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

TLDR

Recent operations management literature analyzes the impact of sharing inventory availability information. The study analyzes the impact of implementing a buy‑online, pick‑up‑in‑store (BOPS) project using a proprietary dataset. The authors explain the BOPS impact through cross‑selling and channel‑shift effects, supported by changes in cart abandonment and conversion rates. BOPS implementation reduced online sales while boosting store sales and traffic, but the study shows that single‑channel data can mislead conclusions about such complex interventions. The paper was accepted by Alok Gupta for a special issue on business analytics.

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. This paper was accepted by Alok Gupta, special issue on business analytics.