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When Online Engagement Gets in the Way of Offline Sales - A Natural Experiment

Author

Listed:
  • Sagit Bar-Gill

    (MIT Sloan School of Management, 77 Massachusetts Ave, Cambridge, MA 02139)

  • Shachar Reichman

    (MIT Sloan School of Management, 77 Massachusetts Ave, Cambridge, MA 02139, and Tel Aviv University, Tel Aviv, 69978, ISRAEL)

Abstract

The paper studies the effect of online engagement on a brand’s website on offline sales, for a product not available via the online channel. We propose a modelling framework for the online-to-offline funnel, and study the effect of online engagement on purchase decisions. The model highlights both substitution and complementarity between online and offline engagement and sales. We then exploit a natural experiment setting to study the effect of the introduction of a new interactive website by a leading automobile brand on dealership contact and sales. We find evidence for substitution between online and offline engagement, as offline engagement and sales declined following launch of the new website

Suggested Citation

  • Sagit Bar-Gill & Shachar Reichman, 2015. "When Online Engagement Gets in the Way of Offline Sales - A Natural Experiment," Working Papers 15-13, NET Institute.
    • Handle: RePEc:net:wpaper:1513
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Online-to-offline; online engagement; natural experiment; sales funnel;
    All these keywords.

    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other

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