Showing papers by "David Bell published in 2018"
TL;DR: Gaur et al. as discussed by the authors investigated the impact of showrooms on demand generation and operational efficiency of online-first retailers and found that showrooms increase demand overall and in the online channel as well, and generate operational spillovers to other channels by attracting customers who have a higher cost-to-serve.
Abstract: Omnichannel environments where customers shop online and offline at the same retailer are ubiquitous, and are deployed by online-first and traditional retailers alike. We focus on the relatively understudied domain of online-first retailers and the engagement of a key omnichannel tactic; specifically, introduction of showrooms physical locations where customers can view and try products in combination with online fulfillment that uses centralized inventory management. We ask whether, and if so, how, showrooms benefit the two most basic retail objectives: demand generation and operational efficiency. Using quasi-experimental data on showroom openings by WarbyParker.com , the leading and iconic online-first eyewear retailer, we find that showrooms: 1 increase demand overall and in the online channel as well; 2 generate operational spillovers to the other channels by attracting customers who, on average, have a higher cost-to-serve; 3 improve overall operational efficiency by increasing conversion in a sampling channel and by decreasing returns; and 4 amplify these demand and operational benefits in dealing with customers who have the most acute need for the firm's products. Moreover, the effects we document strengthen with time as showrooms contribute not only to brand awareness but also to what we term channel awareness as well. We conclude by elaborating the underlying customer dynamics driving our findings and by offering implications for how online-first retailers might deploy omnichannel tactics.
This paper was accepted by Vishal Gaur, operations management.
289 citations
TL;DR: In this article, the authors find that post the ZIS experience, customers spend more, shop at a higher velocity, and are less likely to return items, and the positive impact on returns is doubly virtuous as it is more pronounced for more tactile, higher-priced items, thus mitigating a key pain point of online retail.
Abstract: We conjecture that for online retailers, experience-centric offline store formats do not simply expand market coverage, but rather, serve to significantly amplify future positive customer behaviors, both online and offline. We term this phenomenon “supercharging” and test our thesis using data from a digital-first men’s apparel retailer and a pioneer of the so-called “Zero Inventory Store” (ZIS) format — a small footprint, experience-centric retail location which carries no inventory for immediate fulfillment, but fullfils orders via e-commerce. Using a risk-set matching approach, we calibrate our estimates on customers who are “treated”, i.e., have a ZIS experience, and matched with identical customers who shop online only. We find that post the ZIS experience, customers spend more, shop at a higher velocity, and are less likely to return items. The positive impact on returns is doubly virtuous as it is more pronounced for more tactile, higher-priced items, thus mitigating a key pain point of online retail. Furthermore, the ZIS shopping experience aids product discovery and brand attachment, causing sales to become more diffuse over a larger number of categories. Finally, we demonstrate that our results are robust to self-selection and potentially confounding effects of unobservable factors on the matched pairs of customers. Implications for retailing practice, including for legacy, offline-first retailers, are discussed.
1 citations