The Value of Pop-Up Stores on Retailing Platforms: Evidence from a Field Experiment with Alibaba

Dennis J. Zhang (), Hengchen Dai (), Lingxiu Dong (), Qian Wu (), Lifan Guo () and Xiaofei Liu ()
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Dennis J. Zhang: John M. Olin School of Business, Washington University in St. Louis, St. Louis, Missouri 63130
Hengchen Dai: Anderson School of Management, University of California, Los Angeles, Los Angeles, California 90095
Lingxiu Dong: John M. Olin School of Business, Washington University in St. Louis, St. Louis, Missouri 63130
Qian Wu: Tmall Business Unit, Alibaba Group, Inc., 310023 Hangzhou, China
Lifan Guo: Tmall Business Unit, Alibaba Group, Inc., 310023 Hangzhou, China
Xiaofei Liu: Tmall Business Unit, Alibaba Group, Inc., 310023 Hangzhou, China

Management Science, 2019, vol. 65, issue 11, 5142-5151

Abstract: We study the value of short-lived and experientially oriented pop-up stores, a popular type of omnichannel retail strategy, on both retailers that participate in pop-up store events and retailing platforms that host these retailers. We conduct a large-scale, randomized field experiment with Alibaba Group involving approximately 800,000 customers. We randomly assign customers to either receive a message about an upcoming weeklong pop-up store event organized by Alibaba’s business-to-consumer platform (Tmall.com) or not receive any message about the event. We find that our message increased foot traffic to the pop-up store and in turn boosted expenditure at participating retailers’ online stores at Tmall after the event ended. Furthermore, we use advanced Wi-Fi technology to track customers’ visits to the pop-up store—a missing component from past research that commonly relies on point-of-sale data. We find that pop-up store visits substantially increased customers’ subsequent expenditure at participating retailers’ Tmall stores. In addition, from a platform perspective we show that pop-up store visits increased customers’ purchases at retailers that sell related products on Tmall but did not participate in the pop-up store event. Additional analyses shed light on possible mechanisms underlying the cross-channel and spillover effects of pop-up stores and demonstrate that these effects were concentrated on prospective consumers.

Keywords: platform operations; randomized field experiment; pop-up stores; Internet of Things; omnichannel retailing (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (16)

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