Channel Capabilities, Product Characteristics, and Impacts of Mobile Channel Introduction

Drawing on the notion of channel capability, we develop a theoretical framework for understanding the interactions between mobile and traditional online channels for products with different characteristics. Specifically, we identify two channel capabilities — access and search capabilities — that differentiate mobile and online channels, and two product characteristics that are directly related to the channel capabilities — time criticality and information intensity. Based on this framework, we generate a set of predictions on the differential impacts of mobile channel introduction across different product categories. We test the predictions using a counterfactual analysis based on vector autoregression and a large panel dataset from a leading e-market in Korea that covers a 28-month period and contains all the transactions made through the online and mobile channels before and after the mobile channel introduction. Consistent with our predictions based on the theoretical framework, our results suggest that the performance impact of the mobile channel depends crucially on the two product characteristics and the resulting product-channel fit. We discuss implications for theory and multichannel strategy