The Best of Both Retail Worlds: Analyzing the Clicks-and-Bricks Retail Model

Since the internet became a new marketplace for buyers and sellers, the modernization of e-commerce brings into question whether online retailing can effectively replace traditional brick-and-mortar stores. Recent trends have highlighted the struggling business of physical retailers, yet many continue to operate while also having introduced an online sales channel along with pages on social media to increase engagement with customers. This study challenges the popular assumption that e-commerce is cannibalizing in-store sales opportunities, where online sales grow increasingly at the expense of the conventional method of shopping in brick-and-mortar stores. In examining financial and internet-related data of 50 major U.S. retailers from 2008 through 2013, I run panel data regressions to identify factors that contribute to the growth of in-store sales revenue and the proportion of online sales. My results indicate that retailers operating a clicks-and-bricks model do not suffer from channel cannibalization but may be forming a synergy across channels, as there are significant increases in measures regarding both physical and online retail operations