Omni-Channel Retailing and Firm Performance from a Customer Lifetime Value Perspective

In the digital era, retailers are keen to find out whether omni-channel retailing helps improve long-term firm performance. In this paper, we employ machine learning techniques on a large consumption data set in order to measure customer lifetime value(CLV)as the basis for determining long-term firm performance, and we provide an empirical analysis of the relationship between omni-channel retailing and CLV. The results suggest that omni-channel retailing may effectively enhance CLV. Further analysis reveals that this process is influenced by heterogeneous consumer requirements and that significant differences exist in the extent to which the omni-channel transition may influence CLV depending on consumer preferences for diversity of commodities, sensitivity to the cost of contract performance, and sensitivity to warehousing costs. Hence, retailers should provide consumers with a complete portfolio of goods and services based on target consumers' heterogeneous requirements in order to increase omni-channel efficiency.