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Building with bricks and mortar: the revenue impact of opening physical stores in a multichannel environment

Title	Building with bricks and mortar: the revenue impact of opening physical stores in a multichannel environment
Author	Pauwels, Koen Hendrik, Neslin, S. A
Publication Date:	2015-06
Publication Place	- Elsevier
Subject	Multichannel customer management, Customer relationship management (CRM), Vector autoregression models, Stores; Internet, Returns
Type	Periodical
Language	English
Digital	Yes
Manuscript	No
Library:	Özyeğin University
Library Asset ID	0022-4359
Record ID	5f2ee182-8465-4fa7-a59d-0dbcbc24e264
Library Location	Business Administration
Date	2015-06
Sample Text	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.
DOI	10.1016/j.jretai.2015.02.001
Cilt	91

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Özyeğin University

Building with bricks and mortar: the revenue impact of opening physical stores in a multichannel environment

Author Pauwels, Koen Hendrik, Neslin, S. A

Publication Date 2015-06

Publication Place - Elsevier

Subject Multichannel customer management, Customer relationship management (CRM), Vector autoregression models, Stores; Internet, Returns

Type Periodical

Language English

Digital Yes

Manuscript No

Library Özyeğin University

Library Asset ID 0022-4359

Record ID 5f2ee182-8465-4fa7-a59d-0dbcbc24e264

Library Location Business Administration

Date 2015-06

Sample Text 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.

DOI 10.1016/j.jretai.2015.02.001

Cilt 91