The effects of channel subsidies on sales performance across fulfillment modes in airport e-commerce
Xusen Cheng, Yijun Yan, Qiongwei Ye, Shuo Liu, Zhilin PangPurpose
Channel subsidies are widely used to stimulate online sales performance; however, their effectiveness may vary across fulfillment modes within the same digital retail system. This study examines how the relationship between subsidy intensity and store sales varies across fulfillment modes in airport e-commerce.
Design/methodology/approach
This study used transaction data from the online channel of a major international airport in China. We constructed an unbalanced panel of 88 stores observed over six months and estimated fixed-effects models to examine sales responses to subsidy intensity across three fulfillment modes.
Findings
The results show that channel subsidies significantly increase overall online sales performance. The estimated subsidy coefficient is largest for in-store pickup, followed by instant delivery and home delivery. Dining stores exhibit stronger sales responses than retail stores for in-store pickup and instant delivery. The spatial interaction effects are statistically insignificant.
Practical implications
Airport operators may prioritize subsidies for in-store pickup and instant delivery when seeking to stimulate online sales, while considering differences between dining and retail stores. Retailers may reduce fulfillment uncertainty by displaying preparation times, store congestion, and historical delivery times.
Originality/value
This study contributes to the e-commerce and omnichannel retail literature by providing field evidence on fulfillment-specific sales responses to channel subsidies in a temporally and spatially constrained setting. By breaking down total sales into fulfillment-specific outcomes, this study highlights the importance of considering operational channel structures in evaluating digital incentives.