Omnichannel Promotion Effectiveness


Speaker


Abstract

Despite the importance of promoting online (offline) customers to buy offline (online), little is known about how such targeted omnichannel promotions actually influence the web, in-store, and total sales. We exploit two randomized field experiment datasets from a large department store with mobile promotions sent to its loyalty members. Experiment 1 finds that the treatment of targeting online customers with offline shopping promotions (online-to-offline) is effective in lifting in-store sales and total sales. Experiment 2, however, finds that targeting offline customers with online shopping promotions (offline-to-online) increases web sales but fails to boost total sales. This targeting can be even harmful and reduce consumer total spending. Our findings do not support the channel-shift mechanism, because the targeted promotions may not always lead to sales that is substituted between the online and offline purchasing channels. Rather, they support the product category-shift mechanism, where offline (but not online) channel facilitates the purchases of touch and feel tactile products and new category sales with more unplanned purchases and cross-buying. The results demonstrate the value of omnichannel promotions and highlight the conditions under which online and offline targeting is most valuable for firms to promote the other channel.