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  • Management Science

Integration of Online and Offline Channels in Retail: The Impact of Sharing Reliable Inventory Availability Information

By: Santiago Gallino and Antonio Moreno
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Abstract

Using a proprietary data set, we analyze the impact of the implementation of a “buy-online, pick-up-in-store” (BOPS) project. The implementation of this project is associated with a reduction in online sales and an increase in store sales and traffic. These results can be explained by two simultaneous phenomena: (1) additional store sales from customers who use the BOPS functionality and buy additional products in the stores (cross-selling effect) and (2) the shift of some customers from the online to the brick-and-mortar channel and the conversion of noncustomers into store customers (channel-shift effect). We explain these channel-shift patterns as an increase in “research online, purchase offline” behavior enabled by BOPS implementation, and we validate this explanation with evidence from the change of cart abandonment and conversion rates of the brick-and-mortar and online channels. We interpret these results in light of recent operations management literature that analyzes the impact of sharing inventory availability information. Our analysis illustrates the limitations of drawing conclusions about complex interventions using single-channel data.

Keywords

Retail Operations; Inventory Availability; Empirical Operations Management; Business Analytics; Online Retail; Ecommerce; Operations; Management; Distribution Channels; Consumer Behavior; E-commerce; Retail Industry

Citation

Gallino, Santiago, and Antonio Moreno. "Integration of Online and Offline Channels in Retail: The Impact of Sharing Reliable Inventory Availability Information." Management Science 60, no. 6 (June 2014): 1434–1451. (Finalist of Management Science Best Paper award in Operations Management.)
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About The Author

Antonio Moreno

Technology and Operations Management
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    Operational Consequences of Customer Interaction Design: Evidence From Last-Mile Delivery Services

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    Need for Speed: The Impact of In-Process Delays on Customer Behavior in Online Retail

    By: Santiago Gallino, Nil Karacaoglu and Antonio Moreno
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    Majid Al Futaim: Adapting the Shopping Mall to the Digital Era

    By: Antonio Moreno and Gamze Yucaoglu
More from the Authors
  • Operational Consequences of Customer Interaction Design: Evidence From Last-Mile Delivery Services By: Natalie Epstein, Santiago Gallino and Antonio Moreno
  • Need for Speed: The Impact of In-Process Delays on Customer Behavior in Online Retail By: Santiago Gallino, Nil Karacaoglu and Antonio Moreno
  • Majid Al Futaim: Adapting the Shopping Mall to the Digital Era By: Antonio Moreno and Gamze Yucaoglu
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