Omni-channel retailing on platforms: Disentangling the effects of channel integration and inter-platform function usage difference

The rise of omni-channel retailing poses challenges for e-marketplace platforms. To retain third-party sellers in the face of competitive pressure from rivals, e-marketplace platforms are compelled to provide support for online-offline channel integration (OOCI). However, the provision of OOCI support can adversely affect an OOCI-enabled platform's product sales growth by encouraging consumers to switch to brick-and-mortar stores operated by third-party sellers. To ascertain how the OOCI-enabled platform can outperform under such circumstances, we analyzed data on sales of 51,409 products on a dominant Chinese e-marketplace platform as well as inter-platform function usage difference across 209 third-party sellers. Combining propensity score matching with hierarchical linear modeling, we discovered that informational OOCI (e.g., concurrent availability of a product on both online and offline channels) negatively influences the OOCI-enabled platform's product sales growth, whereas the effect of physical OOCI (e.g., the option of store pickup for online purchases) is not significant. Additionally, we found that the three constituent sub-dimensions of third-party sellers' inter-platform function usage difference (i.e., volume difference, category orientation specialization, and uniqueness) moderate the impact of OOCI on the OOCI-enabled platform's product sales growth differently. Findings from this study thus yield actionable guidelines for e-marketplace platforms pursuing omni-channel retailing strategies.