Omni‐channel retailing on platforms: Disentangling the effects of channel integration and inter‐platform function usage difference

Abstract

The rise of omni-channel retailing poses challenges for e-marketplace platforms. To retain third-party sellers in the face of competitive pressure from rivals, e-marketplace platforms are compelled to provide support for onlineoffline channel integration (OOCI). However, the provision of OOCI support can adversely affect an OOCI-enabled platform's product sales growth by encouraging consumers to switch to brick-and-mortar stores operated by thirdparty sellers. To ascertain how the OOCI-enabled platform can outperform under such circumstances, we analyzed data on sales of 51,409 products on a dominant Chinese e-marketplace platform as well as inter-platform function usage difference across 209 third-party sellers. Combining propensity score matching with hierarchical linear modeling, we discovered that informational OOCI (e.g., concurrent availability of a product on both online and offline channels) negatively influences the OOCI-enabled platform's product sales growth, whereas the effect of physical OOCI (e.g., the option of store pickup for online purchases) is not significant. Additionally, we found that the three constituent sub-dimensions of third-party sellers' inter-platform function usage difference (i.e., volume difference, category orientation specialization, and uniqueness) moderate the impact of OOCI on the OOCI-enabled platform's product sales growth differently. Findings from this study thus yield actionable guidelines for e-marketplace platforms pursuing omni-channel retailing strategies.

Advancing the marketing‐operations interface in omnichannel retail

“…However, the online‐offline integration of platforms has received little attention so far. Addressing this gap, Fang et al (2023) compare two fulfillment models that arise when, under competitive pressure, platforms decide to provide third‐party sellers support for channel integration. In the first fulfillment model, the so‐called (i) informational online‐offline channel integration, the platform provides so‐called “SAME” labels to signal that the identical product is also available at third‐party sellers' sites.…”

“…The second model, called (ii) transactional online‐offline channel integration, constitutes the buy online, pickup in‐store (at one of the third‐party's physical sites) fulfillment. Using data from a Chinese B2C platform, Fang et al (2023) show that offering (i) informational integration dampens a platform's sales growth while (ii) transactional integration has no significant effect on sales growth. They further reveal how these effects are moderated by the seller's inter‐platform function usage.…”

“…Current omnichannel literature has relied heavily on analytical modeling to portray the mechanisms in omnichannel retail (e.g., Gao & Su, 2017; Wu & Chen, 2022), or on quasi‐experimental work that analyzes the effect of channel expansion‐integration and the introduction of omnichannel fulfillment models (e.g., Akturk et al, 2018; Avery et al, 2012; Fang et al, 2023; Gallino & Moreno, 2014; Ren et al, 2023). This work has mainly been descriptive and sales‐centric.…”

Driving mechanism of consumer migration behavior under the COVID-19 pandemic

“…Van de Zande (60) verified that perceived value has a positive effect on consumers' intention to shop using online channels. Fang et al (61), based on the expected utility theory, proposed that consumers' perceived value of channels has a positive impact on their intention to migrate to a channel for shopping. This paper therefore takes perceived usefulness, perceived entertainment, and perceived cost as influencing factors, and further studies the influencing mechanism of consumers' channel migration behavior under normal epidemic prevention and control.…”

“…Van de Zande ( 60 ) verified that perceived value has a positive effect on consumers' intention to shop using online channels. Fang et al ( 61 ), based on the expected utility theory, proposed that consumers' perceived value of channels has a positive impact on their intention to migrate to a channel for shopping.…”