Consumers’ preferences in omnichannel retailing: Empirical models for improving the furniture distribution

Due to its recent rise and promise of success, omnichannel retailing is a field that needs to be explored and to be carefully understood by both practitioners and academics. Retailers implementing omnichannel strategies are considered to be more capable of competing than those which operate through the single channel only. Nevertheless, these strategies require significant efforts for being implemented. Retailers face many issues and challenges when integrating their operations, managing logistics, and harmonising offers among different retail channels. Within this context, the analysis of consumers’ purchasing behaviours plays a central role in the definition of supply strategies that can benefit from synergies and prevent conflicts between channels. Accordingly, this dissertation intends to investigate consumer behaviours in different phases of the purchasing process in an omnichannel retail environment. In particular, the study aims at investigating the differences in consumers’ performance requirements among retail channels and the levers that retailers have to affect consumers’ preferences. The phases identified as critical for this objective are: the consumers’ evaluation of performance during the pre-purchase, the product selection, and the post-purchase response. Specifically, the dissertation focuses on the impact of promised delivery time on demand, on the selection of products, and on the factors affecting product return in omnichannel retailing. The research has been developed in collaboration with the largest furniture retailer in Italy. Furniture was selected for the case study because it matches the criteria for high-involvement purchases. For these purchases, in fact, consumers are motivated to process a large amount of information before making a purchase decision, which thereby affects their expectations for product and service performance. The retailer operates through physical stores, online, and catalogues, offering a seamless retailing experience to customers. The retailer has provided data concerning inventories, store operations, sales, and customers that have allowed tracking millions of transactions between 2014 and 2017. The data have been analysed through econometric and other empirical models. Findings show that consumers are more sensitive to product and service performance when approaching channels characterised by lower media richness capabilities. They demonstrate that consumers are significantly more sensitive to delivery times when buying in virtual channels. In fact, when consumers can inspect products in stores, they are more willing to wait for product deliveries. In addition, results suggest that consumers tend to buy more popular products through virtual channels, although in such cases, they are more prone to return them. Retailers can use the findings presented herein to drive their inventory and facility planning decisions and to support investments in supply chain integration. In addition, results have implications for return policies and assortment decisions among multiple channels. The present dissertation contributes to the literature estimating the value of delivery time for the demand of consumer goods since studies consider it anecdotally. Moreover, both the literature concerning the distribution of sales across retail channels and product returns in omnichannel retailing are still controversial. Therefore, the present research offers a further perspective for interpreting these complex phenomena.