Exploring the link between offline and online retail sales: insights from 15 years of retail sales data in Great Britain

Abstract

PurposeThis aim of the research is to explore the link between offline and online retail sales through a comprehensive analysis of 15 years of retail sales data in Great Britain. By quantifying the impact of online sales on offline sales and vice versa on different retail categories, the study seeks to expand upon prior research that often focused on unidirectional relationships or specific retail segments. With channel- and sector-specific dynamics, the present study aspires to shed light on the dynamics shaping the retail industry and provide valuable insights for retailers.Design/methodology/approachThe present study draws on 15 years of retail sales data in Great Britain to examine the interplay between offline and online sales across various retail categories. By grounding the analysis in the theoretical underpinning of cross-channel synergies and dis-synergies and applying principles of substitution and complementarity in online and offline retail sales, the research aims to quantify how shifts in online retail influence offline sales and vice versa. The study follows a systematic analysis approach that includes analysis of seasonality, autocorrelation, correlation, lagged cross-correlation and time series regression to provide a holistic understanding of the strength and direction of the relationship.FindingsAmong the myriads of findings, the most noteworthy ones are these. It was found that offline sales tend to increase significantly when online sales increase and online sales also increase significantly when offline sales increase. However, the extent of influence offline sales have on online sales is lower than the extent of influence online sales have on offline sales. For instance, it was found that for every one-unit increase in online sales, on average, the offline sales of retail stores increase by 5.82 units, but for every one-unit increase in offline sales, on average, the online sales of retail stores increase only by 0.07 units. This pattern was found true for all categories for retail stores, with predominantly non-food stores showing the lowest increase (0.02) and non-store retails exhibiting the highest increase (0.23). Additionally, evidence suggested that the retail stores can expect a sizable level of offline sales when there are no online sales (β0 = 5155474.1); however, this was not true for online sales if they have no offline sales.Research limitations/implicationsThe study deepens our insight into the complex interplay between offline and online sales in the retail sector by providing empirical evidence on how online sales and offline sales interact with each other in a retail setting. It also adds nuances to existing knowledge on the relationship between online and offline sales based on channel and sector-specific dynamics. Such findings, coming from the analysis of a whole retail economy, strengthen the existing body of literature and provide a solid foundation for future research in this area. However, the study would have benefited from including qualitative interviews of different categories of retailers to provide more context and depth on interpreting quantitative patterns.Practical implicationsThe study provides practical guidance for retailers on how they can optimize their omnichannel strategies for maximum impact. It also provides insights into the changes in relationship in terms of channel-specific and sector-specific differences. This is particularly important for retailers who operate in those categories of retail as it provides them with an insight into how they can allocate their resources for reaping substantial benefits.Originality/valueDespite the wealth of research exploring the link between online and offline retail sales, there remains a gap in understanding the complex relationship between these two. This study is one of the first to fill this gap by exploring the link through a comprehensive analysis of 15 years of retail sales data in Great Britain. With these channel- and sector-specific findings, this study adds to the growing body of literature that provides an understanding of the bidirectional relationships between offline and online sales. These strengths strengthen the existing body of literature and provide a solid foundation for future research in this area.