Effectiveness of Integrated Offline-and-Online Promotions in Omnichannel Targeting: A Randomized Field Experiment

Abstract

Leveraging omnichannel has become a new norm of strategic marketing in the retail industry, with many vendors foregrounding the value of customers who wish to maximize their shopping experiences across all channels. Notwithstanding such heightened attention, little is known about the effectiveness of omnichannel targeting and promotional strategies. Whereas previous studies assessed the economic worth of channel promotions independently of each other, our study delved into the effects of integrated omnichannel campaigns. Using a randomized field experiment design, we provide empirical evidence of an offline direct experience effect and revealed short-term channel substitution (spillover) effects among customers who only use the online-channel (offline-channel). We further examined omnichannel conversion behaviors after exposure to online promotion and developed different coupon schemes based on responses to the previously offered offline initiative. Finally, we detected significant patterns of post-treatment omnichannel migration and confirmed the effectiveness of integrated omnichannel promotions in fostering a shift to omnichannel shopping.