When do online consumers need an offline store: the moderating effects of product characteristics

This study serves as an initial attempt to empirically demonstrate how online consumers react to e-retailers’ offline channel extensions. Specifically, we examine how offline channel capabilities influence online consumers’ offline channel switching intentions and their incremental demands in online channels. We investigate how these effects vary across utilitarian and hedonic products with high complexity. The results of the study indicate that while the openings of stores induce online consumers to shop there when purchasing utilitarian products with high complexity, counter-intuitively, the adding of stores results in incremental patronage in the online channels when consumers shop for hedonic products with high complexity. This study validates the guiding role of product characteristics in designing e-retailer offline channels and suggests that incorporating product type and complexity into design likely contributes to the development of stores tailored to specific consumer segments.