B.J. (Bart) Scheffer

In only two decades, the emergence of e-commerce has transformed the way consumers shop

and how retail firms operate. Brick-and-mortar retailers have embraced online sales channels

and adapted their physical store networks by resizing, reconfiguring, and closing stores. To

support retail network decisions, retailers use powerful retail gravity models, implemented in

commercial software, that predict individual store revenues predominantly based on measures

for store attractivity and store proximity. Our literature review revealed extensive research on

explaining and predicting competition between individual physical stores, but scant research

on modeling and predicting interaction between individual stores and online channels. This

study aims to bridge that research gap by a) empirically examining the drivers of channel

complementarity and channel substitution for an omnichannel retailer, b) empirically

examining the impact of adding omnichannel services like Buy-Online-Pickup-in-Store and

Ship-To-Store for the same retailer and c) developing and testing a predictive omnichannel

retail gravity model that incorporates not only measures of store attractivity and store

proximity, but also of (the drivers of) channel complementarity and channel substitution.