Multichannel Shopping: Causes and Consequences

Abstract

The authors explore the drivers of multichannel shopping and the impact of multichannel shopping on customer profitability. Through a longitudinal analysis, the authors provide evidence that multichannel shopping is associated with higher customer profitability. Using the social exchange theory, they develop hypotheses regarding the impact of several customer–firm interaction characteristics on customer channel adoption duration. They propose a shared-frailty hazard model for testing the proposed hypotheses. They use the customer database of an apparel manufacturer that sells through three distinct channels for the empirical analysis and find that frequency-related interaction characteristics have the greatest influence on second-channel adoption duration. In contrast, proportion of returns, a purchase-related interaction characteristic, has the greatest influence on third-channel adoption duration. Variation across customers in purchase-related attributes has a greater impact on the duration to adopt the second channel than the duration to adopt the third channel. In contrast, variation across customers in the channel-related attributes has a greater impact on the third-channel adoption duration than on the second-channel adoption duration. The customer–firm interaction characteristics identified in this study and the proposed model framework allow for forward-looking allocation of multichannel marketing resources.