The impact of offline store presence on digital sales: The moderating role of product functionality

Multichannel companies are keen on creating synergies between traditional offline stores and digital channels. This research aims to investigate the effect of offline store presence on online and mobile sales and its variation by product functionality. This research examines two dimensions of offline store presence: absolute store presence (i.e., the number of offline stores in a region) and relative store presence (i.e., the ratio of the focal brand's offline stores to the competitors' stores). Using proprietary data from a beauty-product multichannel retailer, findings reveal that its own offline stores help mobile sales improve, while relatively dominant offline store substitutes digital sales. Moreover, product functionality moderates these relationships differently in online and mobile channels. These insights are crucial for retailers to optimize channel management and product alignment, enhancing the efficacy of multichannel strategies.