Kushwaha and Shankar 2013

by Tarun Kushwaha and Venkatesh Shankar

The article is forthcoming in Journal of Marketing.

How does the monetary value of customer purchases vary by customer preference for purchase channels (e.g., traditional, electronic, multichannel) and product category? The authors develop a conceptual model and hypotheses on the moderating effects of two key product category characteristics—the utilitarian versus hedonic nature of the product category and perceived risk—on the channel preference–monetary value relationship. They test the hypotheses on a unique large-scale, empirically generalizable data set in the retailing context. Contrary to conventional wisdom that all multichannel customers are more valuable than single-channel customers, the results show that multichannel customers are the most valuable segment only for hedonic product categories. The findings reveal that traditional channel customers of low-risk categories provide higher monetary value than other customers. Moreover, for utilitarian product categories perceived as high (low) risk, web-only (catalog- or store-only) shoppers constitute the most valuable segment. The findings offer managers guidelines for targeting and migrating different types of customers for different product categories through different channels.