Segmenting Online Customers to Manage Business Resources: A Study of the Impacts of Sales Channel Strategies on Consumer Preferences

This study extends our current knowledge in the area of online consumer behavior by examining how a business's sales channel strategy could influence consumer's sales channel preferences. It makes a new argument that business strategies could play an important role in consumer sales channel preference development. When a business offers multiple sales channels (a hybrid model), its customers can compare sales channels either within or outside of the same corporate business. Such freedom is, however, diminished when a business employs the Internet as the only transaction medium (pure Internet store). A matrix was developed to demonstrate how business strategies could interplay in the consumer preference formation process and later was used to segment our respondents into three different groups. They were segmented according to the sales channel strategies of their selected Internet store and the brick-and-mortar store that they used to make a comparison. MANOVA and structural equation modeling tests were performed on 435 survey respondents. Four preferential factors, including transaction cost, product, risk, and social experience, were used as examples and tested across three groups of respondents. Results revealed that online users employ different sets of preferential factors when comparing different sets of sales channels. Such results were thereafter used to draw a new set of online strategies that could be used to allocate business resources more effectively.