Seminar – Serving someone else’s customers: (How) does a third-party pick-up service change your customers’ shopping behavior at your physical store?

To provide additional customer value, retailers frequently team up with partners to implement in-store services. The authors study whether and under which conditions a customer’s adoption of a third-party pick-up service implemented at a physical store influences the customer’s shopping behavior at the facilitating physical store. Using a quasi-field experiment and applying a difference-in-difference approach, the results show positive effects of adoption on a customer’s shopping frequency and spending at the facilitating store. This effect is moderated by customer and store location factors: shopping frequency and spending increase more for customers that visit the store more (for whom the facilitating retailer is more relevant), who live further away (who face more friction to visit the facilitating store), and for locations where there are only a few retailers for one-stop shopping in the close neighborhood (where the relevance of the third-party service in terms of cost reduction is high). The uniqueness of the service in the trade area (the relevance of the third-party service at the location in terms of benefits) does not have a significant moderation effect, while the frequency of shopping at the third party (relevance of the third party) has a negative moderation effect for spending.

Room M3.01