IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i13p7829-d848940.html
   My bibliography  Save this article

When Offline Stores Reduce Online Returns

Author

Listed:
  • Christian F. Hirche

    (University of Groningen, Faculty of Economics & Business, Department of Marketing, P.O. Box 800, 9700 AV Groningen, The Netherlands)

  • Tammo H. A. Bijmolt

    (University of Groningen, Faculty of Economics & Business, Department of Marketing, P.O. Box 800, 9700 AV Groningen, The Netherlands)

  • Maarten J. Gijsenberg

    (University of Groningen, Faculty of Economics & Business, Department of Marketing, P.O. Box 800, 9700 AV Groningen, The Netherlands)

Abstract

Among the dark sides of contemporary multi-channel retailing are the vast amounts of product returns, especially in the online channel. High product returns not only put pressure on the retailers’ profitability, but also come at high societal and environmental costs. A central question then is whether multi-channel retailers can use their offline stores to help reduce product returns in the online channel without harming online sales. In an empirical study, we address this issue using data from a large Dutch shoe retailer. We develop a novel spatial model to estimate the influence of proximate retail stores on customers’ online shopping behavior, while controlling for spatial and customer heterogeneity. Results demonstrate that an increased offline channel presence indeed reduces online returns, depending on the product’s risk profile, without significantly lowering online sales. Offline stores can thus be an effective and appealing way for retailers to mitigate the negative impact of online shopping related to product returns.

Suggested Citation

  • Christian F. Hirche & Tammo H. A. Bijmolt & Maarten J. Gijsenberg, 2022. "When Offline Stores Reduce Online Returns," Sustainability, MDPI, vol. 14(13), pages 1-26, June.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:13:p:7829-:d:848940
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/13/7829/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/13/7829/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Donald J. Lacombe & Stuart G. McIntyre, 2016. "Local and global spatial effects in hierarchical models," Applied Economics Letters, Taylor & Francis Journals, vol. 23(16), pages 1168-1172, November.
    2. Minnema, Alec & Bijmolt, Tammo H.A. & Gensler, Sonja & Wiesel, Thorsten, 2016. "To Keep or Not to Keep: Effects of Online Customer Reviews on Product Returns," Journal of Retailing, Elsevier, vol. 92(3), pages 253-267.
    3. Verhoef, Peter C. & Kannan, P.K. & Inman, J. Jeffrey, 2015. "From Multi-Channel Retailing to Omni-Channel Retailing," Journal of Retailing, Elsevier, vol. 91(2), pages 174-181.
    4. van Nierop, J.E.M. & Leeflang, P.S.H. & Teerling, M.L. & Huizingh, K.R.E., 2011. "The impact of the introduction and use of an informational website on offline customer buying behavior," International Journal of Research in Marketing, Elsevier, vol. 28(2), pages 155-165.
    5. Elie Ofek & Zsolt Katona & Miklos Sarvary, 2011. ""Bricks and Clicks": The Impact of Product Returns on the Strategies of Multichannel Retailers," Marketing Science, INFORMS, vol. 30(1), pages 42-60, 01-02.
    6. Kim, Junyong & Wansink, Brian, 2012. "How Retailers’ Recommendation and Return Policies Alter Product Evaluations," Journal of Retailing, Elsevier, vol. 88(4), pages 528-541.
    7. Tammo H. A. Bijmolt & Peter C. Verhoef, 2017. "Loyalty Programs: Current Insights, Research Challenges, and Emerging Trends," International Series in Operations Research & Management Science, in: Berend Wierenga & Ralf van der Lans (ed.), Handbook of Marketing Decision Models, edition 2, chapter 0, pages 143-165, Springer.
    8. James P. LeSage, 2014. "What Regional Scientists Need to Know about Spatial Econometrics," The Review of Regional Studies, Southern Regional Science Association, vol. 44(1), pages 13-32, Spring.
    9. Hui Li, 2021. "Are e-books a different channel? Multichannel management of digital products," Quantitative Marketing and Economics (QME), Springer, vol. 19(2), pages 179-225, June.
    10. Pauwels, Koen & Neslin, Scott A., 2015. "Building With Bricks and Mortar: The Revenue Impact of Opening Physical Stores in a Multichannel Environment," Journal of Retailing, Elsevier, vol. 91(2), pages 182-197.
    11. Zheyin (Jane) Gu & Giri K. Tayi, 2015. "Consumer mending and online retailer fit-uncertainty mitigating strategies," Quantitative Marketing and Economics (QME), Springer, vol. 13(3), pages 251-282, September.
    12. Eric T. Anderson & Karsten Hansen & Duncan Simester, 2009. "The Option Value of Returns: Theory and Empirical Evidence," Marketing Science, INFORMS, vol. 28(3), pages 405-423, 05-06.
    13. J. Paul Elhorst, 2014. "Spatial Econometrics," SpringerBriefs in Regional Science, Springer, edition 127, number 978-3-642-40340-8.
    14. Mitra, Debanjan & Fay, Scott, 2010. "Managing Service Expectations in Online Markets: A Signaling Theory of E-tailer Pricing and Empirical Tests," Journal of Retailing, Elsevier, vol. 86(2), pages 184-199.
    15. Neslin, Scott A. & Shankar, Venkatesh, 2009. "Key Issues in Multichannel Customer Management: Current Knowledge and Future Directions," Journal of Interactive Marketing, Elsevier, vol. 23(1), pages 70-81.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Singer, Gerald & Köll, Rebekka & Aichhorn, Lukas & Pertl, Patrick & Trattner, Alexander, 2023. "Utilizing hydrogen pressure energy by expansion machines – PEM fuel cells in mobile and other potential applications," Applied Energy, Elsevier, vol. 343(C).
    2. Strube Martins, Sonia & Knips, Julian & Wernick, Christian, 2022. "eSIM: Potentiale, Anforderungen und Wettbewerbsprobleme," WIK Discussion Papers 490, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ionica Oncioiu & Iustin Priescu & Geanina Silviana Banu & Narcis Chirca, 2023. "Green Consumers’ Responses to Integrated Digital Communication in the Context of Multichannel Retail," Sustainability, MDPI, vol. 15(2), pages 1-17, January.
    2. Tagashira, Takumi & Minami, Chieko, 2019. "The Effect of Cross-Channel Integration on Cost Efficiency," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 68-83.
    3. Maier, Erik & Wieringa, Jaap, 2021. "Acquiring customers through online marketplaces? The effect of marketplace sales on sales in a retailer's own channels," International Journal of Research in Marketing, Elsevier, vol. 38(2), pages 311-328.
    4. Hernant, Mikael & Rosengren, Sara, 2017. "Now what? Evaluating the sales effects of introducing an online store," Journal of Retailing and Consumer Services, Elsevier, vol. 39(C), pages 305-313.
    5. Vaishnav, Bharat & Ray, Sourav, 2023. "A thematic exploration of the evolution of research in multichannel marketing," Journal of Business Research, Elsevier, vol. 157(C).
    6. Scott K. Shriver & Bryan Bollinger, 2022. "Demand Expansion and Cannibalization Effects from Retail Store Entry: A Structural Analysis of Multichannel Demand," Management Science, INFORMS, vol. 68(12), pages 8829-8856, December.
    7. Hui Li, 2021. "Are e-books a different channel? Multichannel management of digital products," Quantitative Marketing and Economics (QME), Springer, vol. 19(2), pages 179-225, June.
    8. Wang Yixin & Gong Qiguo & Wang Tingyan & Tian Xin, 2021. "The Effect of Online Channel Addition on Store Performance: Empirical Evidence from Chinese Chain Retailers," Journal of Systems Science and Information, De Gruyter, vol. 9(4), pages 356-377, August.
    9. Shakir Goraya, M. Awais & Zhu, Jing & Akram, Muhammad Shakaib & Shareef, Mahmud Akhter & Malik, Aneela & Bhatti, Zeeshan Ahmed, 2022. "The impact of channel integration on consumers’ channel preferences: Do showrooming and webrooming behaviors matter?," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    10. Neslin, Scott A., 2022. "The omnichannel continuum: Integrating online and offline channels along the customer journey," Journal of Retailing, Elsevier, vol. 98(1), pages 111-132.
    11. Ravula, Prashanth & Bhatnagar, Amit & Ghose, Sanjoy, 2020. "Antecedents and consequences of cross-effects: An empirical analysis of omni-coupons," International Journal of Research in Marketing, Elsevier, vol. 37(2), pages 405-420.
    12. Duong, Quang Huy & Zhou, Li & Meng, Meng & Nguyen, Truong Van & Ieromonachou, Petros & Nguyen, Duy Tiep, 2022. "Understanding product returns: A systematic literature review using machine learning and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 243(C).
    13. Alice Mazzucchelli & Roberto Chierici & Francesca Ceruti & Laura Gavinelli, 2017. "Competing in an omnichannel environment. e-tailers strategies and challenges," ESPERIENZE D'IMPRESA, FrancoAngeli Editore, vol. 2017(1), pages 5-28.
    14. Rokonuzzaman, Md & Iyer, Pramod & Harun, Ahasan, 2021. "Return policy, No joke: An investigation into the impact of a retailer's return policy on consumers' decision making," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    15. Saghiri, Soroosh & Wilding, Richard & Mena, Carlos & Bourlakis, Michael, 2017. "Toward a three-dimensional framework for omni-channel," Journal of Business Research, Elsevier, vol. 77(C), pages 53-67.
    16. Shankar, Venkatesh & Kushwaha, Tarun, 2021. "Omnichannel marketing: Are cross-channel effects symmetric?," International Journal of Research in Marketing, Elsevier, vol. 38(2), pages 290-310.
    17. Zhang, Sha & Pauwels, Koen & Peng, Chenming, 2019. "The Impact of Adding Online-to-Offline Service Platform Channels on Firms' Offline and Total Sales and Profits," Journal of Interactive Marketing, Elsevier, vol. 47(C), pages 115-128.
    18. Gianfranco Walsh & Michael Möhring, 2017. "Effectiveness of product return-prevention instruments: Empirical evidence," Electronic Markets, Springer;IIM University of St. Gallen, vol. 27(4), pages 341-350, November.
    19. Ailawadi, Kusum L. & Farris, Paul W., 2017. "Managing Multi- and Omni-Channel Distribution: Metrics and Research Directions," Journal of Retailing, Elsevier, vol. 93(1), pages 120-135.
    20. David R. Bell & Santiago Gallino & Antonio Moreno, 2018. "Offline Showrooms in Omnichannel Retail: Demand and Operational Benefits," Management Science, INFORMS, vol. 64(4), pages 1629-1651, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:14:y:2022:i:13:p:7829-:d:848940. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.