Lecturer: Zhengzhiqiang(Professor, University of Texas, Dallas)
Title: Value of Local Showmills to Online Computers
Time: 10 am on Monday, April 29, 2019
Location: Information Management Institute Conference Room A222
Host: Professor Zhuqinghua
Summary of the report:
In this study, we quantify the value of showrooms to online competitors by investigating how the presence and absence of local showrooms impact customers’ search and purchase behaviors with online competitors. By using an exogenous event of a large retailer’s offline market exit and a unique data set capturing customers’ online browsing and purchasing activities before and after the event, we empirically examine the changes in online search and sales made by customers who lived within neighborhoods where local showrooms closed. We complement the conventional sales-based measures by devising several search-based measures in order to better quantify the value of a showroom from the perspective of customers’ online shopping experience. Using a difference-in-difference approach, we find mixed results in terms of online competitors’ sales when a neighboring showroom closes. More importantly, we observe an increase in customers’ online search intensity in the absence of local showrooms. We discuss a wide range of implications both for online and offline retailers based on our results.