Omnichannel retailing features, such as ship‐to‐store (STS) service, are designed to deliver a seamless shopping experience for customers. For a retailer, introducing omnichannel capabilities requires major investments to integrate physical stores and online marketplaces, yet holds a promise of potentially enhancing revenue streams from both brick‐and‐mortar (BM) stores and online store channels. We assess the promise of ship‐to‐store capabilities by analyzing transactional data from a national jewelry retailer to study impacts of introducing ship‐to‐store on a retailer's operating performance, in terms of sales and customer returns. Contrary to expectations, the findings show that online sales decreased after ship‐to‐store was introduced, although BM store sales increased. Detailed analysis of the transactional data suggests that, after STS implementation, some customers switched from the online channel to the brick‐and‐mortar channel. This switch occurred mainly for high‐value purchases. The customers who actually remained with and fully completed a sale using the ship‐to‐store service typically were those that bought low‐value items. Our findings also suggest that introducing ship‐to‐store increased cross‐channel customer returns of online purchases to physical stores. Concurrently, these new ship‐to‐store returns generated additional BM store sales. The paper contributes by showing how introducing ship‐to‐store service can have different impacts in terms of sales and returns across a retailer's channels.

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We use a proprietary data set from a national department store chain and evaluate the competitive impact of the launch of a buy-online-and-pick-up-in-store service by a major competitor. The transaction-level data set includes nearly 50 million transactions (purchase and return) across both online and brick-and-mortar channels. Although the strategy of buying online and picking up in a store is primarily designed to attract online shoppers into stores, our findings show that after the competitor’s launch, both online and store sales at the focal department store chain are negatively affected. Our results indicate a differential competitive threat that is predicated on the value proposition that the buy-online-and-pick-up-in-store service poses for customers in each channel. Online shoppers are drawn to the competitor through an additional level of shopping assurance, along with the free and fast delivery that the buy-online-and-pick-up-in-store service provides to customers. For store shoppers, the service facilitates research-online, buy-offline behavior, as well as product availability information that eliminates wasted trips to the store. Distance to market affects the intensity of impact. For the online channel, the estimated loss in sales averages 4.7% across the demographic market areas that are served and ranges between 0.4% and 18.5%. For stores, the average estimated loss in sales is 1.8% and ranges between 0.1% and 3.7%. This paper was accepted by Victor Martínez-de-Albéniz, operations management.

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W e use a proprietary data set from a national US department store chain to investigate the impact of competitor store closures on a major retailer. The transaction level data set includes nearly 80 million transactions, corresponding to $2 billion in sales over a 25-month period. We find that store sales increase with respect to a store's proximity to closed competitor locations. More interestingly, we find that online channel sales also increase in geographic locations where competitors close stores and where our focal retailer has store locations in close proximity to the markets it serves. This latter finding highlights the important role that stores play in the online channel. Stores provide a level of shopping assurance generally not available online and support customer webrooming and showrooming to mitigate purchase uncertainty. Stores are also integral to omnichannel services like return-to-store wherein stores provide a convenient nearby location to make a free return should an online purchase not meet expectations. Consistent with these shopping behaviors, our results demonstrate that the focal retailer, in markets affected by competitor store closures, is able to capture demand that exhibits greater uncertainty in purchases as evidenced by (i) a disproportionate increase in riskier high value vs. low value store purchases consistent with webrooming, (ii) increased online sales of product categories associated with showrooming, and (iii) an increase in return-to-store instances for online purchases.