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Are Multichannel Customers Always More Valuable?

For a large-scale data set, multichannel customers were the most valuable segment only for hedonic products.

Multichannel customers are seen as a firm’s most valuable customers but do they always offer the highest monetary value? With data from a large retailer, Tarun Kushwaha and Venkatesh Shankar find that channel customer value depends on product category (utilitarian versus hedonic) and perceived risk.

Multichannel customers are the most valuable segment only for hedonic product categories such as DVDs, antiques, and apparel. For utilitarian products that are seen as high risk (e.g., computers) web-only shoppers constitute the most valuable segment, while for low-risk utilitarian products, catalog and store-only shoppers are more valuable. Managers can use these findings, reported in the Journal of Marketing, to make channel-specific investments that encourage shoppers to spend more in their preferred channel or that incentivize single-channel shoppers to shop in other channels.

Download paper from American Marketing Association (free until March 23, 2014)
Are Multichannel Customers Really More Valuable? The Moderating Role of Product Category Characteristics by Tarun Kushwaha and Venkatesh Shankar, Journal of Marketing (July 2013)

Related links

Do Marketing Campaigns Produce Multichannel Buying and More Profitable Customers? A Field Experiment
Elisa Montaguti, and Scott A. Neslin, and Sara Valentini (2012)

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