Is an online retail offering more than a strategic defence?
(A2020-56060)

AUTHORS

Philip Stern, University of Exeter Business School & Ehrenberg-Bass Institute University of South Australia; Jaap Wieringa, University of Groningen ; Magda Nenycz-Thiel, University of South Australia/Ehrenberg-Bass Institute; John Dawes, University of South Australia

KEYWORDS

Omni-channel; Incremental; Benefits

ABSTRACT

There is general acceptance that the costs of offering grocery home delivery are greater than the financial benefits. We explore this assumption by looking at the incremental changes in the number of households buying from a retailer who has an on-line offering and we find that there are demonstrable sales benefits to the retailer. This finding provides potential metrics for retailers to evaluate the benefits of an on-line offering. In contrast, there is a reduction in loyalty as measured by the share of category requirements satisfied by a specific retailer. This pattern is evident even when the retailer does not have an on-line offering. We consider potential implications from these findings.