Adding bricks to clicks
Subtitle: the effects of store openings on sales through direct channels
By: Jill Avery, Mary Caravella, John Deighton, Thomas Steenburgh
Contributors: Caravella, Mary; Deighton, John; Steenburgh, Thomas; Harvard Business School. Division of Research
Edition: Rev.
Series: Working paper / Division of Research, Harvard Business School -- 07-043; Working paper (Harvard Business School. Division of Research) -- 07-043
Publisher: Division of Research, Harvard Business School
Published: 2007
Place of publication: Boston]
Language: eng
Number of pages: 30
Description: We assess the effect of opening a retail store on direct channel sales in a natural experiment that resulted when a leading U.S. retail chain opened new stores in two retail trade areas that it had previously served by direct channels alone, and one retail trade area it had previously served with a combination of direct channels and stores. We hypothesize two effects: cannibalization and complementarity, and conjecuture that the magnitude of these effects may be different at different points in time. Using six years of proprietary sales data supplied by this retailer at a zip code level of aggregation, and modeling both by interrupted time series analysis and by difference-in-differences analysis, we estimate the level and duration of the effect of the store openings on direct sales relative to direct sales in matched control regions where there were no store openings. We find evidence of a short term cannibalization effect (except where stores predate the opening of the new store), followed by complementarity that eventually swamps the short term decline. We argue for advantages to using zip code level data for both methodological and consumer data privacy reasons.
Notes: Revision. Originally published: January 2007.

Includes bibliographical references.