A Theoretical and Empirical Study of Retailers’ Omnichannel Integration and its Effectiveness

Abstract

With the emergence of digital channels, new technologies and increased data availability- omnichannel strategy has increasingly been viewed as crucial for retailers to meet evolving consumer expectations and drive firm performance. Channel integration is a key element of this strategy, which refers to the degree to which retailers coordinate various channel functions to provide a seamless customer experience across various channels. With emerging capabilities in the industry inevitably raises consumer expectations, consumers perceive value only beyond a certain degree of channel integration. While higher degrees of coordination help meet elevated consumer expectations, these are endogenous to coordination costs. These coordination costs are not evident beforehand and can steeply rise to sabotage the presumed strategic dividends associated with channel integration. In addition to the degree of channel integration, retailers face decisions about the speed of omnichannel adoption given the entrenched competitors and strategic benefits associated in terms of securing a dominant market position and accelerated organizational learning. This dissertation contributes to the marketing channels and coordination literature with (a) a systematic review of the multichannel marketing literature by synthesizing current knowledge, its evolution, and future directions; and (b) Two theory-driven empirical research studies that provide new insights and novel implications to enrich our understanding of omnichannel integration decisions, and certain characteristics of coordination costs can derail the strategic dividends from channel integration. Together these research studies contribute to a growing literature that has outlined the complex nature of these coordination costs but few of which explain their role in determining the outcomes of omnichannel retailing.