Battle of the channels: The impact of tablets on digital commerce

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Management Science, ISSN: 1526-5501, Vol: 63, Issue: 5, Page: 1469-1492

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Kaiquan Xu; Jason Chan; Anindya Ghose; Sang Pil Han
Institute for Operations Research and the Management Sciences (INFORMS)
Business, Management and Accounting; Decision Sciences
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The introduction of tablets in online retailing has created an additional touchpoint through which e-commerce firms can interact with consumers. In this paper,we seek to understand and measure the causal impact of tablets on e-commerce sales. In doing so, we examine the complementary and substitution impact of the tablet channel on the smartphone and PC channels. We rely on a unique data set from Alibaba, the largest e-commerce firm in the world, and exploit a natural experiment via the iPad app introduction to empirically identify our results. The results show that users' adoption of tablets enhanced the overall growth of Alibaba's e-commerce market, with an annual increase of approximately US$923.5 million. Our results demonstrate that the tablet channel acts as a substitute for the PC channel while it acts as a complement for the smartphone channel. Furthermore, the use of tablets spurs casual browsing, which leads to the purchase of more impulse products and a wider diversity of products. Cross-device browsing behavior is found to enhance sales outcomes, and the degree of interrelationships between devices varies across the course of the day. We provide insights for retailers about how they can increase their sales volume and revenue in the emerging tablet economy.