| HBS Working Paper Series
Adding Bricks to Clicks: Predicting the Patterns of Cross-Channel Elasticities over Time
In this paper, we propose a conceptual framework to explain whether, when, and for which type of customer the introduction of a new channel helps and hurts sales in existing channels. Our framework separates short- and long-run effects by analyzing underlying channel capabilities. It suggests that order of entry matters, such that, for example, adding the Internet channel to a retail store channel should produce different effects than adding a retail store to the Internet channel. To test our theory, we analyze a unique data set from a high-end retailer using matching methods. Unlike previous research, which has predominantly studied the introduction of an Internet channel, we study the introduction of a retail store and find evidence of cross-channel synergy, as the presence of a retail store increases demand in the catalog and Internet channels over time.
Data and Data Sets;
Demand and Consumers;