Commercializing the Package Flow: Cross-Sampling Physical Products Through E-Commerce Warehouses

Many e-commerce platforms have established their warehouses to facilitate the storage and delivery of packages. This paper studies a novel business practice—cross-sampling through e-commerce warehouses—that allows physical free samples provided by one (sampling) brand to be distributed with the packages of another unrelated (distributing) brand. In close collaboration with Alibaba, we implement cross-sampling through a large-scale field experiment, in which more than 55,000 free samples are distributed, to empirically examine its effectiveness in driving online sales of the sampling brand. First, we find significant increases in store visits and sales of the sampling brand both in the short term and long term up to 14 months afterward. The long-term effect is driven mainly by acquiring customers who did not purchase from the sampling brand to visit the online stores and eventually make a purchase. Second, contrary to the previous literature on within-category free sampling, we find a significant sales increase in both the sampled item and other items, which further spills over to indirect channels. Therefore, cross-sampling can also help promote the sampling brand as a whole. Finally, we illustrate the potential for personalization for cross-sampling. Cross-sampling is more effective for customers who recently viewed related products or just purchased nonessential products from the distributing brand. By taking into account the interaction among brands, items, and customers, we can further improve the profitability of cross-sampling by targeting the “right” packages. Overall, because cross-sampling is scalable, effective, and flexible, we demonstrate the high potential of a new business practice that combines offline logistics control and online information to generate additional business value for customers, brands, and the platform. This paper was accepted by Victor Martínez-de-Albéniz, operations management. Funding: T. Sun acknowledges research support from CKGSB Research Institute, Center for Digital Transformation, and ABRI Grant. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2020.00902 .

• 저널Management Science
• 토픽Urban and Freight Transport Logistics · Building and Construction
• DOI10.1287/mnsc.2020.00902
• 저자Brian Rongqing Han, Leon Yang Chu, Tianshu Sun, Lixia Wu