Abstract
Online-to-offline service platform (O2OSP) channels offer innovative means for customers to order local, daily services online (via apps) and have them delivered almost instantly offline. By comparing the business models underlying O2OSP, traditional online and offline, and platform-based e-commerce channels, this article aims to identify the short- and long-term impacts of adding an O2OSP channel on firms' offline and total sales and profits. The analysis focuses primarily on a recent set of daily data gathered from a Chinese fast-food restaurant chain with 35 physical stores that also participates in four food delivery O2OSP channels. The panel data regressions with fixed effects reveal that adding O2OSP channels hurts offline and total profits in the short run but improves offline and total sales and profits in the long run. Specifically, offline and total sales increase by 23.28% and 33.94%, respectively. Thus, the O2OSP channel can serve as a complement to, rather than a substitute for, the offline channel. These results challenge previous research on the sales effects of adding (pure) online or offline channels and highlight the attractiveness of O2OSP channels for improving sales and profits. However, negative interaction effects among different O2OSP channels also signal that adding more O2OSP channels does not necessarily lead to profitable growth.
Original language | English |
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Pages (from-to) | 115-128 |
Number of pages | 14 |
Journal | Journal of Interactive Marketing |
Volume | 47 |
DOIs | |
Publication status | Published - Aug 2019 |
Externally published | Yes |
Funding
This work was supported by the National Natural Science Foundation of China (Grant Nos. 71772169 , 71302126 , 71702007 ). The authors thank the editor and two anonymous reviewers for their insightful comments. The authors also gratefully acknowledge Chenxi Li for providing the weather and online search index data and for insightful discussions; Scott Neslin and Peter Verhoef for their friendly reviews; Yi Hu and Yi-Chun Ou for providing valuable suggestions for the data analysis and conceptual development; Wei Liu for her research assistance; and Hong Zhao for her encouragement and support. Finally, the authors thank the data provider, which wishes to remain anonymous.
Keywords
- Channel addition
- Emerging markets
- Mobile apps
- Omnichannel
- Online-to-offline service platform