Purchase now and consume later: Do online and offline environments drive online social interactions and sales?

Abstract

For small local retailers, promoting social interactions on an online platform can be a cost-effective tool to enhance short-term sales and nurture long-term relationships. This paper examines how online purchase and offline consumption environments affect the generation of social interactions as well as sales. Of many environmental variables, we focus mainly on the presence of other offers (online) and retailers (offline). We find that online and offline environmental factors have significant but different effects on the outcomes. Specifically, when more offers of the same kind are displayed in an online platform page, there are less sales and product discussion but more social referral. When a local retailer is in a region populated more by the same kind of service, sales and social interactions are both greater overall. The results suggest that these retailers should optimize their strategies according to their specific objectives when using such platforms.