When Online Engagement Gets in the Way of Offline Sales - A Natural Experiment

Sagit Bar-Gill () and Shachar Reichman ()
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Sagit Bar-Gill: MIT Sloan School of Management, 77 Massachusetts Ave, Cambridge, MA 02139
Shachar Reichman: MIT Sloan School of Management, 77 Massachusetts Ave, Cambridge, MA 02139, and Tel Aviv University, Tel Aviv, 69978, ISRAEL

No 15-13, Working Papers from NET Institute

Abstract: The paper studies the effect of online engagement on a brand’s website on offline sales, for a product not available via the online channel. We propose a modelling framework for the online-to-offline funnel, and study the effect of online engagement on purchase decisions. The model highlights both substitution and complementarity between online and offline engagement and sales. We then exploit a natural experiment setting to study the effect of the introduction of a new interactive website by a leading automobile brand on dealership contact and sales. We find evidence for substitution between online and offline engagement, as offline engagement and sales declined following launch of the new website

Keywords: Online-to-offline; online engagement; natural experiment; sales funnel (search for similar items in EconPapers)
JEL-codes: L19 M31 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2015-09
New Economics Papers: this item is included in nep-ict and nep-mkt
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