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Mobile App Introduction and Online and Offline Purchases and Product Returns

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  • Unnati Narang

    (Department of Marketing, Mays Business School, Texas A&M University, College Station, Texas 77843)

  • Venkatesh Shankar

    (Center for Retailing Studies, Mays Business School, Texas A&M University, College Station, Texas 77843)

Abstract

How do a retailer’s mobile app adopters differ from nonadopters in their shopping outcomes, such as online and offline purchases and product returns? In this paper, we model the relationship between a retailer’s mobile app launch and the frequency , quantity , and monetary value of purchases in its online and offline channels, as well as product returns. We leverage data on a large retailer’s launch of a mobile app and use a difference-in-differences approach. Our results show that app adopters buy 33% more frequently, buy 34% more items, and spend 37% more than non-adopters in the period after app introduction. At the same time, they return 35% more frequently, 35% more items, and 41% more in dollar value. Combined, app adopters spend 36% more in net monetary value. Furthermore, app adopters’ purchases in both the online and offline channels increase after app launch. The time, location, and features of app use provide descriptive evidence of how the app aids shopping in other channels. App-linked shoppers (those who make a purchase within 48 hours of app use) use the app when they are close to the store of purchase and access the app for loyalty rewards, product details, and notifications. These insights offer important substantive implications.

Suggested Citation

  • Unnati Narang & Venkatesh Shankar, 2019. "Mobile App Introduction and Online and Offline Purchases and Product Returns," Marketing Science, INFORMS, vol. 38(5), pages 756-772, September.
    • Handle: RePEc:inm:ormksc:v:38:y:2019:i:5:p:756-772
    DOI: 10.1287/mksc.2019.1169
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    12. El Kihal, Siham & Shehu, Edlira, 2022. "It's not only what they buy, it's also what they keep: Linking marketing instruments to product returns," Journal of Retailing, Elsevier, vol. 98(3), pages 558-571.
    13. Bies, Suzanne M.T.A. & Bronnenberg, Bart J. & Gijsbrechts, Els, 2021. "How push messaging impacts consumer spending and reward redemption in store-loyalty programs," International Journal of Research in Marketing, Elsevier, vol. 38(4), pages 877-899.
    14. Chen, Jialie & Rao, Vithala R., 2023. "Evaluating strategies for promoting retail mobile channel using a hidden Markov model," Journal of Retailing, Elsevier, vol. 99(1), pages 66-84.
    15. Atandile Ngubelanga & Rodney Duffett, 2021. "Modeling Mobile Commerce Applications’ Antecedents of Customer Satisfaction among Millennials: An Extended TAM Perspective," Sustainability, MDPI, vol. 13(11), pages 1-29, May.
    16. Hou, Jianwei & Elliott, Kevin, 2021. "Mobile shopping intensity: Consumer demographics and motivations," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    17. Ratchford, Brian & Soysal, Gonca & Zentner, Alejandro & Gauri, Dinesh K., 2022. "Online and offline retailing: What we know and directions for future research," Journal of Retailing, Elsevier, vol. 98(1), pages 152-177.
    18. Sulin Ba & Shu He & Shun‐Yang Lee, 2022. "Mobile App Adoption and Its Differential Impact on Consumer Shopping Behavior," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 764-780, February.
    19. Patel, Vipul & Das, Kallol & Chatterjee, Ravi & Shukla, Yupal, 2020. "Does the interface quality of mobile shopping apps affect purchase intention? An empirical study," Australasian marketing journal, Elsevier, vol. 28(4), pages 300-309.
    20. Daria Dzyabura & Siham El Kihal & John R. Hauser & Marat Ibragimov, 2023. "Leveraging the Power of Images in Managing Product Return Rates," Marketing Science, INFORMS, vol. 42(6), pages 1125-1142, November.
    21. Bies, Suzanne, 2022. "Examining the effectiveness of activation techniques on consumer behavior in temporary loyalty programs," Other publications TiSEM ade86df3-4846-4318-938f-a, Tilburg University, School of Economics and Management.
    22. Gökbayrak, Esra & Kayış, Enis, 2023. "Single item periodic review inventory control with sales dependent stochastic return flows," International Journal of Production Economics, Elsevier, vol. 255(C).

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