Channel Adoption Pathways and Post-Adoption Behavior

TL;DR

This study analyzes how different motives for adopting online shopping channels influence post-adoption behavior, revealing systematic differences in spending, profitability, and channel usage based on adoption pathways.

Contribution

It introduces a detailed analysis of how adoption motives affect post-adoption behaviors using transaction data and difference-in-differences estimation.

Findings

Promotion-driven adopters engage in forward buying and have lower profitability.

COVID-19 adopters show stronger offline persistence and consumer inertia.

All adopters increase spending compared to offline-only consumers.

Abstract

The rapid growth of digital shopping channels has prompted many traditional retailers to invest in e-commerce websites and mobile apps. While prior literature shows that multichannel customers are more valuable, it overlooks how the motive for adopting a new channel shapes post-adoption behavior. Using transaction-level data from a major Brazilian pet supplies retailer, we study offline-only consumers who adopt online shopping via four distinct pathways: organic adoption, the COVID-19 pandemic, Black Friday promotions, and a loyalty program. We examine how these pathways affect post-adoption spend, profitability, and channel usage using consumer-level panel data and difference-in-differences estimates. We find that all adopters increase spending relative to offline-only consumers, but their post-adoption behaviors differ systematically by adoption motive. Promotion-driven adopters engage in forward buying and exhibit lower subsequent profitability, whereas COVID-19 adopters display stronger offline persistence consistent with consumer inertia and habit theory. Our findings have important managerial implications: firms should design promotions that discourage stockpiling, reinforce habits among customers pushed online by external shocks, and explicitly account for heterogeneity in channel adoption motives when forecasting customer lifetime value and assessing the breakeven and ROI of promotions designed to induce the adoption of new channels.