Showrooming vs. Competing: How does Brand Selection Matter?

• Main Authors: Qian TANG, Mei LIN
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2015
• Subjects: Electronic commerce; Online and offline markets; Showrooming; Propensity score; Computer Sciences; E-Commerce
• Online Access: https://ink.library.smu.edu.sg/sis_research/2811; https://ink.library.smu.edu.sg/context/sis_research/article/3811/viewcontent/ShowroomingvCompeting_Brand_Selection_av.pdf
• Institution: Singapore Management University

In this study, we empirically examine the effect of local shoe store openings on the sales of a competing, major online shoe retailer. Both showrooming and competing effects can play a role: Under the showrooming effect, the local store opening can lead to more online sales for the online retailer, whereas the competing effect created by the local store opening can substitute away the demand for the online retailer. We examine when one effect dominates the other by classifying local stores into single- and mixed-brand stores. We find that the showrooming effect is dominant for a single-brand store opening, and the competing effect is dominant for a mixed-brand store opening. Our work contributes to the multi-channel literature by studying the channel effects across different retailers. The findings also provide novel insights through identifications of both positive and negative store opening effects on online sales.