Online channel expansion strategy: An empirical investigation

Retailers seek to grow their online market by offering channels on multiple online marketplaces. However, little is known about the effect of this online channel expansion strategy on the retailer's performance. In this study, we collected a unique dataset from an online retailer that initiated web stores on three leading online marketplaces. Using propensity score matching and difference-in-differences analysis, we found that the retailer's online channel expansion increased existing consumers' total purchases without changing consumer purchase frequencies on the original channel. Furthermore, we found the temporal effect of online channel expansion -the effect on total purchases, decayed over time.