C. Verhoef (2006), Challenges and Opportunities in Multichannel Management. Journal of Service Research 9(2) 95–113). Channels typically include the store, the Web, catalog, sales force, third party agency, call center and the like. In recent years, multichannel marketing has grown tremendously and is anticipated to grow even further. While we have developed a good understanding of certain issues such as the relative value of a multichannel customer over a single channel customer, several research and managerial questions still remain. We offer an overview of these emerging issues, present our future outlook, and suggest important avenues for future research.