Adding Bricks to Clicks: On the Role of Physical Stores in a World of Online Shopping

Abstract

Buying a product has never been easier. Consumers can shop online, over the phone or via mail order, from home or on the go, and if they want to experience touch and feel, they can also visit a “real” store. Often, one and the same retailer offers several of these options, and multichannel retailing has become common in most product categories. By offering several channels, retailers are trying to reach more consumer segments and create synergies, with stores acting as billboards for the brand, catalogs providing enticing reminders to buy and the Internet providing an ever-present storefront. But synergies do not arise automatically. Different channels can also cannibalize one another, and it is not always easy to predict which effects will prevail. A recent study took a closer look at the interplay among different retail channels and showed that the short-term effects of store openings can be very different from the long-term sales impact.